Humana To Divest End-Of-Life Care Business For $900 Million

Humana, a key player in the privatized Medicare Advantage insurance sector for seniors, has revealed its strategy to sell its minority share in an end-of-life service provider for $900 million.

On Wednesday, Humana announced that it had formalized a “definitive agreement with a consortium of investors to divest all or substantially all of its minority interest in Gentiva, the nation’s leading provider of end-of-life services, including hospice and palliative care.”

Humana stated that the proceeds from this transaction will be used for general corporate purposes. The transaction is anticipated to finalize in the third quarter of this year, pending various regulatory approvals.

This divestment of Gentiva is part of an ongoing initiative Humana began several years back, even before Jim Rechtin assumed the role of chief executive, to divest certain “non-core” Kindred At Home businesses, which include hospice, palliative, and personal health care services.

Humana highlighted that “in 2022, Humana announced an agreement to divest a majority interest in the Hospice and Personal Care divisions of Humana’s Kindred at Home subsidiary (KAH Hospice) to private investment firm Clayton, Dubilier & Rice.” These divisions were later restructured into a standalone entity and rebranded as Gentiva, which now stands as the nation’s largest end-of-life care provider, with thousands of dedicated clinicians and caregivers operating at over 430 locations across 35 states.

While Humana is renowned for its health insurance services, providing coverage to more than 6 million seniors through its Medicare Advantage plans, the company is making significant investments under Rechtin in its CenterWell healthcare services division, which encompasses pharmacy, specialty pharmacy, and related distribution. CenterWell contributed in excess of $22 billion in revenue to Humana’s total sales of $129.6 billion last year, as per the insurer’s most recent financial report.

Rechtin has steered CenterWell to concentrate more on rapidly growing sectors, including specialty pharmacy and pharmacy services. Earlier this year, for instance, Mark Cuban’s Cost Plus Drug Company and Humana’s CenterWell Pharmacy announced a collaboration “to develop new end-to-end employer prescription solutions.”