Highmark Health ‘Extends Positive Momentum’ Even as Visionworks Sees ‘Soft Sales’

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PITTSBURGH—Highmark Health, a national health and wellness organization and parent company of Visionworks, on Monday reported an excess of revenue over expenses of $551 million for the first six months of 2018, and an operating gain of $502 million, both comparable results to the prior-year performance. Pre-tax results of $602 million were $21 million ahead of prior-year results, Highmark added in its announcement. The organization, which late last year sold a majority stake in its Davis Vision business to Centerbridge Partners, as VMAIL reported, said the first-half results were driven by “strong performance across all business divisions, notably Highmark's commercial and government health plan business due to continued focus on value creation initiatives,” among other factors.

"As we've stated before, Highmark Health has a holistic capital plan and strategy and a diversified business operating model that enables us to continue to invest in Allegheny Health Network to advance our path to value-based care," Highmark Health president and chief executive officer David L. Holmberg said in the announcement. "Our financial performance and growth, combined with the recent rating upgrades from Standard & Poor's, AM Best and Moody's, clearly indicate that our strategy is working and we have succeeded in creating true competition and providing consumers with choice and access to high-quality, value-based health care in the markets where we operate."

Visionworks, the company's 750-location retail vision business, “continued to experience soft sales in the first quarter, consistent with industry trends, resulting in an operating loss of $7 million through June 30,” the announcement noted. “Despite this slow recovery, the company is focused on executing on a multi-year turnaround plan.”

Karen Hanlon, chief operating officer and chief financial officer, said that “as an enterprise, we extended the positive momentum of our financial performance in 2017 through the first six months of 2018, with strong performance across all business divisions and a consolidated operating margin of nearly 6 percent, which we believe is a solid indicator that our integrated delivery and financing system model is working.”

In its financial report, Highmark said total consolidated revenue reached nearly $9.4 billion for the six-month period, an improvement of more than $200 million over the year-ago result, which it attributed to increased revenues from United Concordia Dental due to a full year of servicing the TriCare contract, as well as higher core business revenue from Allegheny Health Network and HM Health Solutions.