Highmark posts $186M overall operating loss, says finances are sound
Highmark Health, the Pittsburgh-based company that encompasses Highmark Inc. and the Allegheny Health Network, posted an overall operating loss of $186 million for 2013 but characterized the results as showing "strong financial foundation and sound operational and financial performance."
This is the first financial report for the diversified health and wellness enterprise, which launched about a year ago with the creation of the Allegheny Health Network and and now ranks as the nation’s third-largest integrated health care delivery and financing network. Allegheny Health Network includes eight hospitals, physician organizations, a group purchasing organization and ambulatory surgery centers.
Earlier this year the organization reported on just the Highmark Inc. part of its operations, which includes its health insurance business as well as diversified businesses.
Today's report does not include a full year for each of the hospital affiliations from 2013 but rather a partial year based on the effective date of each affiliation as the organization moved to align the organizations on a calendar year, according to a news release.
Highmark Health said its overall operating loss was driven by a one-time, non-cash goodwill impairment charge of $311 million "that is not reflective of the status of the projected turnaround of the West Penn Allegheny Health System."
Allegheny Health Network posted a net loss of $107 million. Highmark said it made significant investments at AHN in 2013 to improve the quality and cost of care, including capital expenditures of more than $120 million over various projects, including funding the recently opened surgery center in Monroeville, the construction of the 174,000-square-foot health and wellness pavilion in Wexford, introduction of electronic health system through Epic and expansion across the hospital system in key clinical areas, including oncology, cardiovascular care and women’s health.
Highmark Heatlh said it had more than $7 billion in cash and investments and a surplus of nearly $6 billion as of Dec. 31, 2013.
“Highmark Health has a strong financial foundation to invest in the future and work on behalf of our members and the community to develop innovative health care products and services, manage costs, improve quality and create an outstanding customer experience,” Karen Hanlon, Highmark Health senior vice president of finance, said in the news release.