LOUISVILLE, Ky. & NEW YORK–(BUSINESS WIRE)–Humana Inc.’s (NYSE: HUM) CenterWell Senior Primary Care and Welsh, Carson, Anderson & Stowe (“WCAS”) have established a second three way partnership (“JV”) to further expand access to value-based primary care clinics for Medicare patients. The brand new JV will deploy as much as $1.2 billion of committed capital to develop roughly 100 recent senior-focused, payer-agnostic primary care clinics between 2023 and 2025 and operate them to profitability. This JV between Humana’s CenterWell Senior Primary Care and WCAS follows an earlier JV that’s currently deploying as much as $800 million of capital to open 67 clinics by early 2023 and support their ongoing operations.
WCAS, a healthcare and technology-focused investment firm, may have majority ownership of the JV, while Humana will own a minority stake. All de novo clinics developed through the Humana-WCAS joint ventures will probably be managed and operated under Humana’s CenterWell Senior Primary Care brand.
Because the nation’s largest provider of senior-focused primary care, CenterWell Senior Primary Care is actively scaling its platform through a mix of de novo expansion and inorganic growth. As of March 31, 2022, Humana’s Primary Care Organization (“PCO”) operates a complete of 214 senior-focused primary care clinics, including 37 under the present three way partnership with WCAS and 177 other wholly owned centers. Together, these 214 clinics – operating under the CenterWell Senior Primary Care and Conviva Care Solutions brands – serve roughly 180,000 patients in Medicare value-based arrangements, while also supporting 58,000 patients under Independent Practice Association (IPA) arrangements through Conviva Care Solutions. By the tip of 2022, Humana expects to serve Medicare patients in roughly 250 CenterWell and Conviva clinics, and intends so as to add 30 to 50 additional CenterWell clinics per yr through 2025.
“We’re excited to grow our partnership with Humana to enhance access to senior-focused, value-based primary care across the US,” said David Caluori, General Partner at WCAS. “We stay up for continuing our work alongside the CenterWell team to deploy their care model at scale.”
“Physicians and patients alike are coming to acknowledge the various benefits of our unique, senior-focused primary care model,” said Reneé Buckingham, President of Humana’s Primary Care Organization which operates each CenterWell Senior Primary Care and Conviva Care Centers. “Doctors and nurses spending more time with patients, paying greater attention to each the physical and mental elements of health, and following a team-based approach all allow for personalized, value-based care that helps improve lives. Early success has led to increased interest in our payer-agnostic model, and under this recent three way partnership, we stay up for significantly expanding our geographic footprint and serving much more patients in additional communities across the country.”
Under the brand new JV agreement, CenterWell Senior Primary Care will receive a management fee, including performance-based incentives, for the management of all three way partnership clinics. As well as, the agreement features a series of put and call options through which Humana may acquire WCAS’s interest within the three way partnership starting in 2028 or five years after the opening of every cohort of clinics, and thru which WCAS may require Humana to buy its interest within the three way partnership starting in 2030 or seven years after the opening of every cohort of clinics.
The transaction is predicted to have an immaterial impact to Humana’s earnings in 2022.
About CenterWell
At CenterWell, a part of Humana Inc., we create care experiences that put patients at the middle. The result’s healthcare that gives ease, comprehensiveness and, most of all, a private approach. Our primary care, pharmacy, and residential health services transcend traditional clinical settings and outcomes, working with patients and their care teams to shut gaps and take their whole health under consideration.
Because when care is made relevant and accessible, patients can lead happier and healthier lives.
The primary services to adopt the CenterWell name were Humana’s senior-focused primary care centers. The experienced care teams at CenterWell Senior Primary Care provide comprehensive support services to totally understand the needs of their patients and improve health outcomes.
The Home Health division of Humana-owned Kindred at House is within the strategy of transitioning to the CenterWell brand in 2022 – becoming CenterWell Home Health. Also in 2022, Humana’s pharmacy and specialty pharmacy businesses will tackle the CenterWell name, becoming CenterWell Pharmacy and CenterWell Specialty Pharmacy.
In recent times, Humana has significantly expanded its healthcare services capabilities to higher serve its medical members and to significantly strengthen its payer-agnostic care offerings. These services help deliver on the promise of higher quality and health outcomes, lower costs and a less complicated, more personalized experience for the people they touch.
The CenterWell logo encompasses a blossom with three petals symbolizing physical, emotional and social wellness – necessary elements of whole-person health that CenterWell care services address.
About Humana
Humana Inc. is committed to helping our hundreds of thousands of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration helps us create a recent form of integrated care with the facility to enhance health and well-being and lower costs. Our efforts are resulting in a greater quality of life for individuals with Medicare, families, individuals, military service personnel, and communities at large.
To perform that, we support physicians and other health care professionals as they work to deliver the suitable care in the suitable place for his or her patients, our members. Our range of clinical capabilities, resources and tools – similar to in-home care, behavioral health, pharmacy services, data analytics and wellness solutions – mix to supply a simplified experience with the goal of constructing health care easier to navigate and simpler.
