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Humana (HUM) to Provide Value-Based Care in Central Kansas

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Humana Inc. (HUM - Free Report) recently extended the value-based agreement with Kansas-based physician specialty group Hutchinson Clinic for benefiting Humana Medicare Advantage (“MA”) members. Consequently, in 2022, the MA members will continue to enjoy in-network access to well-recognized care teams of Hutchinson Clinic situated across more than 14 locations.

Shares of Humana gained 1.1% on Nov 23.

With the latest move, Humana tends to deliver value-based care, thereby leading to enhanced health outcomes across Hutchinson, Cheney, McPherson and neighboring areas. The recent initiative is also expected to bolster HUM’s presence across central Kansas. Hutchinson Clinic, offering extensive and coordinated care through a robust healthcare network for more than six decades, seems to be the apt partner for complementing Humana’s endeavor.

HUM continues to make sincere efforts to promote value-based care models, which reimburse physicians on the basis of the recovery of the patients they treat. This seems to be an upgraded model compared to the  fee-for-service model in the healthcare space, which reimburses physicians on the basis of the number of services provided.

Value-based care models have shown credibility in increasing preventive screenings, bringing down hospital admissions and reducing the cost of care. For bolstering value-based care, Humana has even rolled out an array of programs for providing financial rewards to primary care physicians, with the help of which they can pursue advancements in quality, outcomes as well as costs.

The COVID-19 pandemic further reinforced the dire need for value-based care for catering to the urgent needs of MA members amid stringent lockdowns, nationwide deferred care and other restrictions. Humana was able to perfectly capitalize on the scenario through its MA providers who clinched value-based contracts with the leading healthcare organization. Being part of such agreements enabled the providers to successfully utilize innovative technologies, capabilities, and services for delivering preventive, routine, and urgent care despite several hurdles witnessed in 2020.

Initiatives similar to the latest one tend to boost HUM’s value-based relationships. Since the starting of 2016, slightly more than 1 million individuals have been added to the Humana individual MA group and engaged in value-based care arrangements. As of Sep 30, 2021, around 68% of the individual MA members were in some form of value-based care agreement with HUM compared with 66% in the prior-year comparable period.

The MA business of Humana continues to witness growing membership and new collaborations or contract extensions with renowned healthcare systems. This has been bolstering HUM’s partner networks and strengthening its U.S. footprint. As of Sep 30, 2021, total medical members increased 3.5% from the prior-year comparable period. For 2021, Humana anticipates individual MA membership to witness an 11% year-over-year improvement.

Similar to HUM, other medical stocks such as Cigna Corporation (CI - Free Report) , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) also boast a robust MA business for catering to the healthcare needs of people.

Cigna’s MA business has performed well on the back of continuous product expansions, growing membership and new collaborations or contract extensions with renowned healthcare systems. As of Sep 30, 2021, medical customers of CI received a boost from well-performing Select, Individual, International Markets and MA businesses. Cigna remains on track to achieve MA customer growth in the targeted range of 10-15% this year.

Centene serves more than 1.1 million MA members across 33 states. Several contract wins and renewals have resulted in higher membership growth for the MA business. Managed care membership of CNC increased 5% year over year as of Sep 30, 2021. For 2022, Centene has plans to foray into 327 new counties and three new states of Massachusetts, Nebraska and Oklahoma through enhanced MA offerings.

UnitedHealth Group remains well poised to benefit from a strong MA business. The business has performed well courtesy of numerous business wins and a robust membership rise in individual MA business amid the annual enrollment period. As of Sep 30, 2021, UNH’s total medical members grew 5% from the prior-year comparable period. The 2021 Medicare enrollment season marked the largest MA footprint expansion of UnitedHealth Group in five years.

Shares of Humana have gained 9% over a year compared with the industry’s 28.2% rally.

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Humana presently has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Shares of Cigna, Centene, and UnitedHealth Group have gained 3%, 22.2%, and 34.2%, respectively, over a year.