Louisville-based Humana Inc.’s share price has risen from about $66 per share in December 2012 to above $145 per share today.
“We have had a wonderful run over the last few years” in terms of the company’s market valuation, Humana president and CEO Bruce Broussard said this morning at a Greater Louisville Inc. breakfast event.
This sort of thing is happening all over the insurance business. Share prices for UnitedHealth Group Inc. and Aetna Inc. have nearly doubled in the same period, for instance.
Broussard said the company’s rising share price is one of the top things he is asked about.
The Patient Protection and Affordable Care Act has driven up insurance enrollment in the last few years because of new coverage requirements. But Broussard said where Humana (NYSE: HUM) has been very successful is in controlling costs through engaging its members in their health.
Much of Humana’s costs come from the money it has to pay out in claims. Much of those claims costs come from chronic conditions such as diabetes or obesity, he said.
To lower those costs, Broussard said, Humana has to get members more involved in their own health. He said the company is doing this in a lot of different ways, including a fitness rewards program (HumanaVitality) and home inspections that can reduce trip-and-fall hazards for seniors.
These sorts of programs align with Broussard’s idea that health care is becoming increasingly consumer-based.
“We’re not just treating a symptom, we’re treating the individual as a whole,” he said. “It not only saves money but it improves their lifestyle.”
Humana’s revenue for the nine months ended Sept. 30 rose 16 percent from a year earlier, to $36.1 billion. But the company’s net income was down about 20 percent, to about $1 billion, in part because of higher operating expenses.
The company has about 13.7 million medical members and about 7.7 million specialty members. It’s one of the largest employers in the city with about 11,235 full-time equivalent workers in Louisville.
Date: December 18, 2014