PHILADELPHIA—Humana's recently announced joint venture to launch senior-centric primary care clinics was far from easy or cheap, CEO Bruce Broussard said while speaking at a healthcare conference.
Discussing a range of topics, the chief of the Louisville, Kentucky-based insurance giant was asked about the company's recent $600 million deal with New York-based private equity firm Welsh, Carson, Anderson & Stowe. The clinics will be payer agnostic and operated by Humana’s primary care subsidiary, Partners in Primary Care.
"For the private equity individuals in the audience, it was an expensive, complicated deal," Broussard said at the 26th Annual Wharton Health Care Business Conference.
He was addressing a question about the acquisition as well as Humana's deal to acquire home health care provider Kindred at Home in 2018. It's part of Humana's shift from being an insurance company to a healthcare company.
Humana also operates a mail-order pharmacy, has more than 300 owned or alliance primary care clinics and is building out its capabilities to address members' social determinants of health.
Broussard said the company is focused on improving outcomes through primary care and ease of access into the home. While Humana is strong at executing and making improvements, he said, it doesn't want to "suffocate the innovation." So these groups were set up as separate entities with separate governance.
"Our view on both of those transactions were, we need to get these to scale and it's not going to get to scale unless we take it and run it separately and let it develop," Broussard said. "Obviously, we have a lot of influence on both those transactions, whether it's ultimately owning it through puts and calls and, in addition, the board of directors and the operations and so on. We’re still being able to enable it. But we’re enabling it around a much more oriented focus kind of area."
He also said it was crucial that the deals are payer agnostic and "that it’s not a slave of internal Humana."
That's important, so it has the ability to grow on its own without the bias of ‘Hey, you’ve to go solve this problem for this executive in the company.’" Broussard said. "There’s a structural reason, there’s some financial reasons and some risk management reasons for that. There’s also this ability for ‘How do we structure it to really have the innovation it is able to espouse in an independent organization?'”
Bold goal update
In 2015, Humana launched what it called its Bold Goal project to reduce unhealthy days among its members by 20% by 2020.
As of last spring, the company reported it collectively cut down unhealthy days by 2.7% with some communities such as San Antonio reporting a nearly 10% decrease. By comparison, Humana’s MA population outside of the program saw a 0.6% increase in unhealthy days.
While he didn't give an update on specific numbers, he said the company continued to make progress.
"In communities we serve, we set goals based on the healthy days that were there and improving the health. In a number of our communities, we actually exceeded those goals," Broussard said.
He also said the program will expand. "People always ask: Well, now that it's 2020, what are you doing?" Broussard said. "What you're going to see the organization do is now take the goal and build subgoals underneath that that are more around how do we make it easier and how do we improve outcomes? That is something you'll probably see in the latter part of this year."