Humana To Divest End-Of-Life Care Business For $900 Million
Humana, a prominent provider of privatized Medicare Advantage health insurance for older adults, has recently announced its decision to divest its minority stake in Gentiva, a leading provider of end-of-life services, for $900 million. The company has entered into a definitive agreement with a consortium of investors to sell off all or substantially all of its minority interest in Gentiva, which offers hospice and palliative care services.
The proceeds from the sale of Gentiva will be utilized by Humana for general corporate purposes. The transaction is expected to be finalized in the third quarter of this year, pending regulatory approvals. This move is part of Humana’s ongoing strategy to divest non-core businesses, including hospice, palliative, and personal health care services.
This divestiture of Gentiva follows a similar process initiated by Humana a few years ago, even before Jim Rechtin assumed the role of CEO. The company had previously divested a majority interest in the Hospice and Personal Care divisions of its Kindred at Home subsidiary to private investment firm Clayton, Dubilier & Rice. These divisions were subsequently restructured and rebranded as Gentiva, establishing it as the nation’s largest end-of-life care provider.
While Humana is widely recognized for its health insurance offerings, covering over 6 million older adults through its Medicare Advantage plans, the company is also investing significantly in its CenterWell healthcare services business under Rechtin’s leadership. CenterWell, which encompasses pharmacy, specialty pharmacy, and related distribution services, contributed more than $22 billion in revenue to Humana’s total sales of $129.6 billion last year.
Under Rechtin’s guidance, the CenterWell business has been strategically focused on high-growth areas such as specialty pharmacy and pharmacy services. Earlier this year, Humana’s CenterWell Pharmacy collaborated with Mark Cuban’s Cost Plus Drug Company to develop innovative end-to-end employer prescription solutions.
Overall, Humana’s decision to divest its minority stake in Gentiva reflects its commitment to optimizing its portfolio and focusing on core business areas with strong growth potential. This move aligns with the company’s broader strategy to enhance its healthcare services offerings and drive value for its stakeholders.
