Humana (HUM) Scales a 52-Week High on Strategic Alliances - Analyst Blog

On Dec 18, 2014, shares of Humana Inc. (HUM) scaled a new 52-week high of $149.09 supported by a slew of positives. Humana had entered into a number of Accountable Care agreements over the last two months in order to enhance its membership as well as to deliver improved healthcare to its members.

In Nov 2014, the company inked Accountable Care agreements with Valence Health, one of the major providers of clinical integration, population health and value-based care solutions, Summit Medical Group, and MultiCare Health System. While the first alliance is aimed at assisting healthcare provider organizations in opting for Medicare Advantage (MA) value-based arrangements, the second one is a seven-year agreement intended to improve healthcare and bring about more coordinated services for the MA members of Humana in east Tennessee. Meanwhile, the third deal is targeted at enhancing health care for MA members of Humana in South King and Pierce Counties, WA.

Moreover, Humana partnered with the retail division of CVS Health – CVS/pharmacy – to make payment of health insurance premiums more convenient for Humana members in the same month. Humana also made two collaborations on Nov 19, 2014, the first with Alignment Healthcare and UNC Health Care, and the second with The Bill, Hillary & Chelsea Clinton Foundation.

Both initiatives aim to improve healthcare outcomes. While the first deal targets the provision of improved Medicare Advantage HMO plan in the Raleigh, NC, the second one will cater to the people in Adams County, MS. Also, later that month, the company inked a population health management partnership with an independent physician association, IntegraNet Physician Resource, Inc. to reach improved and more coordinated healthcare to MA members in Dallas/Fort Worth.

This month, Humana inked Accountable Care agreements with Banner Network Colorado (BNC) and HealthCare Partners Nevada. Through the first deal, Humana intends to enhance health care for individuals and families purchasing insurance in Weld and Larimer counties through the Connect for Health Colorado and Humana commercial health maintenance organization (HMO) programs.

On the other hand, the second deal expands Humana's existing relationship with HealthCare partners while providing comprehensive primary care services for Humana's MA members, original Medicare beneficiaries and patients with most commercial insurance programs.

Humana also entered into an agreement with Metro Health this month to provide a new health plan to people purchasing insurance through the Michigan Health Insurance Marketplace (“exchange”) in Grand Rapids. The company signed a similar agreement with Saint Luke's Health System to provide a new health insurance plan to Missourians buying insurance through the Missouri Health Insurance Marketplace.

Moreover, Humana's one-year return of 49.20% was higher than that of S&P 500's return of 16.10% and that of other industry players like UnitedHealth Group Inc. (UNH), Aetna Inc. (AET) and Anthem, Inc. (ANTM) that recorded returns of 45.06%, 38.61% and 45.64%, respectively.

Humana presently carries a Zacks Rank #3 (Hold).

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