Humana

Part
01
of five
Part
01

Health Insurance Company Trends

In reference to our findings, trends within the healthcare industry include using data and digital-driven healthcare services, consolidation and collaboration between health insurance companies, shift to a value-based model, and the use of blockchain technology. These trends are mainly driven by competition, new market entrants, customer expectation, and data protection and integrity.

TREND 1: USE OF DATA AND DIGITAL DRIVEN HEALTHCARE SERVICES

KEY DRIVERS

TREND 2: CONSOLIDATION AND COLLABORATION BETWEEN HEALTH INSURANCE COMPANIES

KEY DRIVERS

TREND 3: SHIFT TO A VALUE-BASED MODEL

KEY DRIVERS

TREND 4: USE OF BLOCKCHAIN TECHNOLOGY

KEY DRIVER
Part
02
of five
Part
02

Humana Competitive Landscape

Competitive details for Humana, UHC and Centene have been included in the attached spreadsheet and summarized below.

Humana

Overview

  • Humana is one of the industry leaders in health care innovation and community wellness.
  • The company ensures that the business decisions are made are in line with their commitment to provide health and well-being to its members, associates, and communities.
  • Their main objective is not only to offer health plans for the community, but to commit themselves to helping people in the community achieve optimum health by providing a variety of programs for members.

Competitive Advantage

  • Humana is not only an industry leader in providing health plans, but also has received many awards, including "Computerworld’s best places to work in IT", Forbes magazine’s “The Just 100: America’s Best Corporate Citizens”, "Talent Board’s North American Candidate Experience Award", J.D. Power’s "Mail-order Pharmacy Award", Flexjobs’ "100 remote companies to watch", HRO Today’s "Recruitment Team of the Year award" and many more.
  • The competitive advantage of Humana includes its relationship with partners. The partners of Humana help the company by offering and sponsoring different activities and programs for their members in the community.

Target Market

  • The target market of the company includes suppliers, contractors, vendors, consultant agents, and other good & service providers.

Products/Services

  • Humana offers a variety of plans in medicare, dental, vision, medicaid, pharmacy and group insurance.

Pricing

  • Humana's pricing depends on the customer's geographical area in United States. We used as en example, 10001 zip code. (source 5)
  • Humana Medicare Plans:
    • Health Maintenance Organization (HMO): copays are as low as $5. Annual costs could be between $2,200 and $6,700 depending on the plan, but monthly premiums may be as low as $0. There is no annual deductible.
    • Preferred Provider Organization (PPO): copays can be as low as $0. Annual costs may be between $3,400 and $6,700 per year depending on the plan. Monthly premiums can be as low as $0, and there is an annual deductible.
    • Pay-fee-for-service plan (PFFS): copays are as low as $10. Annual costs can be between $5,000 and $6,700. Monthly premiums may be as low as $0, and there is an annual deductible.
  • Prescription Drug Plans (PDP's):
    • Humana's Walmart Rx Plan charges monthly premiums of between $15 and $17, and copays as low as $1 for generic drugs. The annual deductible for Tiers 1 and 2 is $0 while Tiers 3 through 5 have an annual deductible of $400.
    • Humana's Preferred Rx Plan has an annual deductible for all tiers of drugs of $400.
    • Humana Enhanced offers comprehensive coverage with no deductible.
  • Humana Medigap Plan A, B, C, F, G, K, L and N: costs will depend on where the client lives and other factors. As an example, we use a 65-year-old woman living in Lexington County, South Carolina.
    • Medigap Plan A costs a little over $116 a month. For the plan with dental and vision benefits, that monthly premium jumps to around $125.
    • Medigap Plan B costs just over $126 a month.
    • Medigap Plan C costs $145.21 a month. A man would pay a slightly higher rate of $145.59 a month.
    • Medigap Plan F costs a little over $148 a month while the Healthy Living Plan F, which includes dental and vision coverage, costs about $153 a month.
    • Medigap Plan G costs about $25 less per month than Plan F, depending on the plan the client chooses.
    • Medigap Plan K costs about $69 a month. Humana also offers a Plan K with dental and vision, which would cost about $80 a month.
    • Medigap Plan L costs $97.10 a month.
    • Medigap Plan N costs about $97 a month. For a Plan N with dental and vision benefits, the monthly premium jumps to about $107.


