The financial strength rating on Highmark Inc. (d/b/a Highmark Blue Cross Blue Shield and Highmark Blue Shield) is based on the company's strong competitive position in its core markets, very strong balance sheet characteristics, very strong liquidity, historically strong operating performance, and good business and earnings diversity through the specialty products unit. Highmark's geographic concentration, the continued unprofitability of its Direct Pay (state-sponsored and guaranteed issue) products, the slightly unfavorable regulatory environment, and its status as insurer of last resort in western and central Pennsylvania somewhat offset these strengths. Standard&Poor's Ratings Services expects Highmark's earnings to weaken again in 2013, reflecting the concessionary pricing implemented during its contentious contract negotiations with the University of Pittsburgh Medical Center (UPMC),
