About HumanaOne
Quote and Compare Humana One Health Planes Here for the Best Price on Humana One Health Insurance Plans. (HumanaOne) Humana has about 6.25 million people enrolled in its health plans, which are available in 16 states and Puerto Rico. Humana is one of the largest publicly traded managed healthcare companies in the United States, Humana Inc. Nearly 47.3 percent of these customers are in Florida, Illinois, and Texas. Humana offers health maintenance organization (HMO) and preferred provider organization (PPO) plans. Humana also offers Medicare- and Medicaid-related health insurance products; Humana provides managed healthcare services under a contract with the U.S. Department of Defense. Humana offers such specialty and administrative services as Humana dental plans, Humana group, Humana life insurance, and Humana worker's compensation.
Humana in the 1960s began with Nursing Homes
Two lawyers in Louisville, Kentucky in 1961 built a nursing home, each pledging $1,000 apiece together with four friends. Wendell Cherry and David Jones--cofounders of that first home, Heritage House was soon approached with other offers to buy and build nursing homes. Humana expansion was rapid in the first seven years, and the two men added facilities in Kentucky, Virginia, and Connecticut. With the establishment of Medicare and Medicaid in the mid-1960s, Humana grew quickly. Humana’s Jones and Cherry reincorporated their venture in 1961 and sold stock for seven years to finance further growth. Extendicare Inc., as the group was known, grew to more than 50 facilities, becoming the nation's largest nursing home company.
As Medicare spawned a nursing home glut and stocks suffered, Extendicare or Humana experimented with alternatives. There was a brief and unfortunate diversification into mobile home parks between 1969 and 1971, which the company quickly unloaded. Extendicare or Humana acquired its first hospital in late 1968, realizing it could apply the same business practices it had developed for operating nursing homes. Within two years, the company had acquired nine more hospitals. The hospitals proved so successful that Extendicare or Humana divested all of its nursing homes in 1972.
In 1970 Humana Inc, began to Focus on Hospitals
In January 1974 the company's name was changed to Humana Inc and changed its focus entirely on hospitals. The features that distinguished Humana from other hospital chains early on were state of the art new management decisions. Humana negotiated well in buying hospitals, Humana did not want to manage hospitals it did not own, and Humana implemented new cost-control measures through the company's management to boost Humana to great success. Unlike most of Humana’s competitors Humana concentrated on strict productivity and profitability goals.
Doubled Size Through 1978 Acquisition of American Mediocre
In 1978, Humana acquired the number two chain, American Medicorp, Inc. As the nation's third largest hospital-management chain, this purchase doubled Humana's size.
Cofounders Jones and Cherry, chairman and president, respectively, remained confident because 45 percent of hospital revenues were coming from government-guaranteed Medicare and Medicaid. The two men also saw the hospital business as recession resistant. This smart business management pushed Humana forward as a powerhouse in American business.
In 1982 Humana strategically established a Centers for Excellence program for the purpose of offering Humana members specialty care. This included Humana Network providers and centers for neuroscience, diabetes, spinal injuries, and artificial-heart research and surgery.
In 1982 Humana owned approximately 90 hospitals. Humana also leased and operated the University of Louisville's teaching hospital, where citizens without the ability to afford hospital care received inpatient treatment for no charge. Humana was supported in this effort with subsidies from the government.
Humana Began to Offer Health Plans in 1984
In 1984 Humana launched Humana Health Care Plans. Humana Health Care was designed to offer insurance plans with attractively low premiums and punitive deductibles for patients who used Humana’s counterpart hospitals. Humana soon imitated this vertical integration. Humana banked on a 70 percent referral rate from its managed healthcare business ensuring a high occupancy rate for Humana hospitals.
By 1989 Humana's health-plan division made $4 million, its first operating profit.
In October 1990 Humana announced that it had agreed to acquire Chicago-based. and Michael Reese Hospital and Medical Center. Michael Reese Health Plan Inc one of the largest private academic medical centers in the United States with 240,000 members. At that time Humana had 1.2 million members across Humana lines of business.
Spun Off Its Hospitals in 1993
In early 1990s Humana's healthcare HMOs and PPOs had grown into a $2 billion dollar Humana business with 1.7 million Humana plan participants. Humana decided in 1993 to stake its future on managed healthcare plans. In March of 1993 Human spun off the hospital division 76 Humana hospitals in all. Humana spun them into a new and separate company called Galen Health Care, Inc. Within six months of the spin-off, Galen merged with Columbia Hospital Corp. (later known as Columbia/HCA after a merger with Hospital Corp. of America). Humana emerged with $685 million in cash and long-term debt of only $21 million.
With a lot of cash in the bank in 1994 Humana spent $180 million to acquire Group Health Association, a 125,000-member HMO in Washington, D.C., and CareNetwork, an HMO in Milwaukee. Then Humana acquired EMPHESYS Financial Group, Inc. for $650 million. Green Bay, Wisconsin-based EMPHESYS was a leading provider of health insurance in the small group market, with 1.3 million members, and the tenth largest commercial group health insurer. At the end of 1995 Humana had boosted its overall plan membership to 3.8 million Humana members and Humana revenues of $4.7 billion.
In 1996 one could see that Humana had grown very quickly. Amid skyrocketing costs, Humana was forced to abandon 13 unprofitable markets. The largest of these was Washington, D.C., and the company sold Group Health Association to Kaiser Permanente in January 1997; in only two years of ownership, Humana had suffered losses of $100 million attempting to turn around the money-losing Group Health HMO.
Humana also sold 30,000-member health plan in Alabama. As part Humana’s restructuring, Humana recorded a $200 million pretax charge for the second quarter of 1996. This lead to net income for the year of 1996 only $12 million, compared to $190 million for the previous year. Jones, still serving as company chairman and CEO, forced out longtime president Wayne T. Smith and CFO W. Roger Drury. Gregory H. Wolf.
Humana began restructuring their image by improving relations with both doctors and patients. Humana targeted improvements in basic member customer service answering phone calls, mailing out Humana identification cards quickly, and expediting claims handling with automatic adjudication. Humana abandoned the use of gag clauses in HMO contracts with doctors, clauses that forbade doctors from discussing the financial arrangements or patient-care policies.
In September 1997 Humana two significant acquisitions Humana acquired Physician Corporation of America (PCA) for $290 million in cash and the assumption of $121 million in debt. PCA had a total of 1.1 million members in its HMOs. Humana also gained large plans in Florida, Texas and Puerto Rico. In October 1997 Humana bought ChoiceCare Corporation for about $250 million in cash. ChoiceCare added about 250,000 additional Humana members.
1997 Humana sold its last remaining hospital and its pharmacy benefits management subsidiary.
In August 1997 Humana announced it would sell its Humana HMO in California.. After enjoying an acquisitions increase Humana revenues to $8.04 billion.
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