Spared From Reporting a Net Loss, Highmark Finds Opportunity in Diversification

NASHVILLE, Tenn., May 14 HealthLeaders-InterStudy, theleading provider of managed care market intelligence, reports that HighmarkInc. was spared from reporting a net loss last year in part by its acquisitionand diversification strategy which complements its core business. According tothe new report entitled Blue Profiler: Highmark Inc., the insurer reported netincome of $375.4 million in 2007, with $112 million of it coming fromHighmark's dental, vision and reinsurance businesses.

"Highmark is in a very competitive market, and is constantly watching overits shoulder as the nation's second-largest health insurer, UnitedHealthcare,makes a steady push into Pennsylvania," said Chris Lewis, analyst atHealthLeaders-InterStudy. "Diversification is a way for them to ensure growthoutside of their core business. In recent years Highmark has invested indental, vision and administrative subsidiaries."

Highmark is trying to convince state regulators of its need to merge withIndependence Blue Cross to better compete against national insurers. Revenuesfrom its core healthcare businesses did not keep pace with rising medical anddrug costs in 2007, but Highmark's subsidiaries and investment income allowedit to show a positive net income.

Besides diversification, Highmark is growing by offering Medicare productsthat reach beyond Pennsylvania and into West Virginia and Ohio. Highmark hassignificant brand loyalty and has the second-largest Medicare prescriptiondrug plan enrollment in Pennsylvania, with more than 90,000 members. ItsMedicare Advantage products lead the market in five of Pennsylvania's largestcounties and enroll a total of more than 250,000 Medicare Advantage members.

Blue Profiler: Highmark Inc. is one of 15 Blue Profiler reports for 2008on the nation's largest nonprofit Blue Cross Blue Shield plans, which togetherinsure more than 50 million people.

About Blue Profiler

Blue Profiler offers the most comprehensive analysis of the nonprofit BlueCross Blue Shield plans. Each report includes an individual nonprofit Blueplan and includes valuable analysis that will allow companies to moreeffectively partner with these dominant organizations. Each report includesinformation on:

About HealthLeaders-InterStudy

HealthLeaders-InterStudy (www.hl-isy.com) is the authoritative source formanaged care data and analysis. HealthLeaders-InterStudy is a DecisionResources, Inc. company.

All company, brand, or product names contained in this document may betrademarks or registered trademarks of their respective holders-- Competitive analysis -- Enrollment trends -- Company-wide financials -- HMO financials -- Consumer-driven products -- Medicare strategy -- Pharmacy -- Disease Management

SOURCE HealthLeaders-InterStudy