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Humana (HUM) Teams Up With DME Entities to Boost Home Solutions

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Humana Inc. (HUM - Free Report) announced that it partnered with two national organizations to offer Durable Medical Equipment (DME) services, which will enable Humana Medicare Advantage HMO members to access services seamlessly at home. The organizations will offer DME services starting from Jul 1.

Through the partnership with Humana, AdaptHealth Corp. (AHCO - Free Report) and Rotech Healthcare Inc. are expected to serve specific regions in the domestic market under a value-based structure. The move is expected to enhance the capabilities of Humana’s Home Solutions business. The terms of the deals are yet to be disclosed.

The deals are expected to enable the company to scale its comprehensive value-based homecare offerings. By 2025, this will cover 40% of Humana Medicare Advantage members. The partnerships with AdaptHealth and Rotech Healthcare are expected to create a unified approach to sourcing durable medical equipment. This will not only help HMO members but also physicians and caregivers in their pursuit to provide quality and value-based care.

With the help of this unified approach, healthcare providers can speed up the ordering process and obtain medical equipment in a simplified manner. Partnerships like these are expected to equip HUM with the means to deploy advanced clinical programs that can reduce hospitalizations for the members. The partnerships with AdaptHealth and Rotech Healthcare will only be in effect for Humana Medicare Advantage HMO plans.

Humana’s Home Solutions operations are part of the CenterWell segment. In the first quarter of 2023, the company generated $314 million from Home Solutions in service revenues, which tumbled 56.7% year over year. However, its expansionary measures for the value-based care home model enabled the company to register 188.1% growth in Home Solutions intersegment revenues. The latest deals are expected to further boost these numbers in the coming days.

Price Performance

Humana’s shares have gained 23.3% in the past year compared with the 4.3% rise of the industry it belongs to.

 

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Zacks Rank & Key Picks

Humana currently has a Zacks Rank #3 (Hold). Investors interested in the broader medical space may look at better-ranked players like Life Time Group Holdings, Inc. (LTH - Free Report) and Establishment Labs Holdings Inc. (ESTA - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Life Time Group’s 2023 earnings is pegged at 41 cents per share, indicating a massive improvement from the year-ago loss of 18 cents. The consensus estimate for LTH’s revenues in 2023 suggests a 22.8% year-over-year rise.

The consensus mark for Establishment Labs’ 2023 earnings has improved 6.2% in the past 30 days. The consensus estimate for ESTA’s revenues in 2023 suggests 27.6% year-over-year growth.

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