The Louisville, Ky.-based Humana announced it has signed a definitive agreement to acquire the remaining 60 percent interest in Kindred at Home (KAH), the nation’s largest home health and hospice provider.
Humana is teaming up with private equity firms PG Capital (TPG) and Welsh, Carson, Anderson & Stowe (WCAS), for an enterprise value of $8.1 billion, which includes Humana’s existing equity value of $2.4 billion associated with its current 40 percent minority ownership interest.
KAH employs approximately 43,000 caregivers providing home health, hospice and community care services to over 550,000 patients annually. KAH has locations in 40 states, providing extensive geographic coverage with approximately 65 percent overlap with Humana’s individual Medicare Advantage membership.
According to the insurer’s officials, this deal “reflects Humana’s continued commitment to investing in home-based clinical solutions that drive improved patient outcomes, increased satisfaction for patients and providers and value for health plan partners.” They noted that over the last year, Humana, together with KAH management, took significant ground in continuing to prove out home-based care models’ impact on preventable events and assembling supporting clinical capabilities ranging from preventive to higher acuity, emergent, hospital-level care.
“Underpinning these clinical advancements was the development of a platform to share and analyze information between the health plan and home health agency, facilitating the delivery of proactive and individual care plans. This approach delivers personalized, and more comprehensive whole person care and supports care continuity by engaging in-home physician and urgent care resources when a patient does not have immediate access to a primary care physician or if symptoms need immediate escalation,” officials stated.
What’s more, they added, acceleration of the KAH acquisition provides Humana the opportunity to more quickly implement and scale the value-based models and clinical innovation that it has already designed, focusing on total cost of care and delivering outcomes and value beyond what’s possible in a traditional, fee-for-service model.
“We continue to invest in assets that allow Humana to better manage the holistic needs of our members and patients by expanding care in the home, including primary care, telehealth, and emergency room care, while also addressing social determinants of health,” said Bruce D. Broussard, Humana’s president and CEO.
He added, “Fully integrating Kindred at Home will enable us to more closely align incentives to focus on improving patient outcomes and on reducing the total cost of care. This is critical to deploying at scale a value-based, advanced home health model that makes it easier for patients and providers to benefit from our full continuum of home-based capabilities, leveraging the best channel to deliver the right care needed at the right time.”
As part of the transaction, KAH’s home health operations will be integrated into Humana’s Home Solutions business led by Susan Diamond, Segment President. KAH will adopt Humana’s new payer-agnostic healthcare services brand – CenterWell – transitioning to Center Well Home Health.
Notably, while KAH’s hospice and community care operations are included in the transaction, Humana said that because of its participation in the Centers for Medicare and Medicaid Services (CMS) hospice Value-Based Insurance Design (VBID) model, it intends to ultimately only maintain a minority interest in this portion of the asset.
The company is exploring, among other things, a public listing, conditions permitting, or another potential transaction, and intends for the future independent company to be led by David Causby, the current CEO of Kindred at Home, officials said. This acquisition, which is expected to close in the third quarter of 2021, is subject to customary state and federal regulatory approvals.
