onehome acquisition strategically aligns with
the pending full integration of Kindred at Home and will accelerate
the development of Humana’s Value-Based Home Health offering
Leading health and well-being company Humana Inc. (NYSE: HUM)
today announced that it has signed a definitive agreement to
acquire One Homecare Solutions (“onehome”) from WayPoint Capital
Partners (WayPoint), the private equity affiliate of a New
York-based family investment office. The acquisition will further
advance Humana’s strategy to build a value-based home health
offering. onehome is a provider of a variety of home-based
services, as well as a convener of home health services
stakeholders and a care and risk manager. onehome has pioneered a
valued-based model in Florida and Texas, and has served Humana
members since 2015.
onehome’s model creates one integrated point of accountability
that coordinates the needs of patients, physicians, hospitals and
health plans for home-based patient care. onehome currently manages
a range of post-acute needs including infusion care, nursing,
occupational therapy, physical therapy and durable medical
equipment (DME) services at patients' homes, as well as appropriate
site of care placement through its skilled nursing facility (SNF)
at home programs.
The acquisition of onehome aligns with Humana’s recent
announcement to fully acquire and integrate Kindred at Home, and
provides a number of key capabilities that will enable Humana to
more effectively deliver value-based home health at a national
scale:
- onehome has significant experience with risk-based contracting,
and has fully-capitated models in place in Florida and Texas that
will provide valuable insights for the expansion of similar
contracting in other states.
- onehome has developed fully-dedicated network management and
utilization management systems that can create greater efficiencies
for the administration of in-home patient visits.
- onehome owns and manages home-based DME and infusion services
for members in its core geographies that can be expanded to other
markets and deliver more simplified coordination of these services
for patients and providers.
- onehome’s ownership of DME services can deliver greater value
and better outcomes through reduced waste and more consistent
equipment utilization by members.
“At Humana, we are implementing a strategy to build a new
Value-Based Home Health model that will improve patient outcomes,
increase satisfaction for patients and providers, and provide
greater value for health plan partners,” said Susan Diamond,
Segment President for Humana’s Home Business and Humana’s Interim
Chief Financial Officer. “The acquisition of onehome is a key
component of that strategy. It complements our recent announcement
to fully acquire and integrate Kindred at Home, and brings together
additional capabilities that will allow Humana to deliver
value-based home health at a national scale. By combining onehome’s
value-based approach with Kindred's home health services and
Humana's analytical capabilities and clinical expertise, we believe
we can create a transformational value-based offering to serve more
people, including non-Humana plan members, nationwide.”
“Since first launching onehome in 2013, we have had a front row
seat at the care-in-the-home revolution that is driven by our
society’s desire to positively impact clinical outcomes,
affordability, and patient experience,” said Ramon Falero, Chief
Executive Officer and Co-Founder of onehome. “We built the onehome
model with a focus on integrating all key home-based patient care
delivery needs with risk-taking capabilities and robust technology.
We have had the privilege of serving millions of patients with this
model – the need for which has only increased during the COVID-19
pandemic. We are honored to now have the opportunity to expand our
model as part of the Humana team, with whom we share the mission of
bringing healing home.”
“We are proud of the longstanding partnership between onehome
and Humana, and their shared vision to offer value-based care in
the home,” said Philip Edmunds, Partner at WayPoint Capital
Partners. “Through significant investment in clinical innovation
and a fully integrated delivery system for post-acute patient
needs, onehome enables better outcomes for patients recovering at
home alongside greater levels of coordination and insight for
health plan partners.”
Financial terms were not disclosed. The acquisition is expected
to close in the second quarter of 2021 and is subject to customary
state and federal regulatory approvals. The company does not
anticipate a material impact to 2021 earnings from this pending
transaction.
For Humana, Ernst & Young is acting as financial advisor and
Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal
advisor. For onehome, Alvarez & Marsal and MTS Health Partners
L.P. are acting as financial advisors and Winston & Strawn LLP
is acting as legal advisor.
Cautionary Statement
This news release includes forward-looking statements regarding
Humana within the meaning of the Private Securities Litigation
Reform Act of 1995. When used in investor presentations, press
releases, Securities and Exchange Commission (SEC) filings, and in
oral statements made by or with the approval of one 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 identify such forward-looking
statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and
assumptions, including, among other things, information set forth
in the “Risk Factors” section of the company’s SEC filings, a
summary of which includes but is not limited to the following:
- If Humana does not design and price its products properly and
competitively, if the premiums Humana receives are insufficient to
cover the cost of healthcare services delivered to its members, if
the company is unable to implement clinical initiatives to provide
a better healthcare experience for its members, lower costs and
appropriately document the risk profile of its members, or if its
estimates of benefits expense are inadequate, Humana’s
profitability could be materially adversely affected. Humana
estimates the costs of its benefit expense payments, and designs
and prices its products accordingly, using actuarial methods and
assumptions based upon, among other relevant factors, claim payment
patterns, medical cost inflation, and historical developments such
as claim inventory levels and claim receipt patterns. The company
continually reviews estimates of future payments relating to
benefit expenses for services incurred in the current and prior
periods and makes necessary adjustments to its reserves, including
premium deficiency reserves, where appropriate. These estimates
involve extensive judgment, and have considerable inherent
variability because they are extremely sensitive to changes in
claim payment patterns and medical cost trends. Accordingly,
Humana's reserves may be insufficient.
