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Letter: From Our Chairman and Our Chief Executive Officer

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"2020 was among the most challenging years our country has experienced. Our organization's shared purpose, the promise to be there when the people and communities we serve need us, has never been more important."

2020 was among the most challenging years our country has experienced. Our organization's shared purpose, the promise to be there when the people and communities we serve need us, has never been more important.

Our organizational and financial strength, and the remarkable efforts of 35,000 employees, made it possible to deliver on that promise.

Across the enterprise, more than $1.5 billion was invested in bettering the lives of others in 2020. That included more than $750 million invested to support our customers, providers, and communities during the pandemic, and $760 million of capital investments to enhance capabilities, expand access to needed services, and advance ambitious strategic goals around improving the future of health and care. Capital investments from past years, particularly at Allegheny Health Network, showed their worth in the face of COVID-19.

Continuing strength and stability

This annual report's financial performance and financial overview convey our continuing strength and stability as an organization.

As expected, Allegheny Health Network was impacted financially by the pandemic, recording a year-end operating loss of $136 million. This was partly due to lower volumes, but also additional costs in ramping up telehealth infrastructure, purchasing equipment to protect patients and caregivers, and securing resources to prepare for a potential surge of patients.

However, underscoring the value of our blended health approach and diversified business operations, Highmark Health's overall performance remained solid, with consolidated operating revenue of $18 billion. Highmark Inc. and its Blue-branded affiliates continue to be the largest health insurers in Pennsylvania, West Virginia, and Delaware. And our diversified businesses had combined operating earnings of about $370 million.

Notably, as part of our strategic growth objectives, Highmark Inc. and HealthNow New York Inc. announced an agreement to affiliate in 2020. Now finalized, this affiliation expands our reach into western and northeastern New York, creating greater scale to leverage our Living Health strategy and positively affect the health of more people.

Accelerating strategic innovation

Since creating Highmark Health in 2013, we have embraced the need to disrupt our industry, including our own business models, to improve health outcomes, get people more engaged in their health, and make health care more affordable. In the past few years, we have made great strides in replacing the traditional, fragmented model of U.S. health care with a blended health approach that unites payers, providers, and other stakeholders to take on complex problems that others haven't been able to solve.

By further exposing the shortcomings, and disparities, of the industry's status quo, COVID-19 has accelerated our imperative to innovate. The next phase of our approach is to build a new model: Living Health. Backed by a solid, holistic capital plan, our Living Health strategy is based on the premise that we will achieve sustainable success by prioritizing what is in the best interest of our customers and their clinicians.

Leveraging technology is central to Living Health, and we now have six-year agreements in place with Google Cloud and Verily to help us create something unlike anything in our industry. The powerful combination of Verily's technology and product capabilities, Google Cloud's secure platform, and Highmark Health's clinical expertise will accelerate the meaningful use of analytics tools to improve health outcomes, lower the costs of care, and enhance the patient and clinician experience. Together, we will develop solutions that collect, organize, and activate health data on a highly personalized platform that empowers individuals, and enables a person's chosen clinicians and health team to respond to their unique needs and intervene in real time to better prevent and manage disease.

On a related note, it is important to acknowledge the phenomenal expansion of telehealth that occurred in 2020. Our health plans, which have extended coverage and cost-sharing for most in-network telehealth services through at least June 2021, reported a 3,400% increase in member usage of telehealth. AHN had a 5,000% increase in virtual visits during 2020. Virtual care is here to stay, and we are focused on making it business as usual, including leveraging developments in digital behavioral health technologies to create a highly integrated, personalized, and value-based model of behavioral health and wellness.

Similarly, the initial necessity to transition much of our workforce to work-from-home status created an opportunity to take a close look at how our organization can best operate in the future. We are now well into a Work from Anywhere initiative to rethink how we work, build on improved employee satisfaction scores recorded during remote working, and open up opportunities to recruit top talent outside our traditional geographic footprint.

Together for a purpose

As vital as financial strength, scale, and technological capacity are, it is ultimately our people who are overcoming the challenges of COVID-19, and who have delivered the strong year-end performance reported here.

Highmark Health's people, and like-minded collaborators outside our organization as well, showed tremendous courage, dedication, and focus throughout 2020. United by a shared purpose, acting with strategic clarity, and committed to improving the lives of others every day, those same people give us great confidence in Highmark Health's future, and in our ability to achieve our mission to create a remarkable health experience, freeing people to be their best.

Joseph C. Guyaux signature

Joseph C. Guyaux
Chairman, Board of Directors, Highmark Health

David Holmberg signature

David L. Holmberg
President & Chief Executive Officer, Highmark Health

 

Charitable Giving

In 2020, Highmark Health and its subsidiaries and affiliates invested more than $750 million to support customers, providers, and communities during the pandemic.


Living Health: Together for a Purpose

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