What’s Behind Humana’s Expanding Investments in Senior-Focused Clinics?

If you continue building, will they still come? In a nutshell, that’s what some analysts wanted Humana Inc. President and CEO Bruce Broussard to answer on a recent earnings call regarding his company’s $600 million joint venture with private equity firm Welsh, Carson, Anderson & Stowe to help finance building 50 more Humana Partners in Primary Care clinics over the next three years.

The new primary care clinics, which will cater to Medicaid patients, will further add to Humana’s presence in the health care market. Humana now operates 262 clinics directly or indirectly through joint ventures and partnerships — and serves about 250,000 Medicare Advantage patients through these facilities, MedCity News reports.

Broussard says this care model has been effective with patients and physicians for some time and that there remains an opportunity to serve seniors better with these types of facilities. He acknowledges that these clinics lose money in the first few years but earn a solid return on investment over time. Humana expects to see a benefit from the clinics early on from the insurance side of its business, as more members shift to value-based care. To up its chances for success, Humana looks to place the new clinics in communities that don’t have primary care or a hospital nearby.