UnitedHealthCare

Overview

  • UnitedHealthcare provides health care to millions of people, from early life until retirement.
  • One of the objectives of UnitedHealthcare is to help people live a healthier lifestyle and make a health system operate better for everyone.
  • The company is continuously working to provide a health system aligned and comfortable for all.

Competitive Advantage

  • The competitive advantage of UnitedHealthcare is that they use advanced data and technology to achieve breakthrough treatments and redefined consumer's choice.
  • The company created a "Member Bill of Rights and Responsibilities" for the members. It highlights the expected health care experience and an opportunity for the member to improve through the health care experience driven by UnitedHealthcare.

Target Market

  • The target market of the company community members and health care providers.

Products/Services

  • Products and services offered by UnitedHealthcare are Medicare plan, small business plan, individual & family plan, dental plan, short term health insurance, and Medicaid.

Pricing

  • Prices will vary depending on a few different factors, for example, where the customer lives, age and the type of plan.
  • Example of their pricing using the zip code 10001 was from $16 to $46 for their Medicare Advantage Plans, $80.00-$308.25 for their Medicare Supplement Insurance Plans, $28.10 to $77.70 for their Medicare Prescription Drug (Part D) Plans, and $35.40 to $36.30 for their Medicare Special Needs Plans.
  • An example of the pricing according to age is as follows: 35+ year old $200 - $340, 45+ year old $240 - $400 and 55+ year old $360 - $620.
  • Dental plans run from $15/month to $80/month for an individual. Adding more members will drive the cost up.

Centene

Overview

  • Centene Corporation is a Fortune 500 healthcare company that provides a portfolio of services to government-sponsored healthcare programs.
  • Centene Corporation operates as a multi-line healthcare company in the United States.
  • Centene provides access to high quality health care, innovative programs and a wide range of health care solutions. (source 15)
  • Centene has made a commitment to transform the health of people they serve, starting from children to seniors and people with disabilities.

Competitive Advantage

  • The competitive advantage of the company is their partners, who help the company serve the community, invest in community health care, provide environmental sustainability, conduct research, produce innovations and improve products and services outcomes.
  • Centene makes people/members the central element of their healthcare programs.
  • Centene is the largest provider of managed Long-Term Services and Supports, and the fastest-growing segments in the managed care market.
  • Through TRICARE and Veterans Choice programs, Centene is one of the nation’s largest providers of managed care services for military families and veterans. (source 22)
  • Centene has more than 30 years of experience applying our local approach to government-sponsored healthcare programs. (source 22)
  • Centene invests in key technologies.

Target Market

Products/Services

  • Centene operates through two segments: Medicaid Managed Care and Specialty Services.
  • The Medicaid Managed Care segment provides Medicaid and Medicaid-related health plan coverage to individuals through government subsidized programs, including Medicaid, the State Children's Health Insurance Program, foster care, and Medicare special needs plans, as well as aged, blind, or disabled programs.
  • Services under Medicaid include the State Children’s Health Insurance Program (CHIP), as well as Aged, Blind or Disabled (ABD), Foster Care and Long Term Care (LTC), in addition to other state-sponsored/hybrid programs and Medicare (Special Needs Plans).
  • The Specialty Services segment includes Health Insurance Marketplace, Federal Services and Correctional Health, specialty pharmacy, vision plan, pharmacy benefit management, nurse advice line & after-hours support, and dental plan.
  • Centene contracts with other healthcare and commercial organizations to provide specialty services such as behavioral health management, care management software, correctional healthcare services, dental benefits management, in-home health services, life and health management, managed vision, pharmacy benefits management, specialty pharmacy and telehealth services.

