In a multibillion-dollar deal, Humana Inc. has announced it plans to purchase the rest of a major home health and hospice business based out of Louisville.
Humana, which was also founded in Louisville and operates out of its downtown headquarters, will spend approximately $5.7 billion through on-hand cash and debt financing to buy the rest of Kindred at Home, which is valued at just over $8 billion. The deal is expected to close by the third quarter of 2021, Humana said Tuesday in a release.
The acquisition, Humana President and CEO Bruce Broussard said, will help the companies to more closely align incentives to focus on improving patient outcomes and on reducing the total cost of care.
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Humana will pay $5.7 billion to buy the remaining shares of Kindred at Home, bringing its total investment in the nation s largest home care and hospice provider to $8.1 billion.
While the proposed acquisition covers the totality of Kindred s business, Humana eventually plans to integrate just the home health side into its Home Solutions business line, with the aim that it will eventually provide care to those insured outside Humana, and be rebranded to CenterWell Home Health, taking on the name of Humana s recently-launched healthcare services company.
The rest of Kindred s hospice and community care services could eventually join to create a separate public company that Humana would have a minority stake in, and which would be led by current Kindred CEO David Causby.
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Health-insurer and hospital CEOs scored big paydays in 2020, a year defined by the pandemic.
Six out of eight CEOs made more last year than in 2019 on stock options and awards.
The paydays came as big insurers and some health systems grew profits despite COVID-19 challenges.
The CEOs of some of the biggest healthcare companies brought home tens of millions more in pay in 2020, despite the toll the COVID-19 pandemic took on the US economy at large.
Sam Hazen, the top executive at HCA Healthcare, the largest investor-owned hospital chain in the country, pocketed $83.6 million last year more than four times what he made in 2019 according to an Insider analysis of the company s financial documents.
Modern Healthcare Illustration / Getty Images
Medicare Advantage insurers are increasingly worried about how their ability to capture members risk scores will impact their profits in the coming years.
With capitation bids for 2022 due in just a few months, analysts expect insurers to make up for the corresponding loss in profits by increasing their premiums, slicing into their benefits or, simply swallowing the loss.
During the fourth quarter of 2020, Humana reported a 15% decline in Medicare members physician visits. The Louisville, Ky.-based insurer expects the drop to translate into trouble billing CMS for these patients conditions in 2021. Anthem likewise expects failure to collect enrollees risk scores in 2020 to cut up to $0.70 from its earnings per share this year. Molina Healthcare CEO Joe Zubretsky projected that the Long Beach, Calif.-based insurer s lack of member risk scores last year could slash up to $1 from its earnings per share price in 2021.