Highmark Health’s insurance revenue in the first quarter supported the integrated health system amid steep investment losses, flat patient revenues and rising labor and supply costs .
Pittsburgh-based Highmark reported operating profit of $100 million on revenue of $6.4 billion in the quarter ended March 31. It posted a net loss of $150 million in the quarter as the value of its equity portfolio declined by $200 million.
Highmark Health Plans‘ gains in its commercial and government businesses generated operating profit of $150 million in the first three months of the year. Allegheny Health Network, made up of 14 hospitals, reported an operating loss of $106 million as total discharges and observation cases fell 2.1% year-over-year other and salary and social expenditure jumped by 13%. These trends reflect the first quarter financial results for many health systems across the country.
Shifting more care from inpatients to outpatients is the right thing to do for the patient, said Saurabh Tripathi, chief financial officer and treasurer of Highmark Health.
“It puts pressure on Allegheny Health Network because the reimbursement rates are different in outpatient than inpatient,” he said in an interview. “That’s where being a coeducational health organization helps. We can find ways to incentivize our doctors (through value-based reimbursement) to perform more outpatient surgeries.”
While inpatient volumes stabilized or declined year-over-year, outpatient registrations excluding vaccination appointments jumped 14% and physician visits increased by 4%, the executives said.
“We’ve mostly been focused on improving access on the outpatient side. We’ve seen quite a large pivot and faster (than expected),” said James Rohrbaugh, chief financial officer and treasurer of Allegheny Health Network. “We have a unique opportunity and the right processes and reimbursements in place to make this change successful.”
Highmark’s dental insurance subsidiary, United Concordia Dental, reported operating profit of $35 million in the first quarter, while its stop-loss business, HM Insurance Group, reported operating profit of $18 million. millions of dollars.
As for Highmark’s investment losses in the first quarter, executives expect to recover them in the second half. Stock market volatility is not impacting its capital expenditure budgeting, Tripathi said, noting that the company had $12 billion in cash and investments as of March 31.
“Operating gain is the key metric because it determines our cash flow. It’s the number we watch when determining our capital investment,” he said.