More than $670 million in investment losses contributed to an overall net loss for local health care giant Highmark Health during the first nine months of the year, according to the organization’s third-quarter financial report for 2022.

Highmark Health reported $19.5 billion in revenue from January through September, about a 22% increase compared to the same period a year ago, the report showed.

But Highmark Health reported a net loss of $268 million for the first nine months of the year thanks to losses associated with the group’s investment portfolio. The Pittsburgh-based nonprofit is the parent company of the 14-hospital system Allegheny Health Network, the health insurance provider Highmark and other health care subsidiaries.

Highmark Health CFO and Treasurer Saurabh Tripathi said health care groups across the country are facing similar challenges, including inflation, staffing challenges and a “difficult equity market.” He said profits from Highmark health insurance and other subsidiaries have helped the organization weather some of these headwinds.

“We maintain our strong consolidated financial position despite these challenges because our blended health and diversified business model works,” said Tripathi. “Our balance sheet remains strong, and we’ve grown our consolidated operating revenues by 22% year-over-year.”

Tripathi said Highmark Health has not traded its stock market assets and is hopeful that the market will turn around next year.

By comparison, Highmark Health’s first nine months of 2021 were highly profitable. The organization saw $1.5 billion net gain during that time period. Tripathi noted that $1 billion of that was from accounting gains thanks to acquisitions of some subsidiaries, and not from operating gains.

Highmark Health said it is also contending with increased costs associated with a labor shortage that has plagued the health care industry this year.

James Rohrbaugh, CFO and treasurer of AHN, said the hospital system has spent $105 million more year-over-year on contract labor to fill hospital staffing shortages. He said he is hopeful these expenses will lessen thanks to AHN’s nursing schools providing more health care staff and the system leveraging new technology so nurses can spend more time providing care and less time on administrative tasks.

Highmark Health and AHN have also recently completed allocating their federal covid funds as part of the CARES Act. Rohrbaugh said the final CARES payment was received during the third quarter, with $91 million going to AHN.