PITTSBURGH (March 22, 2022) — Highmark Health today announced financial results for year-end 2021, reporting $22 billion in consolidated revenue, an operating gain of $301 million, and excess revenue over expenses of $440 million, excluding one-time gains.
These results are due to the solid performance of most business units, notably Highmark Health Plan's strong commercial and government business results, driven by continued focus on value creation initiatives, and strong results in its diversified businesses due to continued positive performance in the dental business and at HM Insurance Group. Although Allegheny Health Network experienced year-over-year volume increases, the provider system experienced cost pressures related to supply chain challenges, labor costs, and continued high-costs for personal protective equipment and drugs.
Highmark Health maintained a strong balance sheet with more than $12 billion in cash and investments and net assets of more than $10 billion as of December 31, 2021.
"As we shift from a COVID-19 pandemic to an endemic environment, we are looking forward and building for the future," said David Holmberg, president and chief executive officer of Highmark Health. "Our strategic focus remains leading the industry in transforming health care by reinventing the health care system, and by continuing to operate as a high performing, blended health organization. Our transformation strategy, which we call Living Health, enables us to unite payors, providers, tech innovators, and community organizations across our core markets and the country to build a health ecosystem that works better for everyone."
"We have grown and remained strong and stable through the pandemic, which proves our blended health approach is working even enabling us to invest nearly $1.4 billion in the communities we serve through premium credits, provider and local community support, and expanding access to care," added Saurabh Tripathi, chief financial officer and treasurer of Highmark Health. "In 2021, Highmark Health delivered strong results driven by positive operational performance primarily in our insurance businesses, where we grew with the addition of Highmark Western and Northeastern New York and Highmark Wholecare. Our financial position and strength continue to fund our advancements in innovation, strategy, and collaborations, while these community investments and unwavering commitment to our exceptional providers positions us well to continue taking care of our patients and members."
The Highmark Health Plan reported an operating gain of more than $300 million for the 2021 fiscal year, primarily driven by strong performance in the commercial and government business and a continued focus on clinical transformation and value-creation activities.
These efforts resulted in savings for Highmark members through measured year-over-year premium increases for health plan products as the organization strove to absorb rising health care costs.
As a result, the commercial business experienced strong retention rates as customers in all regions continue to choose the exceptional value of Highmark coverage despite pressures related to the pandemic and recession. Core health plan and Blue Card membership increased slightly with approximately 6.8 million Highmark members, with total commercial retention rates at 98 percent.
Highmark's diversified businesses reported combined earnings of more than $250 million through December 31.
United Concordia Dental continues to perform well, delivering an operating gain of $159 million in 2021. Highmark Health's stop loss business, HM Insurance Group (HMIG), reported an operating gain of $90 million.
HM Health Solutions, our information technology services company whose platform serves approximately 11 million lives across the country, reported an operating gain of $7 million in 2021 driven by platform transformation initiatives.
Allegheny Health Network delivered earnings before interest, taxes, depreciation, and amortization of $154 million through December 31, an improvement of more than $70 million compared to 2020 performance, as patients returned to hospitals and physician offices seeking care.
For 2021, patient volumes increased year over year in several key categories, including a 5 percent increase in inpatient discharges and observations, a 36 percent increase in outpatient registrations, a 13 percent increase in physician visits, and an 18 percent increase in emergency room visits. AHN patient volume continues to recover and approach pre-COVID levels.
In summary, Highmark Health continued to deliver its financial commitments in 2021 despite the impact of cost pressures on AHN and reinvested nearly $1.4 billion across the region to benefit patients, members, and the community.
1Excess Revenue Over Expenses = ~$1.4B including one-time gains
Highmark Health, a Pittsburgh, PA-based enterprise that employs more than 37,000 people who serve millions of Americans across the country, is the parent company of Highmark Inc., Allegheny Health Network, and HM Health Solutions. Highmark Inc. and its subsidiaries and affiliates provide health insurance to approximately 6.8 million members in Pennsylvania, West Virginia, Delaware and New York as well as dental insurance, and related health products through a national network of diversified businesses. Allegheny Health Network is an integrated delivery network comprised of 14 hospitals, more than 2,500 affiliated physicians, ambulatory surgery centers, an employed physician organization, home and community-based health services, a research institute, a group purchasing organization, and health and wellness pavilions in western Pennsylvania. HM Health Solutions is focused on meeting the information technology platform and other business needs of the Highmark Health enterprise as well as unaffiliated health insurance plans by providing proven business processes, expert knowledge, and integrated cloud-based platforms. Lumevity, a wholly owned subsidiary of Highmark Health, helps companies transform in ways that drive direct financial benefits while improving quality and increasing employee engagement. To learn more, visit www.highmarkhealth.org.