Attracted by Risk-Bearing Capabilities, Humana Acquiring Provider-Convener onehome

Humana Inc. (NYSE: HUM) announced Monday that it has entered into an agreement to acquire onehome, a home-focused, post-acute care company.

The acquisition brings the Louisville, Kentucky-based Humana closer to its goal of being one of the premier home-based care providers in the country, its executives believe.

Officially dubbed “One HomeCare Solutions,” the Miramar, Florida-based onehome was formerly backed by WayPoint Capital Partners. The company is a mix between a convener and a provider, operating under a full-risk model.

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Over the past three years, Humana has strategically built out a diverse at-home care network that includes a wide range of capabilities. In addition to onehome, for example, Humana recently revealed it’s acquiring the remaining stake in Kindred at Home.

Humana originally acquired 40% of Kindred at Home in 2018 with two private equity firms. In April, Humana said it is acquiring the remaining 60% for a reported enterprise value of $8.1 billion, which included Humana’s existing equity value of $2.4 billion.

“We’ve been historically saying that we believe that many members want to receive services in the home and that we see the home as a lower-cost environment,” Kirk Allen, Humana’s senior VP of home care, told Home Health Care News. “We also see technology moving in a direction that better supports people to have their services provided in the home. I think we’ve been vocal about that being a big part of our strategy going forward.”

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Financial terms of the onehome deal were not disclosed.

Somewhat under the radar, onehome stretched closer to the national spotlight when it was acquired by WayPoint at the end of 2018. Now, it’s large enough to be attractive to a behemoth organization like Humana.

Beyond Kindred at Home, Humana’s in-home care capabilities include partnerships with in-home medical care company DispatchHealth and the senior companionship company Papa. It also made a $100 million investment in the in-home primary care provider Heal last year.

“We continue to invest in assets that allow Humana to better manage the holistic needs of our members and patients by expanding care in the home, including primary care, telehealth and emergency room care, while also addressing social determinants of health,” Humana President and CEO Bruce Broussard said in April. “We’ve learned a great deal about the home health space and recognize the significant value we can deliver to members and patients by integrating this asset into our holistic approach to care.”

Humana’s eventual plan is to integrate Kindred at Home and other acquired entities like onehome into its payer-agnostic health care services brand “CenterWell,” which will include “CenterWell Home Health.”

“[This] complements our recent announcement to fully acquire and integrate Kindred at Home, and brings together additional capabilities that will allow Humana to deliver value-based home health at a national scale,” Susan Diamond, president of Humana’s home business segment and its interim CFO, said in a statement. “By combining onehome’s value-based approach with Kindred’s home health services and Humana’s analytical capabilities and clinical expertise, we believe we can create a transformational value-based offering to serve more people, including non-Humana plan members, nationwide.”

For onehome, branding is still up in the air, but it’s likely that it will also eventually fall under the CenterWell umbrella.

After the acquisition is completed, Humana and onehome will work to integrate — and expand — onehome’s network, Humana said.

Becoming an acquisition target

Led by Dr. Joseph Mayer, onehome has seen steady growth since its formation in 2013.

“They’ve sort of really gone through an iterative process,” Allen said. “And what we liked about the model, most especially, was the patient/member experience that it created by delivering home health infusion and DME services in a really coordinated manner.”

onehome’s model manages a range of post-acute needs. The services it provides to address those needs include infusion care, nursing, occupational therapy, physical therapy and durable medical equipment (DME) services, among others.

In April, onehome announced that it would be making a sizable expansion push with the help of Medicare Advantage (MA) insurer Devoted Health. Specifically, that push would lead to onehome both coordinating and providing home health services in Arizona, Ohio and Texas.

The company delivers home-based care through its vertically integrated provider portfolio. But its uniqueness comes from its hybrid provider-convener makeup.

That was also an attractive quality from Humana’s perspective.

“We like the idea that they really understand and have capabilities around taking risk-based contracting,” Allen said. “And they have some models in places like Florida that they’ve worked under for several years to hone those skills. That — in combination with the good outcomes they achieve through delivering the services in a really holistic way — was very attractive to us.”

On the convener side, onehome partners with payers via full-risk capitation agreements for skilled home health care, DME and home infusion services.

Put simply, onehome’s model fits well with what Humana is trying to do.

“At Humana, we are implementing a strategy to build a new value-based home health model that will improve patient outcomes, increase satisfaction for patients and providers, and provide greater value for health plan partners,” Diamond said. “The acquisition of onehome is a key component of that strategy.”

With the Kindred acquisition, Humana will take charge of a network that includes locations in 40 states and around 43,000 caregivers. That makes Kindred the largest home health provider in the country, according to LexisNexis data.

Having a robust provider network to deliver care is the first half of the battle. Coordinating that care with the right approach is the other half.

And onehome can help with that, Allen said.

“We provide north of 500,000 home health episodes per year,” he said. “You think about Kindred’s footprint and its skilled workforce, and how effective they are in serving members and clients across that footprint. And also the fact that that footprint overlaps [significantly] with Humana membership. Then you think about these capabilities of being able to provide services under risk-bearing agreements in this very clinically coordinated manner, and we see a great opportunity in the combination of those.”