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Humana’s integrated care delivery strategy

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Integrated care delivery

There are 26 million more people in the US that are projected to get health insurance by 2020. In an attempt to capture market share, certain players in the private health insurance industry (XLV) are providing a range of services that span the entire continuum of healthcare—from hospitals, nursing homes, and health insurance, to home care services.

Humana (HUM) core strategy is an integrated care delivery model, with the required ancillary services provided mainly by Humana’s Healthcare Services segment.

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The above graph shows the profits of the Healthcare Services segment, a proxy for Humana’s savings given its investment in an integrated care delivery model. The company saves on paying these dollars to third parties to provide critical services to its members. Humana’s integrated delivery model is mainly focused on five areas of influence:

  1. primary care
  2. preventive health
  3. pharmacy solutions
  4. home health solutions
  5. informatics

Reducing costs

Humana employs 19,600 dedicated primary care doctors and nurses. It has contracts with 10,600 primary care practitioners, or PCPs, and joint ventures with another 2,700.

Because the Affordable Care Act (or ACA) focuses on reducing health care spending, other major managed care organizations such as Aetna (AET), UnitedHealth Group  (UNH), and Anthem (ANTM) also focus on recruiting or partnering with PCPs. This allows the companies to reduce unnecessary usage of specialty services.

Humana has also enrolled 3.8 million people in HumanaVitality, a preventive health program that promotes healthy lifestyle options and helps to reduce the need for medical services.

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Supplementary services

Humana is the fifth-largest pharmacy benefit manager in the US. It has processed approximately 300 million prescriptions and dispensed 30 million prescriptions. Humana provides prescription mail order services for branded, generic, and specialty drugs.

Informatics

Humana uses data analytics for effective risk management. The company has identified 1.6 million high-risk members through technology solutions. The company has also covered 4.1 million gaps in care using its messaging service.

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