Pricing

  • Centene operates a website that provides information on its services, plans, and activities. However, Centene doesn't operate an online sales channel or customer portal, where we can see their prices.
  • Centene serves its customers by coordinating referrals to related health and social services agencies.

Research Strategy:

In order to provide the requested information, we started with a general search on each company's website, where we found general information to provide an overview of each company. We then deepened our research into each topic, searching in business websites and healthcare portals where we found all the information needed. We compiled information on their competitive advantages from their websites, reports, and healthcare portals. We continued our research by looking for the target market of each company on each of their websites, complementing that information with healthcare portal sources. We did the same kind of research for the product and services information and their pricing. It's worth to mention that for Centene, we found that prices are given by the many providers that they manage and they don't have a customers portal or an online sales channel where they publish those prices.
Part
03
of five
Part
03

Humana: Financial Overview

Humana's revenue has witnessed a growth of 4.89% from 2016 to 2018.

2016

  • Revenue: $54,379,000,000
  • Growth/Decline of Revenue: The annual revenue for 2016 witnessed a 0.17% growth from the previous year and declined 1.13% the following year 2017.
  • Profit/Loss: In 2016, Humana earned a gross profit of $9,372,000,000 which was a 6.47% decline from the previous year. Humana's net income for 2016 was $614,000,000 which was a 51.88% decline from previous year.

Others

  • Consolidated services revenue rose to $13,000,000 which was 1.3% increase from 2016 to 2017 because of the increase in Healthcare Services sales.
  • Services revenue experienced a growth of $28,000,000 which was 9.0% increase from 2016 to $338,000,000 in 2017 due to the increase in service revenue from the pharmacy solutions business.
  • Intersegment revenues were reduced by $1,400,000,000 or 5.6% from 2016 to reach $23,600,000,000 in 2017 due to care management programs and lower revenue in the provider services business, resulting in the decrease in the company's provider asset primary locations.

2017

  • Revenue: $53,767,000,000
  • Growth/Decline of Revenue: The annual revenue for 2017 witnessed a 1.13% decline from the previous year and a growth of 5.85% the following year 2018.
  • Profit/Loss: In 2017, a gross profit of $10,271,000,000 was realized at a 9.59% growth from 2016. And, Humana's net income for 2017 increased by 298.7% to reach $2,448,000,000.

OTHERS

  • The total services revenue increased by $269,000,000 in 2017 which was a 79.6% increase to reach $607,000,000 in 2018. This increase was a reflection of the growth in service revenue from the provider and pharmacy solutions.
  • The intersegment revenues declined by $415,000,000 or 1.8% from 2017 to reach $23,200,000,000 in 2018. This, in turn, was due to a reduction in pharmacy solutions revenue because of lesser stand-alone PDP members and the loss of the intersegment revenues due to the company's exit from the individual commercial business amongst others.

2018

  • Revenue: $56,912,000,000
  • Growth/Decline of Revenue: The annual revenue for 2018 witnessed a 5.85% growth from 2017.
  • Profit/Loss: In 2018, Humana earned a gross profit of $11,030,000,000 which was a 7.39% growth from 2017. And, the net income for 2018 was $1,683,000,000 which was a 31.25% decline from previous year.

2019

  • Revenue: The end of the quarter on March 31, 2019, was $16,107,000,000. The end of twelve months on March 31, 2019, was $58,740,000,000
  • Growth/Decline: Revenue growth for the end of the quarter was 5.85% annually. And, revenue growth for the end of the twelve months on March 31 was 12.8% annually.
  • Profit/Loss: The end of quarter gross profit by March 31, 2019, was $2,614,000,000, showing a 0.19% increase.

Conclusion

From 2016 to 2018, the company's revenue has witnessed a growth of 4.89% (0.17% -1.13% + 5.85%).
Part
04
of five
Part
04

Humana: Advertising Strategy

In terms of advertising, our research suggests Humana is currently promoting the alignment of the Humana brand with value-based healthcare, community partnerships, and better living, particularly for older adults and seniors with chronic conditions.

