Highmark Health capped off a year of significant growth with positive financial results, hitting $27.1 billion in revenue and exceeding $533 million in net income for 2023. The announcement, made during their fourth-quarter results on Monday, showcased the company’s strong performance despite undergoing recent workforce adjustments.
Highmark’s financial health appears robust. They boast an operating margin of $338 million, bolstered by gains in health insurance and investments. This offsets the $117 million operating loss incurred by the Allegheny Health Network, which is still recovering from the pandemic’s impact. The company also sits on a comfortable reserve of $11 billion in cash and investments.
Highmark Health Plans, the company’s insurance arm, proved to be a major driver of success. They secured a significant operating gain of approximately $400 million for 2023 and maintained their position as the leading insurer across Pennsylvania, Delaware, Virginia, and western New York. CEO David Holmberg highlighted their expansion into West Virginia, where they were chosen to deliver Medicaid services.
Looking back at the past decade, Highmark has experienced impressive growth. Holmberg emphasized a 72% increase in annual revenue and a 32% jump in Highmark Health Plan’s membership since 2013.
However, recent news reports indicated workforce restructuring within the company. Last week, the Pittsburgh Post-Gazette documented layoffs impacting 182 employees nationwide, primarily affecting Blue Cross Blue Shield insurance plans in western Pennsylvania.
Karen Hanlon, Executive Vice President and Chief Operating Officer at Highmark, addressed these concerns. She clarified that the company is undergoing a strategic redesign of workflows, leading to the elimination of certain roles. She emphasized ongoing recruitment efforts, with over 6,100 new hires in 2023. While some of this growth occurred outside the U.S., Hanlon assured that the overall U.S. workforce increased by about 2%.
The Allegheny Health Network, a subsidiary of Highmark, also showcased positive developments. They reported a 7% increase in inpatient discharges and observations, a 5% rise in outpatient registrations, a 3% growth in physician visits, and a 6% jump in emergency room visits. Additionally, they expressed confidence in navigating potential delays caused by the recent Change Healthcare cyberattack, ensuring continued claim submissions to insurers.
Beyond financial results, Highmark highlighted its commitment to the community. They reported providing over $225 million in support initiatives and directed $825 million towards investments in their Living Health model, which focuses on preventative care and improving overall well-being.
Highmark Health’s financial performance in 2023 demonstrates a company in a strong position. While navigating workforce adjustments, they continue to deliver impressive revenue growth and expand their reach. Their commitment to both financial success and community investment paints a promising picture for the future.
