UPMC finances held strong while Highmark started to bounce back from a tough 2025, according to first-quarter earnings released this week by the Pittsburgh-based health insurers and hospital networks.
The organizations’ overall results were remarkably similar. UPMC made an operating profit of $261 million on $8.4 billion in revenue while Highmark’s operating profit reached $211 million on $8.3 billion in revenue.
The positive showing by UPMC, the state’s largest private employer, was fueled by its insurance side generating $329 million in operating income, more than enough to offset a $68 million loss from health services.
By contrast, UPMC’s $286 million operating profit for all of last year was driven by treating patients at its doctors’ offices, clinics and 40-plus hospitals.
Through the first three months of this year, UPMC Health Plan benefited from raising premiums on its Medicare and Medicaid plans, while the health system struggled with lower inpatient volumes and worse reimbursement rates, according to the organization’s financial report.
Allegheny Health Network, the provider side of Highmark, saw inpatient and emergency room visits fall, a trend it attributed to a mild respiratory illness season and severe winter weather that deterred people from seeking hospital care.
The 14-hospital health system nonetheless collected $9 million in operating income, its fifth straight quarter of positive operating margins.
Highmark Health Plans did much better, earning $249 million in operating income. A break from a steadily rising number of claims improved margins, according to Highmark Chief Financial Officer Carl Daley.
“While they’re still elevated, they’re not accelerating,” Daley said Thursday.
He also credited higher premiums on Medicare and Medicaid plans for the robust margins as well as fewer people than expected dropping Affordable Care Act coverage after the loss of some federal subsidies last year.
Highmark is hardly out of the woods, but these first-quarter results suggest it could be rebounding after it lost $674 million on operations last year.
In April, Highmark Health Plans finalized an affiliation with Blue Cross Blue Shield of Kansas, which boasts roughly 1 million members and $3 billion in annual revenue. The financial impact of that deal will appear in Highmark’s second quarter results.