Humana

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Humana Inc.
Type Public
Traded as NYSEHUM
S&P 500 Component
Industry Managed health care
Founded Louisville, Kentucky (1961)
Headquarters Louisville, Kentucky, United States
Key people David A. Jones, Sr. and Wendell Cherry, co-founders
Bruce Broussard, CEO and President
Revenue Increase US$39.1 billion (2012)[1]
Net income Decrease US$1.2 billion (2012)[1]
Employees 43,400 (1Q 2013)[2]
Website www.Humana.com

Humana Inc. is a for-profit American managed health care company that markets and administers health insurance. With over 11.1 million customers[3] in the United States, the company is the largest (by revenues) Fortune 100 company headquartered in the Commonwealth of Kentucky,[4] and has a market cap of over US $13 billion, $36.5 billion in revenue, and over 40,000 employees worldwide.[1] Humana markets its health insurance services in all 50 U.S. states, D.C., and Puerto Rico, and has international business interests in Western Europe and Asia.

History[edit]

1961-1993: Nursing homes and hospitals[edit]

The company was founded by David A. Jones, Sr. and Wendell Cherry as a nursing home company in 1961. Then known as Extendicare, the company became the largest nursing home company in the United States.[citation needed] Extendicare later divested the nursing home chain and moved into purchasing hospitals in 1972, becoming the world's largest hospital company in the 1980s.[citation needed]

The corporate name was changed to Humana Inc. in 1974. Humana experienced tremendous growth in the years that followed, both organically and through the takeover of American Medicorp Inc. in 1978, which doubled the company's size.[citation needed] During the mid-1970s, the company used a fast-track construction process to complete and open one hospital a month.[citation needed] This accelerated construction schedule, which compressed time by overlapping processes, allowed Humana to develop hospital projects faster than the industry norm.[citation needed] During this construction boom, Humana developed the double corridor model for hospital construction. This highly efficient design minimized the distance between patients and nurses by placing nursing support services in the interior of the building with patient rooms surrounding the perimeter.[citation needed]

Humana brought the pioneering artificial heart research of Dr. Robert Jarvik and Dr. William DeVries, the inventor and surgeon of the first artificial heart implant performed at the University of Utah in 1982, to create the Humana Heart Institute, in Louisville in 1985.[citation needed]

The 1990s marked Humana's transition into a consumer health benefits company. Humana spun off its hospital operations from the health insurance operations in 1993, creating Galen Health Care, which then merged with Columbia/HCA.

1984-present: Health insurance[edit]

As the American health care system evolved in the 1980s, Humana developed and began marketing health insurance products.

United Healthcare attempted to acquire Humana in 1998. United's effort failed when it reported an almost billion-dollar quarterly loss.[citation needed]

In 2001, Humana partnered with Navigy, Inc., a subsidiary of Blue Cross and Blue Shield of Florida, Inc., to launch Availity.[citation needed]

In 2005, Humana entered into a business partnership with Virgin Group, offering financial incentives to members for healthy behavior, such as regular exercise.[citation needed]

The Business Health Care Group of Southeast Wisconsin (BHCGSW) chose Humana as its administrative partner to help reduce health care costs. Today, the BHCGSW represents more than 200 member companies, including large and small employers representing more than 150,000 health care consumers in Southeastern Wisconsin.[5]

On November 9, 2006, Humana Inc. announced that, effective Jan. 1, 2007, all Humana Medicare Advantage plan and Medicare Supplement plan members would receive the Posit Science Brain Fitness Program at no additional cost ($495 suggested retail price) as a complement to their health coverage. [6] On November 16, 2006, The Centers for Disease Control and Prevention (CDC) and Humana Inc. entered into a partnership with the aim of expanding on traditional private- sector approaches to population health management. [7]


In 2006, Humana launched an education campaign to market Medicare Advantage (MA) and Prescription Drug Plans (PDP) nationwide to Medicare eligible consumers, following the passage of the Medicare modernization act. On December 7, 2006, Humana Inc. announced that its Medicare Part D prescription drug plans (PDP) in the Florida region was ranked highest in overall member satisfaction by J.D. Power and Associates.[8] On December 12, 2006, Humana Inc. announced that it would introduce a Waive Generic Copayment program in 2007 to its fully insured Commercial members on tiered copay prescription drug plans. [9] On December 18, 2006, Humana Inc. announced three-time LPGA champion Nancy Scranton signed an agreement to become a spokesperson for the company, broadening Humana's presence in the individual health insurance market and creating recognition for Humana across the Ladies Professional Golf Association audience.[10]


Humana also launched RightSource, a national mail-order retail pharmacy business in 2006.[citation needed]

Humana screened the 1942 classic Casablanca in select movie theaters nationwide as part of a campaign to preview its Medicare Advantage consumer services in 2007, marking the first time in more than 60 years that the film was seen nationally in movie theaters.[11]

In its March 2008 issue, Fortune Magazine named Humana one of the Top 5 Most Admired Healthcare Companies in the United States.[12]

