Highmark Health is echoing macro trends reported by other major insurers, as the company posted $7.3 billion in revenue and $194 million in net income for the first quarter.
Executives told Fierce Healthcare increased utilization of medical services in its Medicare Advantage business and rising GLP-1 costs are challenges the company is facing.
Increased utilization was seen broadly across inpatient and outpatient costs and in line with major national insurers, said CFO Carl Daley. As for GLP-1 drugs, demand is ramping up again after slowing down in the back half of 2023.
Highmark stated it has $11 billion in cash and investments and net assets of nearly $10 billion and is in a good position to ride out utilization headwinds.
“Overall, we’re pleased with the top line growth,” Daley said. “Our net operating gain is still strong at $84 million.
Allegheny Health Network, the parent organization to acute care hospitals and providers and western Pennsylvania, posted a net EBITDA of $36.1M, a decrease of 10.8 million from the first quarter of 2023. Emergency visits rose 7% across the network.
Daley said AHN is not “where we want it to be yet, but we’re continuing to make progress.” Highmark said although top-line revenue is up, the system is not immune to increased labor and supply chain costs.
The company once again laid off employees, this time 98 workers, most of which were in the enGen business, Highmark’s IT services company, reported the Pittsburgh Post-Gazette.
Highmark had already laid off 47 workers earlier this month and 182 employees in March, reported PennLive.
Daley said the company is working to meet the changing needs of members and will embrace automation in certain areas. He noted Highmark has hired 1,800 new associates year-to-date.
“We are continuing to invest in hiring across all aspects of our business,” he said.
enGen reported operating revenue of nearly $300 million during the first quarter, with Highmark pleased of the segment’s strong performance.
The company’s dental business achieved operating gains of $33 million in the first quarter, while HM Insurance Group reported an operating gain of $12 million.