Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Upmc Revenue Increases as Split from Highmark Grows Wider

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Upmc Revenue Increases as Split from Highmark Grows Wider

Article excerpt

UPMC's chief financial officer on Monday hammered in another nail on the local health care market dynamic that most Pittsburghers grew up with.

"The old days of one dominant insurer and one dominant provider are gone," Robert DeMichiei said.

The Pittsburgh health giant's fiscal 2015 report released Monday showed net patient revenue from insurer Highmark represented 18 percent of the nearly $5.9 billion UPMC collected.

That's down from 26 percent for the year before, and just slightly ahead of the collective 16 percent from national insurers such as United HealthCare, Cigna and Aetna/Coventry. Nearly half of the health system's revenue came from government programs Medicare (34 percent) and Medical Assistance (13 percent).

This marks only the second year in recent memory (the other was 2014) that Highmark's share of UPMC patient revenue has fallen below 20 percent.

In part, that may signal that more Highmark members are seeking care at Highmark Health's Allegheny Health Network facilities or other community hospitals. Highmark spokesman Aaron Billger on Monday said the Pittsburgh insurer does not generally comment on UPMC's financial results. Highmark results are expected in the next few weeks.

After more than a decade in which UPMC and Highmark each ruled its respective markets, UPMC announced in 2011 it would not renew its contract with the insurer after Highmark said it planned to acquire the financially ailing West Penn Allegheny Health System and make it the centerpiece of its own health system. The acquisition was completed in 2013 following approval by the Pennsylvania Insurance Department, launching the Allegheny Health Network.

With UPMC now expanding its Affordable Care Act marketplace presence - while major insurers such as Aetna and United HealthCare are pulling back from the federal program to provide access to coverage for the uninsured - the Pittsburgh health system has set course for its planned full separation from Highmark in 2019 when the state-brokered consent decree agreement expires. …

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