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Recently, leading health-care company, Humana Inc. (HUM - Analyst Report) joined hands with the global pharmaceutical company, Eli Lilly and Company (LLY - Analyst Report) to form a research collaboration that will provide cost effective and improved healthcare outcomes.

Kentucky based Humana provides a wide range of insurance products, and health and wellness services. On the other hand, Eli Lilly utilizes modern research to address the world’s medical exigencies. The partnership will utilize these areas of expertise of both the companies to optimize the quality of patient care by researching on various diseases. Humana and Eli Lilly will conduct a number of studies. The initial phase of the studies will include investigation of patient characteristics associated with rising health care costs for type2 diabetic patients.

Recently, healthcare costs have increased tremendously. Since 1980, U.S. health expenditures have increased more than ten times and are expected to grow faster than national income in the foreseeable future, as per sources. However, the quality of healthcare has not shown as much improvement as compared to the escalating costs. Thus both the companies, each being esteemed players in their respective markets, decided to form an alliance to address this issue and come up with a solution.
As per sources, more than one sixth of the country’s expenditures are devoted to healthcare spending. But a huge part of it is spent every year over inefficient and wasteful health care. Many healthcare companies at present are struggling to provide improved patient care at affordable rates. But we believe the strategic alliance with Eli Lilly will position Humana to take an upper hand in this regard and cater to the growing healthcare industry successfully.

Humana currently carries a Zacks Rank #3 (Hold). Among other health service companies, Aetna Inc. (AET - Analyst Report) and Centene Corp. (CNC - Snapshot Report) carry a Zacks Rank #2 (Buy) and appear impressive.


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