Humana (HUM) Acquires Remaining Shares at Kindred at Home

Humana Inc. HUM completes its previously announced buyout of Kindred at Home or KAH, which is the nation’s largest home health and hospice company. The deal, which was announced in April this year, strengthened the company’s position as the nation’s leading home-care provider. This is expected to enhance health outcomes of patients who prefer care at home.

Demand for at-home care is at its peak right now and expected to continue for years to come. The leading health insurer is committed to providing clinical care across its lines of business.

KAH caregivers offer home health, hospice and personal care services to more than 550,000 patients every year. Addition of their skills will help Humana expand its home health offering with focus on clinical innovation, better patient outcomes, cost reduction for availing medical care, etc.

In this regard, KAH’s home health operations are integrated into the acquirer’s Home Solutions business. The same will adopt the latter’s new payer-agnostic healthcare services brand CenterWell, which is set to transition to CenterWell Home Health beginning 2022.

The health insurer acquired 40% ownership stake in Kindred for $2.4 billion in 2018. The buyout of the remaining interest will allow it to more quickly scale up its plans to launch value-based care models and innovative care.

In June, Humana inked a deal to purchase the home health provider One Homecare Solutions (onehome) from the private equity group WayPoint Capital Partners. These deals definitely place this currently Zacks Rank #3 (Hold) company as a value-based home health care provider on a national scale. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

These strategic initiatives carved a growth path for the company. Some of the acquisitions made by the company helped it achieve long-term growth.
These include the purchase of Family Physicians Group, Your Home Advantage and Curo among others, which aided the company to widen its reach in the home health and hospice market.

Humana also closed the Enclara deal in January, expanding its hospice pharmacy business line. The company announced its iCare buyout in Wisconsin during December 2020, which extended its Medicare business.
The health insurance industry is poised for tremendous growth in the long term, driven by the aging U.S. population, patients' desire for independence and the emergence of home health as a cheaper care modality. Players in the industry should continue to benefiting from the demographics of U.S. senior citizens and the need for looking after higher-acuity patients in a home-nursing environment.  

Price Performance

Shares of Humana have lost 0.8% in a year’s time against its  industry’s growth of 29.4%.

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Other companies in the same space, such as Anthem Inc. ANTM, Centene Corporation CNC and The Joint Corp. JYNT have gained 32.7%, 0.6% and 370.5% each in the same time frame.

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