Humana Inc. (NYSE: HUM) has made “substantial progress” toward scaling its value-based home health model, executives say.
The advancements have come as the Louisville, Kentucky-based health and wellness company adds to its rapidly growing senior-focused primary care network. Bruce Broussard, Humana’s president and CEO, provided updates on both strategic priorities Wednesday.
“Our year-to-date results reflect the strength of our core operations, as we continue to see strong underlying fundamentals across all lines of business and remain focused on ensuring our members receive the right care at the right time, despite the continued disruption caused by the pandemic,” Broussard said on a conference call highlighting Humana’s third-quarter financials.
There are multiple layers to Humana’s health care services platform, but its heart and soul is quickly becoming CenterWell Senior Primary Care and Kindred at Home, the latter of which is rebranding to CenterWell Home Health moving forward.
With 200 locations expected to be open before next year, CenterWell Senior Primary Care is the largest senior-focused, value-based primary care group in the country.
Meanwhile, CenterWell Home Health is built from the biggest home health and hospice organization in the nation. As of April, Kindred at Home had locations in 40 states, delivering in-home care to more than 550,000 patients annually.
“Our efforts to transform home health to a value-based model come at a pivotal time for the industry,” Broussard said.
Humana reported total revenue of about $20.7 billion in the third quarter, a roughly 3% increase compared to $18.8 billion in the same period last year.
Revenue for the company’s health care services segment was a little over $8 billion in Q3 2021, a nearly 13% increase compared to last year’s third quarter. The segment, which also includes Humana’s pharmacy business, has performed “slightly better than expected,” according to CFO Susan Diamond.
“We are actively integrating the Kindred at Home operations, and results post-integration have largely been in line with expectations,” Diamond said. “For the third quarter, home health admissions grew low-single digits year over year, while hospice experienced a low-single digit decline year over year.”
Plans for CenterWell Home Health
Currently, Humana cares for about 270,000 members under value-based home health arrangements in South Florida and Southeast Texas, Broussard said.
It’s in the process of expanding its home health model to select spots in North Carolina and Virginia, with those markets chosen due to their Medicare Advantage (MA) density and Kindred at Home’s existing footprint.
Within the next five years, Humana wants to have 50% of its MA population under its value-based home health model, Broussard explained.
“As seniors increasingly choose Medicare Advantage, there is a meaningful opportunity for home health organizations to engage differently with patients, and [MA] payers to more holistically address patient needs and improve health outcomes,” he said on the call. “And to reduce the total cost of care for health plans and share appropriately in this value creation.”
Since ramping up its investment in the space, Humana has seen how home-based care can help close gaps in care and address social determinants of health.
In Florida and Texas, for example, Humana’s home health model has contributed to an ER-utilization rate that’s 100 basis points better than its national average, Broussard noted.
In addition to acquiring all of Kindred at Home from TPG Capital and Welsh, Carson, Anderson & Stowe, Humana added to its home strategy in June through the purchase of the provider-convener hybrid onehome. Led by Dr. Joseph Mayer, onehome helps manage a range of post-acute needs, from infusion and nursing services, to rehabilitation services and durable medical equipment (DME).
“With the acquisition of onehome earlier in 2021, a delegated post-acute management services organization for the home, we have the capabilities to be a value-based convener, providing risk-based contracting and referral management,” Broussard said. “And [we] continue to develop technology, enabling us to coordinate with other adjacent services.”
Humana is obviously bullish on its in-home care strategy.
Yet like all home health providers, it too must navigate the worsening shortage of nursing professionals.
“We are excited about the continued progress of our strategy in the home,” Broussard said. “But consistent with our home health peers, we recognize that the national nursing labor shortage poses a significant risk to the industry.”
Building a primary care powerhouse
CenterWell Senior Primary Care is one of the fastest-growing parts of Humana. By the end of 2021, Humana expects CenterWell’s footprint to include 300,000 patients across 24 markets in nine states.
“We’re accelerating organic and inorganic growth nationally, and we plan to open a total of 30 de novo senior-focused centers in 2022, up from 24 in 2021,” Broussard said. “This will include launching in two new major metropolitan areas, Dallas and Phoenix, next year.”
As far as inorganic growth, Humana completed seven acquisitions to grow CenterWell Senior Primary Care in the third quarter of this year. Those deals added 21 wholly owned locations to the company’s portfolio.
“We plan to continue this pace of acquisitions, focused on the markets where we have an established presence to provide more access and high-quality care to our patients,” Broussard said.
Similar to its home-based care operations, Humana has watched CenterWell Senior Primary Care make a clear impact. At its more mature centers, hospitalization and ER visits are down 12% year to date compared to 2019 pre-pandemic levels.
Humana isn’t the only organization investing in primary care centers. Others include CareMax Inc. (Nasdaq: CMAX), Cano Health Inc. (NYSE: CANO) and Oak Street Health Inc. (NYSE: OSH), for instance.
“Everything about CenterWell was designed with seniors in mind,” Matt Eirich, Humana’s chief growth officer, previously told Home Health Care News. “We pair this with a value-based reimbursement model that allows us to invest in proactive care, seeing our patients regularly, not just when they are ill, and investing time to help them manage their conditions.”
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