Highmark lays off 132
By Alex Nixon
Published: Tuesday, Feb. 11, 2014, 5:21 p.m.
Highmark Inc. laid off 132 workers in information technology and sales on Tuesday, including 65 in Pittsburgh, saying that it needed to align its workforce with its changing business.
The layoffs, which represent less than 1 percent of the 20,000 employees in Highmark's health insurance business, were announced a day after CEO William Winkenwerder held a meeting with reporters in which he said the company was strong and growing.
The cuts pared 120 employees in information technology and 12 in sales, Highmark spokesman Aaron Billger said. About half were in Pittsburgh, where the company employs 5,000 workers, and the remainder in Camp Hill, he said.
“We're looking at every job, making sure that we have the right people in the right jobs,” he said, declining to say whether the company plans more layoffs.
Highmark, the state's largest health insurer and operator of Pittsburgh's second-largest hospital network, is facing strong competition from UPMC for insurance subscribers and patients.
The companies have been embroiled in a dispute over a contract that allows Highmark's members in-network access to most of UPMC's hospitals and doctors. UPMC is refusing to renew the contract when it expires at the end of the year.
UPMC has argued that Highmark will use the contract to steer patients to the insurer's hospital business, Allegheny Health Network. Highmark has said that it wants a contract to give its members a choice of where to seek treatment.
Highmark members will need to switch insurers by the end of this year to avoid paying costly out-of-network charges at UPMC facilities. UPMC is the biggest hospital network and No. 2 health insurer in Western Pennsylvania.
Billger declined to cite specific changes in Highmark's business that triggered the layoffs but said that they did not contradict Winkenwerder's comments about the company's health and growth.
“Like any prudent company, we are constantly changing to respond to the needs of our customers and the dynamic health care marketplace,” Billger said. “We regularly assess our workforce capabilities and make adjustments when necessary to meet the changing business needs.”
Patients have been abandoning the Highmark-owned West Penn Allegheny Health System hospitals for years for UPMC — a trend Highmark has yet to reverse. West Penn Allegheny is the centerpiece of Highmark's hospital business, which employs more than 17,000 people.
While it's laying off workers now, Highmark plans to establish 96 jobs in information technology over the next several months, Billger said.
He said the jobs were unrelated to the formation of a Highmark subsidiary, Highmark Health Solutions, which Winkenwerder announced Monday.
The Solutions business will provide information technology, billing and processing services to other Blue Cross companies, similar to a multi-year contract Highmark has with Philadelphia-based Independence Blue Cross.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or firstname.lastname@example.org.
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