Humana

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Humana Inc.
Type	Public (NYSE: HUM)
Founded	Louisville, Kentucky (1961)
Headquarters	Louisville, Kentucky, USA
Key people	David Jones and Wendell Cherry, co-foundes Mike McCallister, president and CEO
Industry	Health insurance
Revenue	▲ US $25.3 billion (2007)[1]
Net income	▲ US $833.7 million (2007)[1]
Employees	25,000 (2007)[2]
Website	www.humana.com

Humana Inc. (NYSE: HUM), founded in 1961 in Louisville, Kentucky, is a Fortune 500 company that markets and administers health benefit consumer services. With a customer base of over 11.5 million in the United States, the company is the largest Fortune 500 company headquartered in the Commonwealth of Kentucky,^{[citation needed]} with a market cap of over US $13 billion, $25.2 billion in revenue, and over 26,000 employees nationwide. Humana markets its health benefit consumer services in all 50 states, D.C., Puerto Rico and has international business interests in Western Europe.

Contents 1 History 1.1 1961-1993: Nursing homes and hospitals 1.2 1984-present: Health insurance 1.3 Acquisitions 2 Corporate affairs 2.1 Leadership 2.2 Locations 2.3 Philanthropy 2.4 Sponsorship 2.5 Humana Military Healthcare Services 3 Controversy 4 References 5 External links

[edit] History

[edit] 1961-1993: Nursing homes and hospitals

The company was founded by David Jones and Wendell Cherry as a nursing home company in 1961. Then known as Extendicare, the company became the largest nursing home company in the United States.^{[citation needed]} Extendicare later divested the nursing home chain and moved into purchasing hospitals in 1972, becoming the world's largest hospital company in the 1980s.^{[citation needed]}

The corporate name was changed to Humana Inc. in 1974. Humana experienced tremendous growth in the years that followed, both organically and through the takeover of American Medicorp Inc. in 1978, which doubled the company's size.^{[citation needed]} During the mid-1970s, the company used a fast-track construction process to complete and open one hospital a month.^{[citation needed]} This accelerated construction schedule, which compressed time by overlapping processes, allowed Humana to develop hospital projects faster than the industry norm.^{[citation needed]} During that construction boom, Humana developed the double corridor model for hospital construction. This highly efficient design minimized the distance between patients and nurses by placing nursing support services in the interior of the building with patient rooms surrounding the perimeter.^{[citation needed]}

Humana brought the pioneering artificial heart research of Dr. Robert Jarvik and Dr. William DeVries to Louisville, creating the Humana Heart Institute in 1985.^{[citation needed]}

The 1990s marked Humana's transition into a consumer health benefits company. Humana spun off its hospital operations from the health insurance operations in 1993, creating Galen Health Care, which then merged with Columbia/HCA.

[edit] 1984-present: Health insurance

As the American health care system evolved in the 1980s, Humana developed and began marketing health insurance products.

United Healthcare attempted to acquire Humana in 1998. United's effort failed when it reported an almost billion-dollar quarterly loss.^{[citation needed]}

In 2001, Humana partnered with Navigy, Inc., a subsidiary of Blue Cross and Blue Shield of Florida, Inc., to launch Availity.^{[citation needed]}

In 2005, Humana entered into a business partnership with Virgin Group, offering financial incentives to members for healthy behavior, such as regular exercise.^{[citation needed]}

The Business Health Care Group of Southeast Wisconsin (BHCGSW) chose Humana as its administrative partner to help reduce health care costs. Today, the BHCGSW represents more than 200 member companies, including large and small employers representing more than 150,000 health care consumers in Southeastern Wisconsin.^{[citation needed]}

In 2006, Humana launched an education campaign to market Medicare Advantage (MA) and Prescription Drug Plans (PDP) nationwide to Medicare eligible consumers, following the passage of the MMA.

Humana also launched RightSource, a national mail-order retail pharmacy business in 2006.^{[citation needed]}

Humana screened the 1942 classic Casablanca in select movie theaters nationwide as part of a campaign to preview its Medicare Advantage consumer services in 2007, marking the first time in more than 60 years that the film was seen nationally in movie theaters.^{[citation needed]}

In its March 2008 issue, Fortune Magazine named Humana one of the Top 5 Most Admired Healthcare Companies in the United States.^{[citation needed]}

[edit] Acquisitions

This list represents some of the major acquisitions completed by Humana since 1990 in the U.S.:

Year	Acquired company	Location
1990	Michael Reese Health Plan	Illinois
1995	The Dental Concern	Illinois
1995	Carrington	Illinois
1996	Employers Health Insurance (EHI)	Wisconsin
1997	Physicians Corp of America (PCA)	Texas
1997	ChoiceCare	Ohio
2000	Memorial Sisters of Charity	Texas
2003	Oschner Health Plan	Louisiana
2005	CarePlus Health	Florida
2005	Corphealth Behavioral Healthcare	Texas
2006	CHA Health	Kentucky
2007	Compbenefits	Georgia
2007	KMG	Minnesota
2008	OSF Healthplans	Illinois

[edit] Corporate affairs

[edit] Leadership

Michael B. McCallister, a 30+ year company veteran, is president and chief executive officer of Humana. McCallister began his career in 1974 as an analyst in the company's finance department. In 2006, he was rated as one of the most successful CEOs in American business at creating shareholder value by Forbes Magazine. McCallister is a member of the Business Roundtable.

David Jones, Jr. serves as chairman of the board of directors. Jones is the son of company founder, David Jones, Sr.

