Humana Corporation's Growth in Private Enterprise and Welfare Care

Humana Inc. was founded in 1961 in Louisville,2003 Oschner Health Plan Louisiana
Kentucky by David Jones and Wendell Cherry as a2005 CarePlus Health Florida
nursing home company. The decision to start the2005 Corphealth Behavioral Healthcare Texas
business came in a rather unusual situation. It was2006 CHA Health Kentucky
whilst both men were playing a game of golf in2007 Compbenefits Georgia
Louisville. Each of them put up $1,000 as their initial2007 KMG Minnesota
investment. The company soon became the largestOver 46 years since its foundation by those two golf
nursing home company in the United States.players, Humana is now the Official Health Benefits
Learning that more profits could be made in runningProvider of the PGA Tour and Champions Tour. PGA
hospitals they divested from the nursing home chainTour player David Toms and LPGA player Nancy
and moved into purchasing hospitals in 1971. ToScranton are both ambassadors for Humana. With a
reflect the company's new direction, the name wascustomer base of over 11.5 million in the United
changed from Extendicare to Humana Inc. in 1974.States the company is now the largest Fortune 500
Humana experienced tremendous growth organically.inCompany. Headquartered in Louisville in the
the years that followed. Its takeover of AmericanCommonwealth of Kentucky, it has generated a
Medicorp Inc. in 1978 doubled the company's size.market capital of over $10 billion and $21.4 billion
During the mid-1970s, a fast-track constructiondollars in revenue. Humana employs over 22,500
process enabled the completion and opening of one"associates" nationwide. It markets its health benefit
hospital a month. This accelerated constructionconsumer services all over the US and has
schedule compressed time by overlapping processesinternational business interests in Western Europe. In
thus allowing the development of hospital projectsits March 2007 issue, Fortune Magazine named
incredibly faster. Humana then moved into developingHumana one of the Top 5 Most Admired Healthcare
the double corridor model for hospital constructionCompanies in the United States.
which minimized the distance between patients andThe picture of Humana making business out of health
nurses by placing nursing support services in thecare and medicine has not been all rosy. There have
interior of the building with patient rooms surroundingbeen widespread opposition to this commercialisation
the perimeter.of what they think should be a social service as
Humana in time became the world's largest hospitalunethical. This has even often degenerated into legal
company in the 1980s. As the American health caretussles.
system evolved in the 1980s, Humana developed anIn 1987, Humana sued NBC over a story line in the
integrated health care delivery system by creating atelevision medical drama St. Elsewhere where the
family of flexible health care plans, tying up the healthhospital was to be sold to a for-profit medical
care service with a health insurance plan thus enablingcorporation and renamed "Ecumena", with subsequent
them to begin marketing health insurance in 1984. .changes to the hospital, both positive and negative,
Humana brought the pioneering artificial heartemanating from that change. Humana forced NBC
research of Dr. Robert Jarvik and Dr. William DeVriesinto showing a disclaimer at the beginning of the
to Louisville under the newly-created Humana HeartSeptember 30 episode saying that the drama had no
Institute in 1985. Just in 1982 Clark, a 61-year-oldconnection whatsoever with Humana. A news report
retired dentist from Des Moines, Washington, becameon that states:
the first human to receive a permanently implantedA federal court in Paducah, Ky... ruled that NBC issue
artificial heart at the hands of surgeon Williama disclaimer before last night's episode of "St.
DeVries. For DeVries, then 38, that satisfyingElsewhere" explaining that the hospital drama has no
moment was the culmination of the three years herelationship with Humana Inc., the for-profit hospital
had spent perfecting the technique that made thechain noted for its work on the artificial heart.
implant possible, and waiting for a patient who metAccording to this season's story line, fictional St.
the rigorous criteria established for implant candidatesElsewhere has been sold to a for-profit medical
by the Food and Drug Administration. For DeVries thecorporation that has renamed the hospital "Ecumena."
7½-hr. operation was "almost a spiritualThe new owners have made improvements to the
experience. So acquiring such a man together with hisshabby inner-city Boston hospital, but the corporation
collaborator was to bring much invention and lifeis also not as compassionate toward the poor and
prolongation at the center of Humana.uninsured as ...
