The Medicare Advantage (MA) program helped boost Humana’s profits to $6.39 diluted earnings per share in the first quarter of 2021 compared to the previous year’s diluted earnings per share of $3.56. Meanwhile, revenues for the health insurance giant rose to $20.7 billion, an increase compared to $18.9 billion a year earlier.
President and CEO Bruce Broussard said the first quarter results “reflect solid performance across each of the company’s segments fueled by strong individual Medicare Advantage and state-based membership growth and improved profitability in the group and specialty and healthcare services segments,” according to a transcript of an earnings call Wednesday.
Humana released its earnings a day after the company disclosed a blockbuster agreement to acquire the remaining 60% stake in Kindred at Home, the largest home health provider. The entire Kindred at Home transaction represents an enterprise value of $8.1 billion and is the largest acquisition in the company’s history.
“Our demonstrated ability to deliver savings to health plans through reduced hospitalizations, and the ability to drive increased referrals to Kindred at Home provides us the confidence to accelerate our 100% ownership of Kindred,” Broussard said, per the transcript. “Full ownership allows us to move from market testing to full scale implementation over time. We recognize the significant value we can deliver to members and patients by integrating this asset into our holistic approach to care.”
Broussard noted that home health industry is among the fastest-growing healthcare industries in the United States. However, the current volume-based, fee-for-service model has limited the innovation of home health, he said. Kindred at Home offers a way to “test and learn innovative clinical models in the home with a goal of evolving home health to value based payment models,” he said, according to the transcript.