In an interview published by The Courier-Journal, the day following his retirement as chairman of the board of directors, David Jones, Sr. indicated he had vehemently opposed United Healthcare's effort to takeover Humana in 1998, but was out voted by other members of the board of directors.

The year the leader joined the company is listed in brackets.

• Michael B. McCallister, President and Chief Executive Officer [1974]
• James (Jim) E. Murray, Senior Vice President and Chief Operating Officer [1989]
• James (Jim) H. Bloem, Senior Vice President, Chief Financial Officer and Treasurer [2001]
• Bruce J. Goodman, Senior Vice President and Chief Service and Information Officer [1999]
• Thomas (Tom) J. Liston, Senior Vice President, Senior Products [1994]
• Steve Moya, Senior Vice President and Chief Marketing Officer [2000]
• Bonita (Bonnie) C. Hathcock, Senior Vice President and Chief Human Resources Officer [1999]
• Jonathan (Jack) T. Lord, M.D., Senior Vice President and Chief Innovation Officer [2000]
• Arthur (Art) P. Hipwell, Senior Vice President [1979]
• Kathleen (Kathy) Pelligrino, Vice President and Acting General Counsel [1992]
• Heidi Margulis, Senior Vice President of Government Relations [1985]
• Thomas (Tom) Noland, Senior Vice President of Corporate Communications [1985]
• Bruce Perkins, Senior Vice President [1982]
• William (Bill) Tait, Vice President, Market Operations [2001]
• Steven (Steve) E. McCulley, Vice President and Controller, Principal Accounting Officer [1990]

[edit] Locations

The Humana Building in Louisville, Kentucky is a well-known example of postmodern architecture designed by Michael Graves and completed in 1985. Humana sponsored an architectural competition to determine the design of its headquarters building. Scale models of the participants (including the submissions of Helmut Jahn, I. M. Pei, Michael Graves and others) are contained in a vestibule located directly above the Main Street entrance.

[edit] Philanthropy

The Humana Foundation donates millions of dollars each year to non-profit organizations in the markets where the company does business,^{[citation needed]} including the annual Humana Festival of New American Plays at Louisville's Actors Theatre. The foundation donated $1 million to the Gulf Coast region following Hurricane Katrina.^{[citation needed]}

[edit] Sponsorship

Humana is the official health benefits provider of the PGA Tour and Champions Tour. PGA Tour player David Toms and LPGA player Nancy Scranton are both ambassadors for Humana.^{[citation needed]}

The Humana Distaff Handicap is a Grade 1 race for thoroughbred fillies and mares, four-years-old and up. The race is run each spring on Kentucky Derby day at Churchill Downs and set at a distance of 7 furlongs for a purse of $250,000.^{[citation needed]}

Humana is a founding sponsor of eons.com, the online social networking site developed by Monster.com founder Jeff Taylor that's targeted to the 50+ market segment.

[edit] Humana Military Healthcare Services

Humana Military Healthcare Services (HMHS) is a wholly owned subsidiary of Humana. Since 2004, HMHS has acted as the Managed Care Support Contractor for the United States Department of Defense Military Health System TRICARE South Region. HMHS has provided managed care support services to the DoD since 1996.^[3]

[edit] Controversy

In 1987, Humana sued NBC over a story line in the television medical drama St. Elsewhere whereas the hospital was to be sold to a for-profit medical corporation and renamed "Ecumena", with subsequent changes to the hospital, both positive and negative, emanating from that change. Humana was successful at forcing NBC into showing a disclaimer at the beginning of the September 30 episode saying that the drama had no connection whatsoever with Humana.^[4]

On May 30, 1996, Linda Peeno, who was contracted to work for Humana for nine months, testified before Congress as to the downside of managed care.^[5]

“

I wish to begin by making a public confession: In the spring of 1987, as a physician, I caused the death of a man. Although this was known to many people, I have not been taken before any court of law or called to account for this in any professional or public forum. In fact, just the opposite occurred: I was "rewarded" for this. It bought me an improved reputation in my job, and contributed to my advancement afterwards. Not only did I demonstrate I could indeed do what was expected of me, I exemplified the "good" company doctor: I saved a half million dollars.

”

“

I contend that "managed care," as we currently know it, is inherently unethical in its organization and operation. Furthermore, I maintain that we have an industry which can exist only through flagrant ethical violations against individuals and the public.

”

On the June 21, 2007 episode of Amy Goodman's Democracy Now! radio/television program, Peeno further claimed that "just within a day or so [of the refusal of the heart transplant, I] saw a sculpture being installed in the rotunda [of Humana's headquarters] and was told at that time that it had cost about the same as the heart transplant that we had denied...By the way, I later found out that that sculpture cost $3.8 million, so it was equivalent to eight heart transplants."^[6]

Video of Linda Peeno's testimony appeared in Michael Moore's 2007 documentary Sicko. On June 28, 2007, in a statement about the movie, Humana declared that Peeno was never a Humana "associate" (permanent, full-time employee), but rather a "part-time contractor". Humana also disputed the portions of Congressional testimony that were shown by saying that because the patient's specific healthcare plan didn't cover heart transplants, the denial of coverage was valid.^[7]

Humana was also featured in Season One of Moore's The Awful Truth, shown refusing to give a pancreatic failure sufferer authorization for a transplant due to a contradictory policy that stated that all of this man's diabetes related expenses were covered by his plan (his pancreas was failing due to his diabetes) but in another section, it said that it wouldn't cover organ transplants. Moore conducted a fake funeral on the front steps of Humana for the man who was sure to die without the transplant. Three days later, Humana changed their policy and authorized the man's treatment. This scene was the inspiration for Sicko.

[edit] References

[edit] External links

• Official website