HUMANA'S ADVERTISING STRATEGY

  • Humana's advertising channels include television, Internet, radio, telemarketing, and direct mailings.
  • Humana employed about 1,400 telemarketing representatives and 1,500 salespeople at the end of 2018.
  • According to a recent analysis, Humana Medicare Advantage's direct mail and printed marketing materials are stressing the cost advantage of their state-specific plans. (Source 2)
  • In 2018, Humana released a progress report on its Bold Goal initiative, which is a health and business strategy that focuses on progressing the health and wellbeing of its communities by around 20% by the year 2020.
  • Our analysis of themes contained on the Humana YouTube channel indicates the current strategy is promoting the Bold Goal initiative, the alignment of Humana products with the requirements of seniors and older, middle-aged Americans, and the Humana Foundation's involvement with community partners, all of which reflect a company emphasis on values.
  • Our analysis of a collection of Humana Medicare Advantage commercials suggests they are focusing on "better living" and the convenience and simplicity of Humana products
  • In 2019, Humana issued a press release for a Kansas City community partnership addressing disparities in minority health care.
  • According to a 2018 statement by Humana's CEO, Bruce Broussard, the company's marketing strategy concentrates primarily on integrated care and the individual health care member, with an emphasis on seniors living with chronic conditions.
  • Humana's 2018 annual report notes that health care is trending toward holistic, value-based care that is centered on consumer outcomes.


Research Strategy:

To provide the requested information on what Humana is currently doing regarding advertising, we began by thoroughly examining its available company reports and press releases, including its most recent annual report filed with the SEC. The information we came across indicated Humana is continuing to focus its business strategy on value-based care, as well as the benefits of its Medicare Advantage products for seniors living with chronic conditions.

To address advertising messages more directly, we expanded our search to include any relevant information on Humana's advertising strategy using reputable marketing reports and case studies, as well as PR-related news articles. This research strategy led to a possible relevant report from Mintel, but it is behind a paywall. We were not able to locate any useful case studies from known databases such as Elfie, WARC, etc. However, we were able to find an analysis of Humana Medicare Advantage's direct mailing strategy.

In order to provide additional insights into Humana's advertising messages, we conducted our own qualitative analysis of collections of Humana television and internet commercials. This analysis suggests its messaging is utilizing themes relating to better living, value-based care, and Humana's ongoing efforts to improve the health of the communities with which they are involved.
Part
05
of five
Part
05

Humana: SWOT

Humana's identified strengths are a strong brand portfolio, high levels of customer satisfaction, a track record of successfully integrating complimentary firms through mergers and acquisitions, superb performance in new markets, reliable suppliers, and a highly skilled workforce. Humana’s identified weaknesses are poor financial planning, high day sales inventory, rented property, a lack of market research, and poor R&D; threats to Humana are competitors’ technological developments, increasing competition, interest rates, and raw material costs. The entire project is here.

Humana: SWOT


Strengths

  • Humana has developed its brand portfolio by heavily investing in its brand portfolio through the years. The company's brand has been in the market for years; it is one of the most well-known brands in the industry.
  • This strong brand allows the company to easily raise capital and launch new products that will be accepted by consumers.
  • According to the latest data from Bloomberg, Humana has 41,600 employees. Humana’s training and learning programs have resulted in a highly skilled workforce.
  • Humana has a dedicated customer relationship management department. Humana has been able to increase its value in the eyes of its customers by maintaining high product quality through the years.
  • Human has successfully integrated numerous new technology companies. These mergers have allowed the company to enter new markets with new products.
  • Humana has become an expert in successfully entering into and flourishing in new markets. These market entries have allowed the company to build new revenue streams.
  • Humana has a strong relationship with its dealers and is a reliable supplier of raw materials.
  • Humana has been relatively successful in executing new projects. The company has had a five consecutive years of profit.
  • Humana has a strong social media presence with millions of followers across prominent platforms. The company also maintains a website that draws large amounts of traffic and sales

Weaknesses

  • Compared to the fastest growing players in the industry, Humana’s invests less in its research and development. Furthermore, the company has not conducted any actual market research over the last two years.
  • Humana’s relatively low levels of current assets compared to its current liabilities indicate a potential for liquidity problems going forward.
  • Compared to the industry average, Humana takes longer to get its products sold.
  • Additionally, a significant amount of Humana’s property is rented instead of owned.

