Humana Inc. (NYSE: HUM) is a payer that has become a health care provider through the 2018 acquisitions of Kindred Healthcare and the hospice provider Curo, which operates 245 locations in 22 states. The two acquisitions now form the nucleus of the company’s Humana at Home subsidiary.
Integrating Kindred and Curo into the insurance giant’s operations quickly became a top priority for Humana Senior Vice President Kirk Allen, who took the helm of Humana at Home in 2017.
Humana purchased Kindred in partnership with the private equity firms TPG Capital and Welsh, Carson, Anderson and Stowe for $4.1 billion, which translates into $9 per share of common stock. Kindred at Home is one of the largest hospice and home health care providers in the United States.
Humana and the same two private equity firms completed the Curo transaction in 2018 in a $1.4 billion transaction. The insurance giant is currently working to integrate Curo with Kindred’s hospice segment.
Hospice News caught up with Allen at the Senior Care 360° Strategy and Solutions Conference in Maryland to discuss the company’s growth trajectory, the direction of the hospice industry and the forthcoming Medicare Advantage hospice carve-in demonstration.
Humana is a payer that has become a health care provider. What insights have you gained through that experience?
We have learned that there is a real depth in the clinical relationship that exists between the hospice care providers and the hospice patient and the patient’s family, as well as how holistic the benefits of hospice are. There is a medical component. There is a spiritual component. There is bereavement care for the family following the patient’s death.
We are learning to take a look at those interactions and consider how we can leverage that time we spend with the [Humana] member in their homes, and how we can take full advantage of that moment of influence to really help serve that member.
What is next for Humana at Home in terms of growth?
Our biggest focus right now is integrating clinically between Humana and Kindred to better leverage the information we gain from both the provider side and the insurer side to ensure better care for our Humana members that are either in Kindred or Curo hospice. That’s our growth focus right now.
We had five pilot [hospice and home care] markets, and we are taking the early lessons from our work in those markets and applying them to operations in six states, Georgia, North Carolina, South Carolina, Virginia, West Virginia and Kentucky
Our clinical integration team is housed within Humana at Home and that team is taking information and best practices from Humana — and best practices and information from Kindred —and working with the local agencies to ensure those practices and information make it into the member’s care plan.
As policy and payment models continue to evolve, how do you see the hospice industry changing?
When I think about hospice I think about headwinds, and I believe this is true about home care in general. We have a lot of people aging into eligibility for home care and hospice coverage as well as eligibility for Medicare Advantage and regular Medicare.
We also are seeing what appears to be a willingness to loosen the regulations that govern what we can provide in terms of supplemental benefits, and we do believe that social determinants have an impact on people’s health and their ability to access care. So the degree to which we can use the supplemental benefits to be able to help intervene on those social determinants is going to have a positive impact on people’s health overall.
Also in hospice we are seeing a decline in the available workforce, so I think one of the big shifts we are going to see is thinking about ways the best hospice companies can accommodate those changes in the workforce. We are going to see large retirement numbers. Some of the industry numbers show as much as a 15%-30% shortfall in available staff by, depending on which study you read.
There is consensus that there is going to be a workforce challenge. The best companies of the future are going to have to take good care of their employees’ health and wellness. Because not only is the workforce diminishing, but you are competing with other health care continuum sections for that workforce, and caring for people who are terminally ill is potentially the most emotionally challenging aspect of health care.
We also have the potential for a carve-in of hospice for Medicare Advantage, and that will be a big change to take into account.
To that point, what might the Medicare Advantage carve-in mean for Humana at Home? How do you think it would impact your business?
We don’t have many specifics on what the payment model looks like yet. We know there is a lot of speculation and the [Center for Medicare & Medicaid Innovation] has been really good about working with us to get our input, but they have not yet released anything formally. So it’s hard to say what that will look like.
Some hospices have voiced concerns that there may be reductions in payments as a result of negotiations with Medicare Advantage plans. How would you respond to those concerns?
We are supportive of the [hospice benefit] payments that come from [the U.S. Centers for Medicare & Medicaid Services], and we want to make sure that Medicare Advantage plans have a payment high enough to support a quality program. We see hospice as an important program, so we would gravitate towards payments that will be appropriate for the provision of care that is going to take place.
Another thing we have advocated for, I think that successful hospices in the future are going to have the ability to intervene with palliative care programs, and to apply the palliative principles further upstream than they have in the past for members who are ill and have to make informed care decisions. So we will see growth in palliative care as well.