Humana Scaling Value-Based Home Health Model, Gearing Up for Hospice Divestiture

Humana Inc. (NYSE: HUM) has made substantial progress toward one of its major goals.

That goal, of course, is scaling and maturing a risk-bearing value-based model that manages the provision of home health, durable medical equipment and home infusion services. In regards to this goal, a strategic hire was another piece of the puzzle.

Last month, Humana announced that Dr. Andrew Agwunobi was named president of the company’s home solutions business. He will officially join the company at the end of February.


“As a doctor, he understands the value of care in the home, and why seniors want more of it,” Bruce Broussard, president and CEO of Humana, said Wednesday during a fourth-quarter 2021 earnings call. “[He understands] our vision, at Humana, of making it easier for people to get the care they need at home.”

The Louisville, Kentucky-based Humana’s home-based care business lines include Kindred at Home, which is being rebranded as CenterWell Home Health.

The insurer complements its internal capabilities with a wide range of external partnership agreements across the continuum of care. Humana is also the second-largest Medicare Advantage (MA) plan, supporting over 5 million beneficiaries.


Humana’s goal of scaling its value-based home health model is key because it feeds into the company’s other goal: covering nearly 50% of its MA members under this model within the next five years.

For now, the company’s model is active in South Florida and Texas, with plans for a rollout in Virginia and North Carolina in Q2. Humana also plans to expand into additional markets this year and early next year.

Once these initial phases of expansion are complete, Humana’s value-based home health model will provide coverage to about 15% of its MA members, Broussard noted.

Aside from expansion plans, Humana is focused on figuring out how certain services and offerings can best fit into specific markets in the long run.

“We have the opportunity to accelerate our return on investment by introducing select components of the full-based home health model, such as stand-alone DME or utilization management services in less dense markets,” Broussard said. “We believe approximately 60% to 70% of Humana members will be served by the comprehensive value-based model over time, while the remaining will be supported by select components based on the needs of the market.”

On the home-based care front, Broussard also expressed Humana’s commitment to continue growing Kindred at Home’s fee-for-service business.

During the Q4 call, Susan Diamond — chief financial officer of Humana — also detailed the company’s staffing efforts. Diamond likewise said the company is keeping an eye on admission and clinical staffing trends.

“[We] are making targeted investments to sustainably improve the recruitment and retention of nurses to position the businesses for further growth as trends begin to normalize,” Diamond said. “We improved home health and hospice nurse retention by double digits in 2021, positively growing net nurse headcount in the second half of the year. We also reduced the number of nurses who attrit in the first 90 days of employment in the second half of 2021 for the first time since the pandemic began.”

Also notable was Humana’s pledge to drive $1 billion of additional value “for the enterprise through cost savings, productivity initiatives and value acceleration from previous investments.”

“This will create the capacity to fund growth and investments in our Medicare Advantage business and further expansion of our health care service capabilities,” Broussard said.

Overall, Humana reported consolidated revenues of about $21.05 billion for Q4 2021, up from $19.06 billion in the same period the previous year. Humana’s health care services segment brought in roughly $8.4 million, up from about $7.2 million in the same quarter of 2020.

“Each of our health care services businesses performed consistently with expectations in the fourth quarter,” Diamond said. “The integration of Kindred at Home operations remains on track, and results post-acquisition have emerged as anticipated. Fourth-quarter 2021 home health admissions were up slightly while hospice experienced a low single-digit decline as compared to the fourth quarter of 2020.”

Speaking of hospice, Humana remains “committed to advancing” its divestment plan for Kindred at Home’s end-of-life care operations. A report earlier this week suggested that Humana has already begun a sales process targeting private equity.

“We have continued to explore various alternatives for the long-term ownership structure of the business and have initiated steps to reorganize the hospice business for standalone operations, while also making investments to improve clinician recruiting and retention to position the business for further growth,” Broussard said. “While we’re not able to share details today on a specific transaction structure or timing, we expect that we will be in a position to provide a meaningful update by our first quarter call.”

For the full year, Humana reported consolidated revenues of roughly $83.06 billion, an increase from about $77.15 billion in 2020.

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