Opportunities

  • The United States’ latest tax reduction has been beneficial to Humana by lowering the company’s recurrent expenditures.
  • Low rates of inflation mean that the market will remain stable, and Humana’s input costs will remain low.
  • Humana has invested vast sums into its online platform; because of increasing growth in the e-commerce industry, Humana’s investment is expected to open new sales channels.
  • Humana’s social media presence should give the company an advantage when promoting its products on social media platforms.
  • New environmental policies by the United States government are expected to level the playing ground for all industry players. Humana will be able to utilize its technological advantages in these conditions.

Threats

  • Increasing technological developments by some of Humana’s competitors represent a threat to the company.
  • Industry profitability has increased the number of players within the space. Increased competition has put downward pressure on prices, sales, and profitability.
  • While low inflation has meant stable markets, interest changes have not provided a stable financial environment.
  • While Humana is a reliable supplier of raw material, rising costs of those materials pose a threat to the company’s profitability.

Research Strategy:

We began our research by looking for any industry reports or studies that would provide the information requested. We were successful in finding previously compiled SWOT analyses. Our next task was to validate the information in these studies through multiple sources. We expanded our search to market research firms like Market Research, Market and Market, Research Markets, and others. Though we did locate further information, much of those data were not publicly accessible (i.e., behind paywalls). However, we include those sources here on the possibility that further research from those sources may be of interest. Additionally, we acquired Humana’s annual report and examined the company website.

Sources
Sources

From Part 01
Quotes
  • "In August, the American advisory organization for insurers (the American Association of Insurance Services)revealed that it had launched an insurance database and reporting tool running on IBM's Hypderledger Fabric ledger."
  • "in December, another alliance – formed by the likes of Humana, Multiplan, and Optum – announced the addition of two new members, Ascension and (once again) Aetna. Together, these insurers would begin a trial of blockchain solutions intended to solve a variety of problems common to the health insurance industry."
From Part 02
From Part 03
Quotes
  • "Revenues                                           $56,912 $53,767 $54,379 Net income                                         $1,683   $2,448   $614"
  • ""
Quotes
  • "Humana gross profit for the twelve months ending March 31, 2019 was $11.035B, a 5.66% increase year-over-year."
  • "Humana annual gross profit for 2018 was $11.03B, a 7.39% increase from 2017."
  • "Humana annual gross profit for 2017 was $10.271B, a 9.59% increase from 2016. "
Quotes
  • "Humana net income for the quarter ending March 31, 2019 was $0.566B, a 15.27% increase year-over-year. Humana net income for the twelve months ending March 31, 2019 was $1.758B, a 3.62% decline year-over-year."
  • "Humana annual net income for 2018 was $1.683B, a 31.25% decline from 2017."
From Part 04
Quotes
  • "Humana has a Bold Goal – a population health strategy to improve the health of the communities we serve 20 percent by 2020 and beyond. Together, with physician practices and community partners, we are cocreating solutions at a local level. By addressing social determinants of health such as food insecurity, loneliness and social isolation, we are working to improve the health of those living with chronic conditions one person, and one community at a time. Join a community Health Advisory Board near you."
Quotes
  • ""Humana is committed to addressing health disparities in Kansas City as part of our Bold Goal initiative to improve the health of communities across the country 20 percent by 2020," said Jeremy Gaskill, Humana's regional president. "We are proud to partner with the Black Health Care Coalition to mobilize local organizations, physicians, and business leaders around this salient medical problem and deliver health care in places where minority residents spend time and feel comfortable.""