Specialist
Former AVP at Humana Inc
Agenda
- Recent trends and developments within the Medicare Advantage and managed care market, focusing on Humana (NYSE: HUM)
- Competitive landscape overview and profile differentiation among key players such as UnitedHealth Group (NYSE: UNH)
- Strategic M&A opportunities and potential acquisitive appetite analysis
- Dual eligible population engagement strategies concerning social determinants of health and health justice
- Medicare Advantage demographic shifts, HMO (health maintenance organisation) and PPO (preferred provider organisation) dynamics, trickledown effects on health insurance plans and implications towards value-based care
Questions
1.
What are some of the major trends and developments you've been following in the Medicare Advantage managed care space over the past 12 months or so that might better inform our Interview today on Humana?
2.
Long-time Humana CEO Bruce Broussard will be stepping down from the company in H2 2024. The news was not overly surprising but the announcement was made as the CMS [Centers for Medicare & Medicaid Services] star ratings update was imminent. What's your reaction to the departure as well as the timing of the announcement to the public right before Q3 2023 earnings?
3.
I believe Broussard is going to be succeeded by Envision Healthcare CEO Jim Rechtin, who brings experience from Optum Care and DaVita Medical Group. What are your thoughts on his ability to continue the success of his predecessor and the expertise in value-based care and Medicare Advantage demographics? What do you think are the core strategic priorities for Rechtin in the first year of his tenure?
4.
How do you anticipate Humana's new management will balance growth vs profitability
considerations within the core Medicare Advantage plan business? I believe historically we've seen an emphasis on growth but the end of the Broussard tenure has potentially intimated a shift back towards profitability.
5.
I appreciate one of your prior responsibilities at Humana was to drive integration among the silos of marketing, sales and product teams in Medicare Advantage. Could you discuss the company's internal integration efforts, the benefits or efficiencies that have been realised and where there may still be room for improvement from streamlining operations?
6.
Looking at the Medicare Advantage business, Humana indicated that in summer 2023, it expected other carriers to trim benefits due to softer 2024 rates, creating the opportunity for the company to preserve benefits and take share. As its investors learned with the launch of the AEP [annual enrolment period], most other carriers preserved or even enriched benefits modestly, eliminating any incremental advantage it hoped to have. How do you think it should respond to those updated dynamics? What benefit augmentations or pricing cuts might it need to make to remain competitive, and at what hit to the bottom line?
7.
How would you juxtapose the marketing strategies and brand reputations of leading Medicare Advantage insurers such as United, Aetna and Elevance against Humana's? How do these companies think about growing their membership bases, benefit mixes and regional footprints respectively in light of the commentary around Humana being a Medicare Advantage pure-play?
8.
You've mentioned Humana has a pretty extensive geographic footprint. Which specific markets do you think the company is better-positioned in to grow market share and which might be more susceptible to churn or erosion? What does the geographic footprint look like at this point?
9.
What are the key drivers of churn in Humana's membership base today? What are the glaring weaknesses on the benefit quality side and how expensive would they be to patch up?
10.
What's important for us to understand about Humana's local broker relationships? How does the company attempt to cultivate broker loyalty and make itself the plan to recommend to seniors ageing into Medicare Advantage? Feel free to weave in the e-broker channel as well, if relevant. It seems it's been difficult to establish any loyalty there.
11.
Do you think Humana is positioned to grow its Medicare Advantage base below, in line, or above market growth for this AEP?
12.
What initiatives is Humana employing on the engagement side to get more accurate risk coding on its membership base and contain costs of care once it enters a new market?
13.
Could you talk about Humana's approach to dual-eligible populations or D-SNPs [dual-eligible special needs plans] and the company's opportunity to carve out further membership gains there? What tech infrastructure does it have in place to better leverage social determinants of health and mitigate outlier costs on its riskiest members?
14.
Humana management has indicated that tightly managed members – for example, those in PPM [physician practice management] relationships – performed materially better than the overall book. I think you alluded to some of that outperformance when we were talking about Florida. What levers can the company pull to steer more members into the PPM bucket? How much of that is within its control and what does its strategy look like there?
15.
What do you make of the news that Cigna is exiting its Medicare Advantage business and looking for strategic buyers? I appreciate Humana might not be a likely purchaser due to anti-trust reasons, but is this creating opportunity to capture members potentially churning off that plan due to the ownership disruption, or should we expect those lives to be fairly sticky?
16.
What's your assessment of Humana's value creation plan initiatives and its ability to rationalise costs across the business? Where do you see more low-hanging fruit to target for efficiencies vs the areas that are already running fairly lean?
17.
How do you think Humana is thinking about evolving coverage of GLP-1 [glucagon-like peptide-1] medications for Medicare Advantage members? Clearly, the drugs are extremely expensive now, but given everything we've discussed about plan-hopping among seniors and MLR [medical loss ratio] considerations, how liberal do you think the company will be around GLP-1 coverage over the next few years and why?
18.
Could you discuss the shifting dynamics within the Medicare Advantage demographic going forwards and what this means for plan strategy? The overwhelming membership today exists on an HMO [health maintenance organisation] plan, which may restrict access. As baby boomers start to dominate the PPO [preferred provider organisation] plans, how should Humana adjust to get ahead of this shift?
19.
How do you assess Humana's approach to strategic M&A? I know the company is refocusing on profitability, but what acquisitive moves might it make over the next 12 months or so to bolster its healthcare franchise?
20.
What do you think will be the biggest surprise for Humana or the Medicare Advantage managed care organisation market in 2024? Are there any contrarian takes or opinions that you'd like to prognosticate?