In the 1990s Humana metamorphosed into aOn May 30, 1996, Linda Peeno, who was a contract
consumer health benefits company. Humana spun-offworker for Humana for nine months, testified before
its hospital operations from the health insuranceCongress as to the demerits of managed care.
operations in 1993 and created the new companyShe began by making a public confession:
Galen Health Care Inc. Soon after, Galen merged withIn the spring of 1987, as a physician, I caused the
Columbia/HCA. After United Healthcare's faileddeath of a man. Although this was known to many
attempt to acquire Humana in 1998, Humana beganpeople, I have not been taken before any court of
pioneering work in consumer driven health care inlaw or called to account for this in any professional or
1999; launching its first services on September 11,public forum. In fact, just the opposite occurred: I
2001.The marketing and administering of healthwas "rewarded" for this. It bought me an improved
benefit consumer services. became a very profitablereputation in my job, and contributed to my
area of Humana's engagement run principally from itsadvancement afterwards. Not only did I demonstrate
headquarters at the Humana building.I could indeed do what was expected of me, I
Through a partnership with Navigy, Inc., a subsidiaryexemplified the "good" company doctor: I saved a
of Blue Cross and Blue Shield of Florida, Inc., in 2001,half million dollars..
Humana launched Availity to empower physicians andI contend that "managed care," as we currently
other health care professionals with a businessknow it, is inherently unethical in its organization and
solution to conduct their daily health plan transactions.operation. Furthermore, I maintain that we have an
Humana began marketing health savings accountindustry which can exist only through flagrant ethical
services to individuals and companies in 2003. Theviolations against individuals and the public
Business Health Care Group of Southeast WisconsinOn the June 21, 2007 episode of Amy Goodman's
chose Humana as its administrative partner to driveDemocracy Now! radio/television program, Peeno
Southeastern Wisconsin health care costs to thefurther claimed that "just within a day or so of the
Midwest average in 2005, through consumerrefusal of the heart transplant, "I saw a sculpture
education largely, providing cost and qualitybeing installed in the rotunda of Humana's
information on health care providers, structuringheadquarters and was told ... that it had cost about
accountability of all stakeholders and collectivethe same as the heart transplant that we had
purchasing. Today, this Group represents more thandenied... I later found out that that sculpture cost $3.8
200 member companies, including large and smallmillion, ... equivalent to eight heart transplants."
employers representing more than 150,000 healthA video of Linda Peeno's testimony appeared in
care consumers in Southeastern Wisconsin.Michael Moore's 2007 documentary Sicko. In a
Upon passage of the Medicare Prescription Drug,statement about the movie, Humana declared that
Improvement, and Modernization Act in the U. S.Peeno was never a Humana associate, but rather a
Congress, Humana launched an aggressive education"part-time contractor". Humana also disputed the
campaign to market Medicare Advantage andportions of Congressional testimony that were
Prescription Drug Plans nationwide to Medicare eligibleshown by saying that because the patient's specific
consumers in 2006. Through a cross country RV tourhealthcare plan didn't cover heart transplants, the
and strategic alliance with medicare distributiondenial of coverage was valid.
concerns such as Wal-Mart, approximately 5 millionHumana was also featured in Season One of Moore's
consumers got signed catapulting Humana to #2 inThe Awful Truth, shown refusing to give a
industry market share for senior products. Humanapancreatic failure sufferer authorization for a
also launched Right Source, a national mail-order retailtransplant due to a contradictory policy that stated
pharmacy business in 2006.that all of this man's diabetes related expenses were
The list below shows some of the major acquisitionscovered by his plan (his pancreas was failing due to
by Humana since 1990 in the U.S.A::his diabetes) but in another section, it said that it
1990 Michael Reese Health Plan Illinoiswouldn't cover organ transplants. Moore conducted a
1995 The Dental Concern Illinoisfake funeral on the front steps of Humana for the
1995 Carrington Illinoisman who was sure to die without the transplant.
1996 Employers Health Insurance (EHI) WisconsinThree days later, Humana changed their policy and
1997 Physicians Corp of America (PCA) Texasauthorized the man's treatment. This scene was the
1997 ChoiceCare Ohioinspiration for Sicko.
2000 Memorial Sisters of Charity Texas