Humana’s Kindred at Home Sees Slight Downturn Due to Coronavirus

Doubling down on its efforts around social determinants of health and expanding access to telehealth services are just some of the ways Humana Inc. (NYSE: HUM) has attempted to address the ongoing COVID-19 public health emergency.

The company has also contributed roughly $50 million to national relief initiatives via the Humana Foundation.

“We are committed to continuing to invest to minimize the impact of this global crisis on our members, provider partners, employer groups and the communities we serve while advancing the long-term sustainability of our company and the health care system as a whole,” Brian Kane, CFO of Humana, said during a first-quarter earnings call on Wednesday.

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Louisville, Kentucky-based Humana is both a payer and in-home care provider. Its home-based care business lines include Humana At Home and Kindred at Home, the largest home health provider in the U.S., according to LexisNexis.

When it comes to home health care — specifically, Kindred at Home — Humana has been negatively impacted by the COVID-19 emergency.

That downturn is mostly due to a decrease in new home health admissions.

“In our provider businesses — which are largely at risk — we saw lower utilization in the last two weeks of March and throughout April,” Kane said during the call.

This news comes after last quarter’s show of marked improvement. In February, during a 2019 Q4 earnings call, Humana executives reported that Kindred at Home had been performing well following some initial integration speedbumps.

In 2018, Humana — along with private equity firms TPG Capital and Welsh, Carson, Anderson & Stowe — gained control of home health company Kindred at Home following a $4.1 billion deal.

Along with Curo Health Services and Humana’s legacy Humana At Home operations, Kindred at Home has bolstered the insurance giant’s efforts in the home — making the company one to watch for those who follow the home health industry.

Despite the slightly down admissions at Kindred at Home, the COVID-19 virus has had a minimal impact on Humana’s Q1 financials.

“During the last few weeks of March, the spread of COVID-19 began to affect our business,” Kane said. “Though the impact occurred late enough in the quarter, such that in totality, the virus did not have a material impact on our financial results.”

Overall, the company’s health care services segment, which includes Kindred at Home, saw revenues of $7.09 billion in Q1. This is a 16% increase from $6.10 billion in Q1 2019.

Humana’s Q1 consolidated revenues totaled $18.94 billion, up from $16.11 billion in Q1 2019, an increase of 18%.

Humana attributes the revenue increases to its Medicare Advantage (MA) membership growth and an increase in pharmacy revenues, as the company allowed early prescription refills to aid its members in light of COVID-19.

While Humana did not dive into too many specifics when it comes to its home-based care strategy, CEO and President Bruce Broussard did suggest it’s an area the company is further looking to build upon.

“Home is continuing to be an area where we’re seeing a lot more interest in the ability to provide more acute services,” Broussard said. “Those services are primary care services that would normally be in an office setting, even getting to a hospital in the home area even if that’s in the home.”

Medicare Advantage update

Humana is one of the largest MA plans in the U.S.

Humana’s projected 2020 individual MA membership growth is 300,000 to 350,000 members, compared to its estimated 270,000 to 330,000 members last quarter. This represents a 9% year-over-year growth rate.

In 2020, there are roughly 67.7 million Medicare beneficiaries — and 24.1 million of them are enrolled in MA plans, according to the Kaiser Family Foundation.

Combined, UnitedHealthcare and Humana account for 44% of all MA enrollees in the U.S.

“The team is working exceedingly hard to understand the potential impacts that COVID-19 may have on our premium and cost next year,” Kane said. “Our philosophy is to take a prudent approach to our bids that is financially sound but also offers a compelling product to our customers.”

During the call, Humana also touched on the importance of partnerships between the public and private sectors during the COVID-19 emergency.

“The leadership of the administration, Congress, governors and mayors across the nation combined with the ingenuity of the private sector is the right foundation to build on moving forward,” Broussard said during the call.

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