- Humana plans to open about 100 new value-based primary care clinics for Medicare patients between 2023 and 2025 through its second joint venture with private-equity firm Welsh, Carson, Anderson & Stowe, according to a Monday release from the payer.
- The clinics will be managed and operated under Humana’s CenterWell Senior Primary Care brand, and WCAS will have majority ownership while Humana will have a minority stake.
- The $1.2 billion expansion builds upon an existing venture with the same firm to open 67 clinics by early 2023.
The move comes as traditional payers compete with rival startup insurtechs for lucrative Medicare Advantage members, for which the government provides a flat fee, rather than fee-for-service payments, with payers taking on the risk of caring for those seniors.
Humana slashed its outlook for MA plan member growth earlier this year as members actively shopped and generated churn in the industry during the latest open enrollment period, and the payer lost members to other insurance carriers, CEO Bruce Broussard said at the time.
It’s now looking to boost its offerings by expanding its primary care clinics into more markets, and by the end of 2022 it expects to serve Medicare patients in about 250 clinics, according to the release.
As of March 31, Humana operated a total of 214 clinics, including 37 under the current joint venture and 177 other wholly-owned centers.
The clinics will operate under Humana’s CenterWell Senior Primary Care and Conviva Care Solutions brands.
Humana’s health services division Centerwell was recently rebranded, and its senior-focused primary care clinics previously operated as Partners in Primary Care in several states and Family Physicians Group in the Orlando area.
The payer will receive a management fee, including performance-based incentives, for the management of all joint venture clinics.
The agreement also includes put and call options through which Humana may buy WCAS’ interest.
Humana can do so beginning in 2028 or five years after the opening of each cohort of clinics.
WCAS may require Humana to purchase its interest beginning in 2030 or seven years after the opening of each cohort of clinics.
Although Humana lowered MA growth forecasts for the year, it did see total MA membership grow 5.2% year over year, according to the payer’s first quarter earnings results.
MA has continued to see growth in membership every year since the early 2000s, and in 2021 MA enrollees made up 42% of the total Medicare population. That figure is projected to rise to 51% by 2030, according to the Kaiser Family Foundation.
The number of MA plans rose 8% from 2021 to 2022, with a total of 3,834 plans available nationwide. That's the largest number of available plans in more than a decade, according to KFF.