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March 12--Highmark Inc. laid off more than 100 workers from operations across Pennsylvania on Wednesday, including 40 employees in Pittsburgh, as the state's largest health insurer "streamlines" its operations.
The company, which has now cut more than 260 workers since early February, said the staff reductions were unrelated to the pending expiration of its contract with UPMC, Western Pennsylvania's largest network of hospitals and doctors.
"We are transforming health care in our markets and our workforce needs to be aligned to our strategies," spokesman Aaron Billger said.
Part of the transformation includes creating the Allegheny Health Network of hospitals and doctors that is competing with UPMC for patients in Pittsburgh. UPMC has refused to contract with Highmark because it is a competitor. Starting next year, Highmark insurance subscribers will have to pay costly out-of-network rates at most UPMC hospitals.
The pressure of trying to hold onto its members led rating agency Standard & Poor's to downgrade Highmark's credit rating last week. S&P analysts said they expected weaker profit from Highmark because it was cutting premiums in an effort to retain insurance customers.
Highmark doesn't release quarterly financial reports. Its last financial report was for 2012 and showed net income of $246.5 million, compared to $444.7 million in profit the year before.
Last month, Highmark laid off 28 workers in its finance department and 132 people in information technology and sales.
Allegheny Health Network also has been eliminating jobs to trim expenses. The health system's flagship hospital, Allegheny General on the North Side, laid off an undisclosed number of workers last week. In July, the system announced it would lay off 262 workers and eliminate 200 open positions.
Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or email@example.com.
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