More information regarding Humana is obtainable to investors via the Investor Relations page of the corporate’s website at humana.com, including copies of:
- Annual reports to stockholders
- Securities and Exchange Commission filings
- Most up-to-date investor conference presentations
- Quarterly earnings news releases and conference calls
- Calendar of events
- Corporate Governance information.
About Welsh, Carson, Anderson & Stowe
WCAS is a number one U.S. private equity firm focused on the healthcare and technology industries. Since its founding in 1979, the firm’s strategy has been to partner with outstanding management teams and construct value for its investors through a mix of operational improvements, growth initiatives, and strategic acquisitions. The firm has raised and managed funds totaling over $30 billion of committed capital.
Humana Cautionary Statement
This news release includes forward-looking statements regarding Humana inside the meaning of the Private Securities Litigation Reform Act of 1995. When utilized in investor presentations, press releases, Securities and Exchange Commission (SEC) filings, and in oral statements made by or with the approval of one in every of Humana’s executive officers, the words or phrases like “expects,” “believes,” “anticipates,” “intends,” “likely will result,” “estimates,” “projects” or variations of such words and similar expressions are intended to discover such forward-looking statements.
These forward-looking statements are usually not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, amongst other things, information set forth within the “Risk Aspects” section of the corporate’s SEC filings, a summary of which incorporates but is just not limited to the next:
- If Humana doesn’t design and price its products properly and competitively, if the premiums Humana receives are insufficient to cover the associated fee of healthcare services delivered to its members, if the corporate is unable to implement clinical initiatives to supply a greater healthcare experience for its members, lower costs and appropriately document the chance profile of its members, or if its estimates of advantages expense are inadequate, Humana’s profitability might be materially adversely affected. Humana estimates the prices of its profit expense payments, and designs and costs its products accordingly, using actuarial methods and assumptions based upon, amongst other relevant aspects, claim payment patterns, medical cost inflation, and historical developments similar to claim inventory levels and claim receipt patterns. The corporate continually reviews estimates of future payments referring to profit expenses for services incurred in the present and prior periods and makes mandatory adjustments to its reserves, including premium deficiency reserves, where appropriate. These estimates involve extensive judgment, and have considerable inherent variability because they’re extremely sensitive to changes in claim payment patterns and medical cost trends. Accordingly, Humana’s reserves could also be insufficient.
- If Humana fails to effectively implement its operational and strategic initiatives, particularly its Medicare initiatives and state-based contract strategy, the corporate’s business could also be materially adversely affected, which is of particular importance given the concentration of the corporate’s revenues in these products. As well as, there may be no assurances that the corporate will probably be successful in maintaining or improving its Star rankings in future years.
- If Humana fails to properly maintain the integrity of its data, to strategically maintain existing or implement recent information systems, to guard Humana’s proprietary rights to its systems, or to defend against cyber-security attacks or prevent other privacy or data security incidents that lead to security breaches that disrupt the corporate’s operations or within the unintentional dissemination of sensitive personal information or proprietary or confidential information, the corporate’s business could also be materially adversely affected.
- Humana is involved in various legal actions, or disputes that could lead on to legal actions (similar to, amongst other things, provider contract disputes and qui tam litigation brought by individuals on behalf of the federal government), governmental and internal investigations, and routine internal review of business processes any of which, if resolved unfavorably to the corporate, could lead to substantial monetary damages or changes in its business practices. Increased litigation and negative publicity could also increase the corporate’s cost of doing business.
- As a government contractor, Humana is exposed to risks which will materially adversely affect its business or its willingness or ability to take part in government healthcare programs including, amongst other things, loss of fabric government contracts; governmental audits and investigations; potential inadequacy of presidency determined payment rates; potential restrictions on profitability; including by comparison of profitability of the corporate’s Medicare Advantage business to non-Medicare Advantage business; or other changes within the governmental programs wherein Humana participates. Changes to the risk-adjustment model utilized by CMS to regulate premiums paid to Medicare Advantage, or MA, plans in accordance with the health status of covered members, including proposed changes to the methodology utilized by CMS for risk adjustment data validation audits that fail to deal with adequately the statutory requirement of actuarial equivalence, if implemented, could have a fabric adversarial effect on the corporate’s operating results, financial position and money flows.
- Humana’s business activities are subject to substantial government regulation. Latest laws or regulations, or legislative, judicial, or regulatory changes in existing laws or regulations or their manner of application could increase the corporate’s cost of doing business and have a fabric adversarial effect on Humana’s results of operations (including restricting revenue, enrollment and premium growth in certain products and market segments, restricting the corporate’s ability to expand into recent markets, increasing the corporate’s medical and operating costs by, amongst other things, requiring a minimum profit ratio on insured products, lowering the corporate’s Medicare payment rates and increasing the corporate’s expenses related to a non-deductible medical health insurance industry fee and other assessments); the corporate’s financial position (including the corporate’s ability to keep up the worth of its goodwill); and the corporate’s money flows.