- If Humana fails to effectively implement its operational and
strategic initiatives, particularly its Medicare initiatives and
state-based contract strategy, the company’s business may be
materially adversely affected, which is of particular importance
given the concentration of the company’s revenues in these
products. In addition, there can be no assurances that the company
will be successful in maintaining or improving its Star ratings in
future years.
- If Humana fails to properly maintain the integrity of its data,
to strategically maintain existing or implement new information
systems, to protect Humana’s proprietary rights to its systems, or
to defend against cyber-security attacks or prevent other privacy
or data security incidents that result in security breaches that
disrupt our operations or in the unintended dissemination of
sensitive personal information or proprietary or confidential
information, the company’s business may be materially adversely
affected.
- Humana is involved in various legal actions, or disputes that
could lead to legal actions (such as, among other things, provider
contract disputes and qui tam litigation brought by individuals on
behalf of the government), governmental and internal
investigations, and routine internal review of business processes
any of which, if resolved unfavorably to the company, could result
in substantial monetary damages or changes in its business
practices. Increased litigation and negative publicity could also
increase the company’s cost of doing business.
- As a government contractor, Humana is exposed to risks that may
materially adversely affect its business or its willingness or
ability to participate in government healthcare programs including,
among other things, loss of material government contracts,
governmental audits and investigations, potential inadequacy of
government determined payment rates, potential restrictions on
profitability, including by comparison of profitability of the
company’s Medicare Advantage business to non-Medicare Advantage
business, or other changes in the governmental programs in which
Humana participates. Changes to the risk-adjustment model utilized
by CMS to adjust premiums paid to Medicare Advantage, or MA, plans
according to the health status of covered members, including
proposed changes to the methodology used by CMS for risk adjustment
data validation audits that fail to address adequately the
statutory requirement of actuarial equivalence, if implemented,
could have a material adverse effect on our operating results,
financial position and cash flows.
- Humana's business activities are subject to substantial
government regulation. New laws or regulations, or legislative,
judicial, or regulatory changes in existing laws or regulations or
their manner of application could increase the company's cost of
doing business and have a material adverse effect on Humana’s
results of operations (including restricting revenue, enrollment
and premium growth in certain products and market segments,
restricting the company’s ability to expand into new markets,
increasing the company’s medical and operating costs by, among
other things, requiring a minimum benefit ratio on insured
products, lowering the company’s Medicare payment rates and
increasing the company’s expenses associated with a non-deductible
health insurance industry fee and other assessments); the company’s
financial position (including the company’s ability to maintain the
value of its goodwill); and the company’s cash flows.
- Humana’s failure to manage acquisitions, divestitures and other
significant transactions successfully may have a material adverse
effect on the company’s results of operations, financial position,
and cash flows.
- If Humana fails to develop and maintain satisfactory
relationships with the providers of care to its members, the
company’s business may be adversely affected.
- Humana’s pharmacy business is highly competitive and subjects
it to regulations and supply chain risks in addition to those the
company faces with its core health benefits businesses.
- Changes in the prescription drug industry pricing benchmarks
may adversely affect Humana’s financial performance.
- Humana’s ability to obtain funds from certain of its licensed
subsidiaries is restricted by state insurance regulations.
- Downgrades in Humana’s debt ratings, 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 may adversely affect Humana’s business.
