Humana, one of the nation’s largest providers of privatized Medicare Advantage health insurance for older adults, announced plans to divest its minority stake in a provider of end-of-life services for $900 million.
Humana Wednesday said it has signed 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 said the company “intends to utilize proceeds from the sale for general corporate purposes.” The deal is expected to close in the third quarter of this year subject to various regulatory approvals.
Humana said the divestiture of Gentiva continues a process it began several years ago even before Jim Rechtin took over as chief executive of the insurer to sell off various “non-core” Kindred At Home businesses “including hospice, palliative, and personal health care services.
“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,” Humana said in a statement. “These divisions were then subsequently restructured into a standalone business and rebranded to Gentiva, which is now the nation’s largest end-of-life care provider, with thousands of compassionate clinicians and caregivers providing services at more than 430 locations in 35 states.”
Though Humana is best known for its health insurance business, covering more than 6 million older adults in its Medicare Advantage plans, the company is investing heavily under Rechtin in its CenterWell healthcare services business that includes pharmacy, specialty pharmacy and related distribution. CenterWell contributed more than $22 billion in revenue to Humana’s total sales last year of $129.6 billion, according to the insurer’s most recent financial report.
Under Rechtin, the CenterWell business has been more focused on higher growth areas including specialty pharmacy and pharmacy. Earlier this year, for example, Mark Cuban’s Cost Plus Drug Company and Humana’s CenterWell Pharmacy confirmed they have formed a partnership “to develop new end-to-end employer prescription solutions.”