Humana Insurance Company
Humana Insurance Company
500 West Main Street
The Humana Building
Louisville, Kentucky 40202
Humana Incorporated is considered to be one of largest firms that publicly traded companies in the healthcare industry. A total of 6.2 milion citizens in the United States are enrolled in their health plans. These are available in 16 states including Puerto Rico. Members in Texas, Illionois and Florida make up 45% of its clients. Humana offers health insurance products which are related to Medicare and Medicaid. Their expertise lies in health maintenance organization (HMO), also preferred provider organization (PPO). This firm is in charge of managing the healthcare services of the U.S. Department of Defense. They provide specialty and administrative services like group life insurance, worker’s compensation and dental plans. Together with United HealthCare Corporation, they created the largest managed-care company in the country when it came to plan participants. This alliance was created in May of 1998 and operated under the name of United HealthCare.
The history of Humana began in nursing homes in the eary 60’s. In Loiuseville, Kentuky, two lawyers built a nursing home with $1,000 worth of capital. This investment was done with four other friends. The Heritage House was established by David and Cherry Jones, and were soon given the opportunity to expand their business in Virginia, Kentucky and Connecticut. In the middle of 1960, the industry experienced a boom upon the establishment of Medicaid and Medicare. The founders sold what stock they were able to accumulate for the past seven years and used the money to finance their expansion plans. By that time, Extendicare Inc. had over 40 facilities and was widely known as the biggest home nursing company in the nation.
In 1968, Extendicare branched out to hospitals with the same services they had offered the nursing home sector. This venture proved to be very successful and within two years, the company was able to get additional nine hospitals. In 1972, the firm shifted its focus and divested all nursing homes for preference of hospitals.
Humana became the company’s brand in 1974. A unique characteristic of the corporation was that management decisions were never made out of conformity. Certain policies like refusing to overpay for acquisition of hospitals, refusal to manage hospitals that were not company-owned and rigid cost-control measures were strictly enforced in a management type that was centralized. The corporation focused on profitable goals and was very strict in terms of productivity.
There was a change in policy in the 1990’s when management sought to improve its relations with doctors and patients. This can be credited to Gregory H. Wolf who is the current CEO with Jones remaining as the chairman. Two major acquisitions were done in 1997. These included Physician Corporation of America for $290 million in cash and ChoiceCare Corporation for $250 million. Today, Humana’s yearly revenues amount to more than $28 billion.
The megamerger created a $5.4 billion stock swap with United HealthCare Corporation on May 28, 1998. This was the largest in the United States for managed healthcare companies.