Highmark reports strong financial picture for 2018 | TribLIVE.com

Highmark reports strong financial picture for 2018

Natasha Lindstrom
Tribune-Review file
The Highmark sign atop Fifth Avenue Place in Downtown Pittsburgh.

Highmark Health took in $515 million more in revenue last year than the previous year, making 2018 its second-best financial performance since the integrated health care system’s inception, CEO David Holmberg said Tuesday.

“We’ve continued to grow and expand, remain financially strong and stable, and maintain our relationships in the markets in which we compete,” Holmberg said. “We remain firmly committed to getting health care right.”

Highmark reported $18.78 billion in operating revenue last year, up from $18.26 billion in 2017, financial statements filed with state regulators show. Its net assets grew to $6.7 billion, a $200 million increase from 2017.

Despite the increased total revenue, Highmark finished 2018 with about $90 million less in operating income than the previous year. Its 2018 operating gain totaled about $526 million, down from $616 million in 2017, Highmark’s self-reported statements show.

Highmark’s net revenue, after expenses but before taxes, totaled $665 million — down from a record-high of almost $1.12 billion in 2017, records show.

A large portion of that drop was because of one-time income generated by the previous year’s sale of Davis Vision. The sale brought in $330 million in 2017 and related tax changes netted another $30 million.

Highmark’s income from commercial business decreased by $114 million, for a 36 percent decline from 2017, and government business brought in $126 million less in 2018, for a 30 percent decrease, the statements show.

Net revenue also was down because of efforts to lower the costs of plans, enhance benefits and take other steps to pass savings onto consumers, Chief Operating Officer Karen Hanlon said.

“We’ve been focused on improved prices at lower costs,” Hanlon said.

Highmark Health was formed in 2013 as the parent company to insurer Highmark Inc. and the Allegheny Health Network hospital system, which it created the same year.

Allegheny Health Network saw a $10 million boost last year, up to $39 million in operating income in 2018. Its total revenue was $3.3 billion — a nearly 7 percent increase from 2017 and a nearly 50 percent increase from five years ago.

Patient observations increased by 2.4 percent compared to 2017 and physician visits climbed by nearly 4 percent. Emergency visits dropped by 2.6 percent, which executives attributed to the success of Highmark’s same-day appointment program.

Highmark’s diversified business, including dental, vision and stop loss companies, increased their earnings by $56 million, up to $159 million in 2018. Dental business United Concordia now is the fourth largest dental company in the nation, approaching $1.5 billion in revenue.

The Downtown Pittsburgh-headquartered nonprofit system employs more than 43,000 people. Its 2018 cash and investments totaled about $8 billion.

Recent investments have spanned four new neighborhood hospitals, five new cancer care centers, renovated emergency departments, expanded women’s health services and a new academic center at Allegheny General Hospital in Pittsburgh’s North Side.

Highmark anticipates that about 200 active construction projects will create 800 health care jobs and as many as 10,000 related construction and trade jobs.

Natasha Lindstrom is a Tribune-Review staff writer. You can contact Natasha at 412-380-8514, [email protected] or via Twitter .

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.