- Humana is acquiring Enclara Healthcare, a hospice pharmacy and benefit management provider, for an undisclosed sum as the Louisville, Kentucky-based payer looks to round out its pharmacy offerings for high-need patients.
- The deal announced Monday includes the acquisition of mail-order pharmacy and retail PBM Enclara Pharmacia, boutique PBM GuidantRx and pharmacy Avanti Health Care Services. Enclara's palliative care provider, Turn-Key Health, is not included.
- The transaction is expected to close in the first half of next year.
The buy of the private, for-profit Enclara is meant to bolster Humana's offerings for the elderly, a population that accounts for a disproportionate share of the country's healthcare costs. Per-person spending on healthcare for adults aged 65 and older was $19,098 in 2014, more than five times higher than spending per child and almost three times the spending per younger adults, according to CMS.
Healthcare companies and especially insurers have been scrambling to stay on top of the medical needs of this population in a bid to lower costs. Humana hopes the addition of Enclara will allow it to streamline its mail-order pharmacy and build out its offerings for in-home pharmacy through technology like enhanced mobile medication management and EHR connectivity, the company said.
"Enclara represents a logical extension of Humana Pharmacy's strategy given the company's unique ability to play a role in advanced illness care and supplement our existing care delivery system," Scott Greenwell, president of Humana Pharmacy Solutions, said in a statement.
Humana's last acquisition also focused on the hospice space, following the $14.1 billion snap-up of Kindred Healthcare, a home health, hospice and community care provider in July last year. Humana also acquired American Eldercare, a home- and community-based provider for disabled people and the elderly, in 2013.
Payers heavily involved in Medicare and privately-run Medicare Advantage plans are interested in hospice and palliative care companies because costs are highest at the end of life. Payers can see reduced costs and higher reimbursements if they shunt patients, especially the chronically ill, away from the hospital and into cheaper, community-based programs.
Humana is the nation's second largest provider of MA plans, with 3.5 million members, eclipsed only by UnitedHealthcare, with 5.2 million beneficiaries in MA.
Humana's MA plans helped drive revenue to $16.2 billion in the third quarter of this year, up more than 15% year over year. However, the payer is expecting a significant headwind in 2020 with the reinstatement of the health insurance fee. Along with laying off 2% of its workforce, Humana has warned it may have to increase premiums as a result of the tax.
Philadelphia-based Enclara, which serves more than 450 hospice providers and 97,000 hospice patients daily and has an estimated annual revenue of $27 million, is more than two decades old. It's currently owned by its management and private equity firm Consonance Capital Partners, which came on board in 2014.