[ad_1]
Reduced care costs and improved health outcomes are the two key growth levers in a frothy reimbursement and revenue climate for Humana’s (NYSE: HUM) health care business, CenterWell.
A focus on reducing total cost of care while improving health outcomes is a common thread among payers and providers alike in both spaces, Humana CFO Susan Diamond stated during the Wells Fargo Healthcare Conference.
The ability to demonstrate overall care cost savings and quality outcomes with home health and other aging services are two big levers Humana plans to pull as in its strategic growth plans, she said.
“Even in a fee-for-service space we continue to [see] a more traditional, full value-based model. Underlying all of that is a need to really improve the clinical model relative to what we see in the fee-for-service world today,” Diamond said during the conference on Wednesday. “A lot of work continues to be done. There is still what I would say early innings and a lot still to be learned about exactly what interventions are needed, what we need to bring to bear and what capabilities we need. That continues to be an emphasis within Humana that we can accelerate the value creation within home health.”
Last year Humana split its business into two segments, insurance and CenterWell, which houses its home-based care, primary care, pharmacy and specialty pharmacy services. The segment also offers primary care services for seniors through a joint venture with private equity firm Welsh, Carson, Anderson & Stowe (WCAS).
CenterWell has 249 health care centers nationwide with a census of roughly 266,000 patients across all of its service lines. The business has seen 16% growth in its center count and an 11% year-over-year increase in its annual patient census, according to Broussard.
Both segments face reimbursement pressures alongside growth opportunities, according to Diamond.
Challenges exist in both the fee-for-service and value-based reimbursement climates, though rate pressures in the former landscape are projected to bring heavier negative revenue impacts in 2024, she indicated.
Following the segment split, the CenterWell business is anticipated to represent an estimated 10% to 20% of the company’s overall revenue during the next three-years, according to Humana President and CEO Bruce Broussard.
“Our teams are working hard to mitigate all of it over the three-year implementation [period],” he said during the Wells Fargo conference.
Realizing the full potential return on its Centerwell investments will take a three-pronged approach involving cost structure initiatives on the payer side and creating efficiencies on the provider side, Broussard indicated.
“About a third of it is going to be a result of plan design changes [on] the payer side that will pick up through benefit changes. Another third will be a combination of leveraging the cost structure and gaining more productivity out of those clinical changes and the way [our] processes work,” Broussard said at the Wells Fargo conferene. “They’re gaining some more efficiencies in the physician areas and in the nursing staff. And then the third area will be around risk adjustment. We’ve just started these [processes], but we feel very confident that we can mitigate all the changes.”
Despite short-term headwinds, its home-based services play a key role in Humana’s growth plans, Broussard stated.
Humana has been zeroing in on home-based care through both its health care business and its value-based payment programs. The rollout of its value-based care model in certain home-based care markets has been a growth driver for the company.
“The belief we’ve always had that we need to migrate from a fee-for-service model to more of a value-based model broadly,” Diamond said. “We certainly have the work that we continue to support on a full value-based model to support the Humana membership under a capitated model.”
Humana covers roughly 815,000 home health Medicare Advantage beneficiaries under its value-based insurance model, largely with home health, infusion and durable medical equipment (DME) services, he stated.
[ad_2]
Source link