Humana’s first quarter profit for 2016 plunged 46% thanks in part to continued struggles in its individual health insurance business (including in Obamacare’s statewide exchanges, some of which the company may exit) and a rise in medical-loss ratio, or the percentage of plan holders’ premiums used to finance medical services. Much of Humana’s prowess stems from its towering presence in the Medicare Advantage market, which represents 2.8 million of its accounts. The managed care insurance giant, which is being purchased by rival Aetna in a $37 billion deal set to close later this year, has been touting forward-looking projects such as “bundled payment” reimbursement models and a widespread initiative to boost community health in recent months. For instance, Humana announced an ambitious goal last year to improve the health of communities it serves through a bevy of integrated care experiments. That includes obesity reduction projects in counties like Bell County, Kentucky (among the most obese in the nation) which involve peer-to-peer counseling and nutritional education. While wellness programs’ long-term effectiveness has been questioned, Humana recently reported that an 8,000-person study of its own employees showed that the HumanaVitality initiative appreciably lowered hospital visits and unscheduled absences by participants–results the firm hopes to replicate among other plan holders next year.
News about Humana
The stocks of 'target' companies are often better-off single.
Aetna chief Mark Bertolini isn't mincing words.
Multibillion dollar deals gone sour
On the bright side (for Humana), Aetna will pay Humana a $1 billion breakup fee.