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$HUM realigned certain of its businesses for its financial reporting segments to correspond with internal management reporting changes and its planned exit from the individual commercial medical business on Jan. 1, 2018. The company’s segments now include Retail, Group and Specialty, Healthcare Services, and Individual Commercial.
Healthcare company $HUM has appointed Luis Torres Olivera as President, Health and Well-being, for the Puerto Rico Market. Torres Olivera, who joined the company more than a decade ago, has overseen several key projects. He succeeds Earl Harper, who will be retiring at the end of February 2018.
$KND's BoD approved a definitive agreement whereby it will be acquired by a consortium of three companies: TPG Capital, Welsh, Carson, Anderson & Stowe and $HUM for about $4.1Bil in cash including the assumption or repayment of net debt. The transaction is expected to close during the summer of 2018.
For 2018, $HUM estimates membership growth to be in low-single digits. Next year, financial performance is expected to face headwinds from a non-deductible fee of about $1Bil and lower PDP growth in the pharmacy business.The transition associated with workforce reduction will be completed by January 2018, and its effects will show up in 1Q18.
$HUM continues to see lower-than-expected mail order pharmacy utilization in the coming quarters, particularly for new members in the Humana‐Walmart PDP offering. Humana has adopted various measures to reduce administrative costs in a sustainable way for 2018 and beyond. The workforce reduction strategy is expected to affect about 6% employees.
$HUM said it is planning investments in care coordination technology and analytics, to fill shortcomings in those areas. The expansion strategy will be executed using models such as Owned Primary Care Clinics and Alliance Clinics. The company is also looking for M&A opportunities in the ‘provider’ space, mainly for expansion of its MSL platform.
Encouraged by its improved 3Q17 results, $HUM raised the non-GAAP earnings per share outlook for fiscal 2017 to $11.6 from the earlier estimate of $11.5. The company, meanwhile, lowered its GAAP earnings guidance to $17.62 per share from $17.83 per share it had projected earlier. Full year operating cash flow is estimated to be $3.3-$3.6Bil.
$HUM, which provides health and well-being services, reported an 11% gain in third quarter 2017 profit, despite a 3% YoY decline in revenues to $13Bil. Earnings per share moved up to $3.44 from $2.98, owing mainly to lower income tax provision compared to last year. Adjusted earnings were $3.39 per share, up 6% from 3Q16.
$HUM unit Humana Foundation has appointed Walter D Woods as CEO. Previously, Woods served as president of the Evangelical Lutheran Good Samaritan Foundation. He joined the Foundation after holding various executive-level roles in organizations such as AARP Foundation, World Bank and Boys & Girls Clubs.
$HUM is expanding its existing relationship with TruHearing, a hearing health care company, to include hearing care and hearing aid benefits within more of its Medicare Advantage plan offerings. $HUM is including this hearing benefit on certain 2018 Medicare Advantage plans, which will be offered in 34 states.
$HUM and CleanSlate Centers have signed a new contract that provides in-network access for Humana Medicare Advantage and employer plan members at CleanSlate outpatient addiction treatment centers. Terms of the agreement were not disclosed.
$HUM completed $1.50Bil accelerated share repurchase program, repurchasing a total of about 6.67MM shares at an average price of $224.81 per share. This was completed as part of its current $2.25Bil share repurchase authorization expiring on Dec. 31, 2017. As of Aug. 28, 2017, about $750MM of the total $2.25Bil authorization was remaining.
$HUM signed a new contract with Summit Health that provides in-network access for Humana Medicare members at Summit Health facilities and providers in south-central Pennsylvania. The contract is effective Aug. 1, 2017. Terms of the agreement were not disclosed.
$HUM stated that it is optimistic about growth in the Medicare Advantage business for FY18. The company has tried to maintain stability in benefits and also improve relationships with brokers. $HUM believes its Net Promoter Score combined with other factors will help in retention which is a positive for the business.
During 2Q17, $HUM’s total premiums and services revenues dropped 3% to $13.43Bil from 2Q16. The YoY decrease primarily reflects lower Individual Commercial segment revenues, partially offset by higher Retail segment revenues primarily resulting from the company’s Medicare business. The consolidated benefit ratio was 82.5% in 2Q17.