In May 2011, Humana announced that they would be using mobileStorm to allow transmission of protected health information to patients.[13] The service is the first HIPAA-compliant messaging platform.[14]

Acquisitions[edit]

This list represents some of the major acquisitions completed by Humana since 1990 in the U.S.:

Year Acquired company Location
1990 Michael Reese Health Plan Illinois
1994 Group Health Association Washington, DC[15]
1995 The Dental Concern Illinois
1995 Carrington Illinois
1996 Employers Health Insurance (EHI) Wisconsin
1997 Physicians Corp of America (PCA) Texas
1997 ChoiceCare Ohio
2000 Memorial Sisters of Charity Texas
2003 Oschner Health Plan Louisiana
2005 CarePlus Health Florida
2005 Corphealth Behavioral Healthcare Texas
2006 CHA Health Kentucky
2007 CompBenefits Georgia
2007 KMG Minnesota
2008 OSF Healthplans Illinois
2008 MetCare Florida
2008 Cariten Tennessee
2010 Concentra Texas
2011 MD Care California
2011 Anvita California
2012 Arcadian California
2012 SeniorBridge (pending) New York

Corporate affairs[edit]

Locations[edit]

Humana headquarters at the Humana Building in Louisville, Kentucky

The Humana Building in Louisville, Kentucky is a well-known example of postmodern architecture designed by Michael Graves and completed in 1985. Humana sponsored an architectural competition to determine the design of its headquarters building. Scale models of the participants (including the submissions of Helmut Jahn, I. M. Pei, Michael Graves and others) are contained in a vestibule located directly above the Main Street entrance.

Humana also operates a state-of-the-art mail-order facility, RightSourceRx. RightSourceRx operates in Phoenix, Arizona and West Chester, Ohio. The Humana call center is located in Cincinnati, Ohio and other areas.

Sponsorship[edit]

Humana is the official health benefits provider of the PGA Tour and Champions Tour. PGA Tour player David Toms and LPGA player Nancy Scranton are both ambassadors for Humana.[citation needed]

The Humana Distaff Handicap is a Grade 1 race for thoroughbred fillies and mares, four-years-old and up. The race is run each spring on Kentucky Derby day at Churchill Downs and set at a distance of 7 furlongs for a purse of $250,000.[citation needed]

Humana is also one of the Official Sponsors of Dollywood[citation needed] and is the presenting sponsor of the Grand Ole Opry.[16]

Since 1979 Humana has been a principal sponsor of the annual Humana Festival of New American Plays in Louisville, Kentucky.[17]

Humana Military Healthcare Services[edit]

Humana Military Healthcare Services (HMHS) is a wholly owned subsidiary of Humana. Since 2004, HMHS has acted as the Managed Care Support Contractor for the United States Department of Defense Military Health System TRICARE South Region. In 2009, HMHS' Managed Care Support Contract was awarded to United Military and Veterans Services, a subsidiary of UnitedHealth Group. HMHS protested that decision. The protest was upheld in late 2009 by the Government Accountability Office.

Controversy[edit]

In 1987, Humana sued NBC over a story line in the television medical drama St. Elsewhere whereas the hospital was to be sold to a for-profit medical corporation and renamed "Ecumena", with subsequent changes to the hospital, both positive and negative, emanating from that change. Humana was successful at forcing NBC into showing a disclaimer at the beginning of the September 30 episode saying that the drama had no connection whatsoever with Humana.[18]

On May 30, 1996, Linda Peeno, who was contracted to work for Humana for nine months, testified before Congress as to the downside of managed care.[19]

I wish to begin by making a public confession: In the spring of 1987, as a physician, I caused the death of a man.

Although this was known to many people, I have not been taken before any court of law or called to account for this in any professional or public forum. In fact, just the opposite occurred: I was "rewarded" for this. It bought me an improved reputation in my job, and contributed to my advancement afterwards. Not only did I demonstrate I could indeed do what was expected of me, I exemplified the "good" company doctor: I saved a half million dollars.

I contend that "managed care," as we currently know it, is inherently unethical in its organization and operation. Furthermore, I maintain that we have an industry which can exist only through flagrant ethical violations against individuals and the public.

Video of Linda Peeno's testimony appeared in Michael Moore's 2007 documentary Sicko. On June 28, 2007, in a statement about the movie, Humana declared that Peeno was never a Humana "associate" (permanent, full-time employee), but rather a "part-time contractor". Humana also disputed the portions of Congressional testimony that were shown by saying that because the patient's specific healthcare plan didn't cover heart transplants, the denial of coverage was valid.[20]

Humana was also featured in Season One of Moore's The Awful Truth, shown refusing to give a pancreatic failure sufferer authorization for a transplant due to a contradictory policy that stated that all of this man's diabetes related expenses were covered by his plan (his pancreas was failing due to his diabetes) but in another section, it said that it wouldn't cover organ transplants. Moore conducted a fake funeral on the front steps of Humana for the man who was sure to die without the transplant. Three days later, Humana changed their policy and authorized the man's treatment. This scene was the inspiration for Sicko.

