Highmark’s high-cost hospital reduces insurance benefits

Insurer Highmark Health boosted health care spending in the first six months of the year amid losses, inflation, and higher costs of services and supplies.

Pittsburgh-based Highmark lost $174 million on revenue of $13 billion in the first two quarters, the nonprofit company said Tuesday.

Highmark Health Plan made the most money, or $11 billion, of the company’s income and made a profit of more than $450 million driven by the closure of Health Now insurance and the purchase of the remaining 50% of Gateway Health Plan last year. The insurer, which has 6.8 million members in four states, also benefited from lower usage earlier in the year due to the COVID-19 micron surge, Chief Operating Officer Karen Hanlon said. The insurance segment also boosted the company’s performance in the first quarter.

“As capacity opens up and becomes available, we’re confident we’ll see usage return to near pre-pandemic levels,” Hanlon said. “But I don’t believe this is going to be a one-off. It’s going to be a gradual process as some of the workforce issues are resolved.”

Provider-related problems could affect Highmark’s Medicare Advantage stars in the coming year, Hanlon said. The company’s 256,000 Medicare Advantage members rated their experience in the plan lower than in previous years, Hanlon said.

The Centers for Medicare and Medicaid Services relaxed the requirements for Medicare Advantage plans over the past two years as part of the pandemic, which led to many insurers receiving higher premiums on a five-point scale. Cigna and Cetene said recently that they expect their stars to drop when CMS resumes its pre-pandemic scoring system. The new information is scheduled to be released ahead of Medicare open enrollment, which begins Oct. 15, but CMS has not explained how it will calculate this year’s ratings.

“It’s a challenge and a challenge within the support community,” Hanlon said. “Doesn’t the insurance customer differentiate between, ‘What did the insurance company do and what did they help me with?’ and ‘What will the provider do and help me with?’ while writing research. Questions of opportunity are contested in all industries. ”

Highmark’s Allegheny Health Network Health System benefited from a slight increase in patient visits, with non-vaccination outpatient registrations up 12%, physician visits up 3%, emergency room visits up 13% and deliveries up 6%. Domestic production and sales were down 2%, however.

Inflation and rising operating and asset costs caused the 14-hospital hospital to report $2 billion in earnings and losses before interest, taxes, depreciation and amortization of $71 million.

“Some of the major economic factors – labor and supply issues, inflation – we will be facing the same conditions as any other supply chain,” Chief Financial Officer Saurabh Tripathi said. “Investment markets are volatile, it is difficult to predict the next day, even a year. But we have a very strong cash flow and a very strong cash flow, so we are not worried about short-term damage. “

Highmark’s various businesses, which include HM Insurance Group’s stop-loss business, United Concordia Dental insurance and enGen’s technology services, also added $100 million to the company’s profits.