As it continues its $1 billion value-creation initiative, Humana is streamlining its leadership structure to simplify its operations.
The insurer will now function with two main arms: insurance services and CenterWell. Its retail health plan and related segments will live in the former, while CenterWell will serve as the main brand for its growing healthcare services business.
CEO Bruce Broussard said on the company's earnings call Wednesday that the restructuring will "accelerate work that is underway" to integrate and centralize its operations.
"We believe this simpler structure will create greater collaboration across our insurance and CenterWell businesses," Broussard said.
As part of the restructuring, Humana will launch a nationwide search for an executive to lead its insurance services arm, Broussard said. The company expects to name a new president for the segment by the end of this year.
The new structure will also allow some of the company's rising stars to take on expanded roles, he said.
Alan Wheatley, a 31-year veteran of the company, will depart at the end of 2022 as well, Broussard said. Wheatley, Humana's retail segment president, will stay on in an advisory role until early 2023 to ensure a smooth transition to the new insurance services leadership.
"We are confident that the momentum that Alan and team have created throughout 2022 in the Medicare business will drive a successful 2023 [annual enrollment period]," Broussard said.
Humana raked in $696 million in profit for the second quarter of 2022, up nearly 20% year over year.
In the second quarter of 2021, the insurer reported $588 million in profit for an increase of 18.4%, according to its earnings report released Wednesday. Humana also brought in $23.7 billion in revenue for the quarter, an increase of 14.6% from the $20.6 billion reported in the second quarter of 2021.
The results surpassed Wall Street analysts' expectations on both profit and revenue, according to Zacks Investment Research.
Profit and revenue are also up by double digits through the first half of the year, according to the report. The company posted $1.6 billion in profit through the first six months of 2022, an increase of 14.8% compared to the $1.4 billion earned in the first half of 2021.
Revenues reached $47.6 billion in the first half of 2022, up 15.3% from $41.3 billion in the first half of 2021.
“We are pleased with our significant progress in growing the business, including our primary care clinics and our organic expansion of Medicaid membership, combined with the initial rollout of our value-based home care,” said Bruce Broussard, Humana CEO, in a statement.
Broussard said the earnings growth as well as efforts under its $1 billion value creation initiative have allowed Humana to make significant investments for the 2023 Medicare Advantage plan year, which "demonstrate our commitment to balancing our long-term membership and earnings growth targets.”
Due to the performance, which was driven in part by medical cost trends that were better than expected, Humana is boosting its guidance to $24.75 in earnings per share for the year.