On September 21, 2009 the U.S. Department of Health and Human Services opened an investigation into mass mailings sent by Humana to elderly Medicare recipients.[21] The mail was made to appear to contain official information about Medicare Advantage and prescription drug benefit information, but instead alleged that core Medicare benefits could be cut by the Obama administration's healthcare reform,[22] a claim refuted by John Rother, AARP's executive vice president.[23] Douglas Elmendorf, the head of the Congressional Budget Office, later supported the claim that Medicare benefits would be cut.[24] However, his comments were in reference to just one of several bills being drafted in Congress, and CBO estimates of another healthcare reform bill found that changes to premiums would vary.[25] The Centers for Medicare and Medicaid Services instructed Humana to cease all such mailings to Medicare plan members pending an investigation. HHS Secretary Kathleen Sebelius, in a letter to the insurance industry, threatened that bad actors may be excluded from new health insurance markets that will open in 2014. However, in a letter to Kathleen Sebelius, Senate Republicans pointed out that a 1997 directive from the Centers for Medicare and Medicaid Services explicitly allowed HMOs to tell members about legislation and urge them to express opinions.

Humana's Prescription Home Delivery[edit]

In 2006, Humana started a Prescription Home Delivery Pharmacy called RightSourceRx.[26] Members are now able to get a discount on 90 day prescriptions through RightSource, depending on what their plan allows. RightSource just filled their 500,000th prescription in December 2008.

See also[edit]

References[edit]

  1. ^ a b c "Financial Statements for Humana Inc". Google.com. Retrieved 2012-05-06. 
  2. ^ "Humana Inc. Profile". Google.com. Retrieved 2012-05-06. 
  3. ^ "2011 Humana Annual Report". Humana Inc. Retrieved 2012-05-06. 
  4. ^ "Fortune 100 2008: States - Kentucky". Money.cnn.com. 2008-05-05. Retrieved 2009-08-05. [dead link]
  5. ^ "Humana Press Release" (Press release). Humana.com. Retrieved 2009-08-05. 
  6. ^ "Humana Medicare Advantage Members to Receive Brain Fitness Program at No Extra Charge; Posit Science program helps seniors achieve increased mental agility". 
  7. ^ "CDC and Humana Partner to Create Next Generation of Public Health; Alliance to Leverage Private-Sector Resources to Address Chronic Diseases". 
  8. ^ "Humana Receives Highest Ranking by J.D. Power and Associates". 
  9. ^ "Humana introduces 2007 generics program to help members reduce out-of-pocket medication costs". 
  10. ^ "LPGA's Nancy Scranton Becomes Humana Ambassador; Veteran Golfer Will Offer Golfing and Lifestyle Tips Targeted to Humana's Female Audience". 
  11. ^ "Humana Press Release" (Press release). Humana.com. Archived from the original on 2006-11-09. Retrieved 2009-08-05. 
  12. ^ "America's Most Admired Companies 2008: Industry: Health Care: Insurance, Managed Care | FORTUNE". Money.cnn.com. 2008-03-17. Retrieved 2009-08-05. 
  13. ^ mobileStorm Launches First HIPAA-Compliant, Cloud-based mHealth Communication Platform; Announces Humana as a Beta Client. Smart Phone Health Care. May 27, 2011.
  14. ^ HIPAA-Compliant mHealth Platform with Humana as Beta. Blue Tooth Marketing. May 27, 2011.
  15. ^ Contemporary News Article from PRNewsWire retried 07 January, 2011
  16. ^ Grand Ole Opry sponsors
  17. ^ The Humana Foundation: Contributions to Civic and Culture - Actors Theatre of Louisville's Humana Festival of New American Plays
  18. ^ "Humana lawsuit over `St. Elsewhere' prompts TV disclaimer by NBC". Chicago Sun-Times. 1987-10-01. Retrieved 2009-08-05. 
  19. ^ "Testimony of Linda Peeno, MD about Managed Care in the Healthcare Industry - May 30, 1996". Web.archive.org. Archived from the original on 2008-06-01. Retrieved 2010-10-22. 
  20. ^ "Humana issues statement on Moore's 'Sicko'". Business First. 2007-06-28. Retrieved 2007-07-07. 
  21. ^ Medicare Probes Humana's Letter To Patients About Effects Of Health Reform Medical News Today 23 Sep 2009
  22. ^ Humana Mailer Targets Elderly, Claims Medicare Benefits To Be Cut Huffington Post. 2009-09-16.
  23. ^ King, Neil (2009-08-25). "GOP Tees Up Medicare Manifesto". Online.wsj.com. Retrieved 2010-10-22. 
  24. ^ Budget chief says Medicare benefits could be cut ERICA WERNER, Associated Press. September 22, 2009
  25. ^ The Effect of H.R. 3200 on Medicare Part D Premiums Congressional Budget Office, Director's Blog. August 28, 2009
  26. ^ RightSourceRx.com

External links[edit]