- Humana’s failure to administer acquisitions, divestitures and other significant transactions successfully could have a fabric adversarial effect on the corporate’s results of operations, financial position, and money flows.
- If Humana fails to develop and maintain satisfactory relationships with the providers of care to its members, the corporate’s business could also be adversely affected.
- Humana faces significant competition in attracting and retaining talented employees. Further, managing succession for, and retention of, key executives is critical to the Company’s success, and its failure to achieve this could adversely affect the Company’s businesses, operating results and/or future performance.
- Humana’s pharmacy business is extremely competitive and subjects it to regulations and provide chain risks along with those the corporate faces with its core health advantages businesses.
- Changes within the prescription drug industry pricing benchmarks may adversely affect Humana’s financial performance.
- Humana’s ability to acquire funds from certain of its licensed subsidiaries is restricted by state insurance regulations.
- Downgrades in Humana’s debt rankings, should they occur, may adversely affect its business, results of operations, and financial condition.
- The securities and credit markets may experience volatility and disruption, which can adversely affect Humana’s business.
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The spread of, and response to, the novel coronavirus, or COVID-19, underscores certain risks Humana faces, including those discussed above, and the continuing, heightened uncertainty created by the pandemic precludes any prediction as to the final word adversarial impact to Humana of COVID-19.
Because the COVID-19 pandemic continues, the premiums the corporate charges may prove to be insufficient to cover the associated fee of health care services delivered to its members, each of which might be impacted by many aspects, including the impacts that Humana has experienced, and should proceed to experience, to its revenues resulting from limitations on its ability to implement clinical initiatives to administer health care costs and chronic conditions of its members, and appropriately document their risk profiles, consequently of the corporate’s members being unable or unwilling to see their providers resulting from actions taken to mitigate the spread of COVID-19; increased costs which will result from higher utilization rates of medical facilities and services and other increases in associated hospital and pharmaceutical costs; and shifts in the corporate’s premium and medical claims cost trends to reflect the demographic impact of upper mortality throughout the COVID-19 pandemic. As well as, Humana is offering, and has been mandated by legislative and regulatory motion (including the Families First Act and CARES Act) to supply, certain expanded profit coverage to its members, similar to waiving, or reimbursing, certain costs for COVID-19 testing, vaccinations and treatment. These measures taken by Humana, or governmental motion, to reply to the continuing impact of COVID-19 (including further expansion or modification of the services delivered to its members, the adoption or modification of regulatory requirements related to those services and the prices and challenges related to ensuring timely compliance with such requirements), and the potential for widespread testing, treatments and the distribution and administration of COVID-19 vaccines, could adversely impact the corporate’s profitability.
The spread and impact of COVID-19 and extra variants, or actions taken to mitigate this spread, could have material and adversarial effects on Humana’s ability to operate effectively, including consequently of the whole or partial closure of facilities or labor shortages. Disruptions in private and non-private infrastructure, including communications, availability of in-person sales and marketing channels, financial services and provide chains, could materially and adversely disrupt the corporate’s normal business operations. A big subset of the corporate’s and the corporate’s third party providers’ worker population are in a distant work environment in an effort to mitigate the spread of COVID-19, which can exacerbate certain risks to Humana’s business, including an increased demand for information technology resources, increased risk of phishing and other cybersecurity attacks, and increased risk of unauthorized dissemination of sensitive personal, proprietary, or confidential information. The continued COVID-19 pandemic has severely impacted global economic activity, including the companies of a few of Humana’s industrial customers, and caused significant volatility and negative pressure within the financial markets. Along with disrupting Humana’s operations, these developments may adversely affect the timing of business customer premium collections and corresponding claim payments, the worth of the corporate’s investment portfolio, or future liquidity needs.
The continued, heightened uncertainty created by the pandemic precludes any prediction as to the final word adversarial impact to Humana of COVID-19. Humana is continuous to watch the spread of COVID-19, changes to the corporate’s profit coverages, and the continuing costs and business impacts of coping with COVID-19, including the potential costs and impacts related to lifting or reimposing restrictions on movement and economic activity, the timing and degree in resumption of demand for deferred healthcare services, the pace of administration of COVID-19 vaccines and the effectiveness of those vaccines, and related risks. The magnitude and duration of the pandemic remain uncertain, and its impact on Humana’s business, results of operations, financial position, and money flows might be material.
In making forward-looking statements, Humana is just not undertaking to deal with or update them in future filings or communications regarding its business or results. In light of those risks, uncertainties, and assumptions, the forward-looking events discussed herein may or may not occur. There also could also be other risks that the corporate is unable to predict at the moment. Any of those risks and uncertainties may cause actual results to differ materially from the outcomes discussed within the forward-looking statements.
Humana advises investors to read the next documents as filed by the corporate with the SEC for further discussion each of the risks it faces and its historical performance:
- Form 10-K for the yr ended December 31, 2021; and
- Form 8-Ks filed during 2022.
