Courtesy of Kindred Healthcare

Humana CEO Bruce Broussard said he expects ever more patients to get treated in their homes for ever more conditions, thanks to telehealth services, high-tech monitoring and traveling doctors.

That trend, he said, aligns with the company’s recently announced pilot program with Walgreens to establish senior-focused neighborhood clinics and the acquisition of a stake in the home health care provider Kindred.

Both of those steps reflect the company’s desire to keep its Medicare patients out of hospitals — which saves costs and allows people to stay at home longer — while at the same time enabling the insurer to tailor its response to patient needs.

Bruce Broussard

“We’re seeing there are different stages of aging, and those different stages are requiring different kind of interactions,” Broussard said in a second-quarter earnings call with investors Wednesday.

In early stages, the company can help patients more through telehealth and preventive services and by providing easier access points to those services outside of the traditional health care system, he said.

As patients age and they require more intense intervention at more frequent intervals, the company can take care of patients with a combination of remote monitoring, in-home care and specialty care services, whether provided at home or at hospitals.

The company is developing multiple capabilities to accommodate people’s needs now and as they get older and their conditions worsen, Broussard said.

Prevention, the CEO said, remains a key component to keep costs under control. With its recent acquisitions of a stake in both Kindred Healthcare and Curo Health Services, Humana is focusing on helping patients prevent chronic conditions such as diabetes and chronic obstructive pulmonary disease, or to slow their progression.

People with chronic conditions account for nearly 90 percent of health care expenditures in the U.S., according to insurance executives and government agencies. At its Investor Day last year, Humana leaders said that the company’s monthly costs for diabetes patients, for example, range from $613 for low-severity cases to $4,059 for high-severity patients. Keeping patients in a lower severity category can save the insurer tens of thousands of dollars per patient every year.

Patients increasingly will get treated for conditions at home that used to require a trip to a physician office, clinic or hospital, Broussard said Wednesday. High-tech tools can keep track of patient conditions, and patients can talk to their doctors via their computer. If needed, traveling nurses and physicians can visit patient homes. All of those capabilities will keep patients in their homes longer, and keep them out of more costly clinics and hospitals, the CEO said.

Second-quarter results

Humana said that second-quarter net income fell by 70 percent compared to a year earlier, primarily because the company recorded a pretax loss of $790 million related to the sale of its long-term care insurance subsidiary KMG America Corp.

Excluding the impact of the KMG loss and other items, net income fell 13.8 percent, Humana said.

Brian Kane

Earnings per share, excluding the KMG loss, were $3.96, ahead of expectations, CFO Brian Kane said during the earnings call.

Revenue, at $14.3 billion, rose 5.4 percent, in part because the insurer reported gaining nearly 250,000 Medicare Advantage customers in its individual and group segments in the last year — though it also lost 228,000 members for its stand-alone prescription drug plan. The company’s total medical membership, at nearly 16.6 million, was up 18.6 percent from a year ago.

Kane said Humana saw a notable decline in hospital admissions in the second quarter, in part because the company has focused on making sure that hospital visits are classified correctly. A patient who goes to a hospital for observation — rather than for treatment — costs the insurer thousands of dollars less.

In addition, Kane said, Humana also has been working hard to make sure that care is delivered in the most appropriate setting, which means that some patients, such as those who need a knee replacement, are receiving care in clinics, rather than hospitals, where care is generally more expensive.

Based on the second-quarter results, Kane said the company is raising its earnings forecast for the year to $14.15 per share, up from the previous range of $13.70 to $14.10.

Humana shares were up 2 percent late Wednesday afternoon, trading for $320.69. The S&P 500 was down slightly.

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Boris Ladwig
Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.