Humana Continues Home Healthcare Expansion in $8.1B Acquisition

Humana announced that it has signed an agreement to acquire the rest of the Kindred at Home program as part of its home healthcare expansion.

“We continue to invest in assets that allow Humana to better manage the holistic needs of our members and patients by expanding care in the home, including primary care, telehealth, and emergency room care, while also addressing social determinants of health,” said Bruce Broussard, president and chief executive officer at Humana.

The value of the acquisition will be around $8.1 billion. The home healthcare organization has 43,000 caregivers and a reach of more than 550,000 patients in 40 states. Almost two-thirds of Humana’s individual Medicare Advantage plan membership (65 percent) has access to Kindred at Home services, geographically.

If the deal receives the necessary state and federal approvals, Humana projected that it will close in the third quarter of 2021. The payer did not expect the deal to affect 2021 earnings but indicated that it may have some influence over financial flexibility in 2022.

The payer has been working with Kindred at Home to improve its adverse event prevention capabilities and forging a data analytics platform to support care coordination between Humana and the home healthcare company.

“Since our initial investment in Kindred at Home, in partnership with the Sponsors and Kindred at Home management, we’ve learned a great deal about the home health space and recognize the significant value we can deliver to members and patients by integrating this asset into our holistic approach to care,” Broussard said.

“Fully integrating Kindred at Home will enable us to more closely align incentives to focus on improving patient outcomes and on reducing the total cost of care.”

The payer initiated its partial acquisition of Kindred Healthcare in 2017. The agreement allotted 40 percent of the Kindred at Home division’s ownership to Humana for $800 million and the other 60 percent to two investor groups—TPG Capital and Welsh, Carson, Anderson & Stowe.

Now four years later, Humana will divest a majority of the Kindred at Home hospice and community care functions once it has acquired the remaining 60 percent of Kindred at Home.

Kindred at Home’s home healthcare program will become part of the payer’s Home Solutions division under the leadership of Susan Diamond.

“Our work with Kindred at Home allowed us to learn more about the advanced clinical models needed, proved that we can execute on the needed innovation, demonstrated that we can drive penetration and gave us confidence we can support a higher acuity patient by leveraging the other home-based assets and capabilities we’ve assembled,” said Diamond.

“Kindred at Home continues to demonstrate superior patient outcomes, including reduced hospitalizations, readmissions, and ER utilization even as their penetration of Humana episodes increased from 8 percent to 19 percent in markets with geographic overlap.”

Upon finalizing the acquisition, the payer will integrate this division into its new brand, CenterWell, and  Kindred at Home will exchange its current name for “CenterWell Home Health.”

“This is critical to deploying at scale a value-based, advanced home health model that makes it easier for patients and providers to benefit from our full continuum of home-based capabilities, leveraging the best channel to deliver the right care needed at the right time,” explained Broussard.

Humana announced its new CenterWell brand in March 2021. CenterWell will be a collection of senior services including some payer-agnostic services. The transition is expected to take about a year or two. It began in April 2021 with the integration of Partners in Primary Care, a payer-agnostic senior service now known as “CenterWell Senior Primary Care.”

The coronavirus pandemic effectively revealed the strengths and the weaknesses of home healthcare programs, specifically in Medicare.

As the healthcare industry shifted dramatically away from in-person care and toward home healthcare and remote patient monitoring, the need for improvements to home healthcare strategies and coverage became clear.

Medicare did not cover home healthcare completely, a Commonwealth Fund report found. Racial disparities abound in patient outcomes, the researchers discovered. Furthermore, the telehealth policies which spurred growth across the industry did very little to support home healthcare telehealth utilization.

As a result, payers like Humana are expected to focus on improving their Medicare Advantage home healthcare services in 2021.