UPMC Health Plan’s top official says it now matches Highmark's market share for commercial and government plans in the Pittsburgh region, although a Highmark spokesman countered that its figures will tell a different story when they are released in coming days and weeks.
Marking UPMC Health Plan’s 20th anniversary, UPMC Insurance Services president Diane Holder on Thursday said the plan has grown to 2.9 million members, generating $6.6 billion in yearly revenue.
More importantly for the community, she said, the Western Pennsylvania medical insurance market is now divided into three equal parts, with UPMC Health Plan and Highmark garnering about 1.09 million members each and national insurers collectively accounting for about 1.13 million members.
“The good news for Pittsburgh is that it’s starting to look like other major metropolitan areas,” Ms. Holder said, with a more competitive market resulting in more competitive pricing.
While the majority of the UPMC health system’s patient revenue from July through December came from Medicare (45 percent) and Medicaid (17 percent), UPMC Insurance Services accounted for 12 percent and Highmark Commercial 11 percent. UPMC’s in-network contract with Highmark expired in January 2015.
Ms. Holder credited UPMC Health Plan’s growth to two key “secret sauce” factors: Members’ access to the UPMC provider network and the plan’s cost, with its marketplace Silver plan carrying the third-lowest price nationally. Newly released numbers from the Centers for Medicare and Medicaid Services show UPMC Health Services has 153,862 Medicare Advantage enrollees in 2016 compared with 142,139 a year ago, said UPMC spokesman Paul Wood.
Highmark spokesman Aaron Billger said the insurer does not comment on competitors’ enrollment numbers, but added, “Highmark’s 2016 enrollment remains strong with growth across Pennsylvania, Delaware and West Virginia, including a 94 percent retention rate in Western Pennsylvania among employers, and a 95 percent retention rate among Medicare Advantage members.”
Ms. Holder’s remarks came during UPMC’s quarterly financial briefing at the health giant’s headquarters in the U.S. Steel Tower, Downtown.
CFO Robert DeMichiei said the network continues to show strong results, recording $201 million in operating income the last six months of 2015 on $6.26 billion in revenue, with a 3.2 percent operating margin.
At the end of the first six months of the 2016 fiscal year, UPMC’s investment reserve portfolio was valued at $4.5 billion after absorbing a $292 million hit due to a general market downturn.
Also, UPMC hospitals saw a 3 percent drop in admissions and observations, with a 2 percent decline in outpatient revenue, reflecting a national trend toward treating patients in lower-cost settings.
Steve Twedt: stwedt@post-gazette.com or 412-263-1963.
First Published: February 19, 2016, 5:00 a.m.