- The spread of, and response to, the novel coronavirus, or
COVID-19, underscores certain risks Humana faces, including those
discussed above, and the ongoing, heightened uncertainty created by
the pandemic precludes any prediction as to the ultimate adverse
impact to Humana of COVID-19. To the extent that the spread of
COVID-19 is not contained, the premiums the company charges may
prove to be insufficient to cover the cost of health care services
delivered to its members, which may increase significantly as a
result of higher utilization rates of medical facilities and
services and other increases in associated hospital and
pharmaceutical costs. Humana may also experience increased costs or
decreased revenues if, as a result of the company’s members being
unable or unwilling to see their providers due to actions taken to
mitigate the spread of COVID-19, Humana is unable to implement
clinical initiatives to manage health care costs and chronic
conditions of its members, and appropriately document their risk
profiles. In addition, Humana is offering, and has been mandated by
legislative and regulatory action (including the Families First Act
and CARES Act) to provide, certain expanded benefit coverage to its
members, such as waiving out of pocket costs for COVID-19 testing
and treatment. Humana is also taking actions designed to help
provide financial and administrative relief for the health care
provider community. Such measures and any further steps taken by
Humana, or governmental action, to continue to respond to and
address the ongoing impact of COVID-19 (including further expansion
or modification of the services delivered to its members, the
adoption or modification of regulatory requirements associated with
those services and the costs and challenges associated with
ensuring timely compliance with such requirements), to provide
further relief for the health care provider community, or in
connection with the relaxation of stay-at-home and physical
distancing orders and other restrictions on movement and economic
activity, including the potential for widespread testing and
therapeutic treatments and the distribution and administration of
COVID-19 vaccines, could adversely impact the company’s
profitability. The spread and impact of COVID-19, or actions taken
to mitigate this spread, could have material and adverse effects on
Humana’s ability to operate effectively, including as a result of
the complete or partial closure of facilities or labor shortages.
Disruptions in public and private infrastructure, including
communications, availability of in-person sales and marketing
channels, financial services and supply chains, could materially
and adversely disrupt the company’s normal business operations.
Humana has transitioned a significant subset of its employee
population to a remote work environment in an effort to mitigate
the spread of COVID-19, as have a number of the company’s
third-party service providers, which may 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 information or proprietary or
confidential information about the company or its members or other
third-parties. The outbreak of COVID-19 has severely impacted
global economic activity, including the businesses of some of
Humana’s commercial customers, and caused significant volatility
and negative pressure in the financial markets. In addition to
disrupting Humana’s operations, these developments may adversely
affect the timing of commercial customer premium collections and
corresponding claim payments, the value of the company’s investment
portfolio, or future liquidity needs. The ongoing, heightened
uncertainty created by the pandemic precludes any prediction as to
the ultimate adverse impact to Humana of COVID-19. Humana is
continuing to monitor the spread of COVID-19, changes to the
company’s benefit coverages, and the ongoing costs and business
impacts of dealing with COVID-19, including the potential costs and
impacts associated with 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 and its impact on Humana’s business, results of
operations, financial position, and cash flows is uncertain, but
such impacts could be material to the company’s business, results
of operations, financial position and cash flows.
In making forward-looking statements, Humana is not undertaking
to address or update them in future filings or communications
regarding its business or results. In light of these risks,
uncertainties, and assumptions, the forward-looking events
discussed herein may or may not occur. There also may be other
risks that the company is unable to predict at this time. Any of
these risks and uncertainties may cause actual results to differ
materially from the results discussed in the forward-looking
statements.
Humana advises investors to read the following documents as
filed by the company with the SEC for further discussion both of
the risks it faces and its historical performance:
- Form 10-K for the year ended December 31, 2020; and
- Form 8-Ks filed during 2021.
About Humana
Humana Inc. is committed to helping our millions of medical and
specialty members achieve their best health. Our successful history
in care delivery and health plan administration is helping us
create a new kind of integrated care with the power to improve
health and well-being and lower costs. Our efforts are leading to a
better quality of life for people with Medicare, families,
individuals, military service personnel, and communities at
large.
To accomplish that, we support physicians and other health care
professionals as they work to deliver the right care in the right
place for their patients, our members. Our range of clinical
capabilities, resources and tools – such as in-home care,
behavioral health, pharmacy services, data analytics and wellness
solutions – combine to produce a simplified experience that makes
health care easier to navigate and more effective.
More information regarding Humana is available to investors via
the Investor Relations page of the company’s website at humana.com,
including copies of:
- Annual reports to stockholders;
- Securities and Exchange Commission filings;
- Most recent investor conference presentations;
- Quarterly earnings news releases and conference calls;
- Calendar of events; and
- Corporate Governance information.
About onehome
One Homecare Solutions (“onehome”) is the result of years of
planning and growth, working to meet the needs of health plans by
serving their members through a value-based, full-risk model for
integrated home-based services. The company's model creates one
integrated point of accounting that coordinates physicians,
hospitals and health plans, serving more than one million health
plan members nationwide. onehome manages a full range of post-acute
patient needs from infusion care to nursing, OT, PT and durable
medical equipment services at patients' homes. As home healthcare
has grown as the preferred method of ongoing care, onehome has been
instrumental in helping to improve patient outcomes and quality of
life, reducing hospital readmission rates and lowering costs for
health plans.
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version on businesswire.com: https://www.businesswire.com/news/home/20210614005231/en/
Amy Smith Humana Investor Relations (502) 580-2811 e-mail:
Amysmith@humana.com
Mark Taylor Humana Corporate Communications (317) 753-0345
e-mail: MTaylor108@humana.com
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