InHumana
Bad reviews matter, and this health care insurer is paying a hefty price for ignoring them
Two words from an online review of a Humana: “Shit network!”
This isn’t a unique assessment of the Louisville, Ky,-based health insurer, which primarily sells Medicare Advantage plans, a privatized iteration of the federal program for seniors and the disabled.
One-star reviews of Humana abound on sites such as Yelp! and WalletHub:
“If I could [post] a zero I would. What a rip off. They didn't cover any of my ambulance Costs or have they covered any of my hospital costs.”
“One can not endure how terrible this company is for providers and patients alike. Don't be swindled.”
“I’ve been hung up on and given the runaround. Their portal software is also awful!”
“Complete lack of care for people on Medicare. High prices and terrible customer service.
“Worst health insurance on the face of the earth. They approve nothing, all while you suffer. They treat people horribly. Even my doctor hates them.”
Many companies ignore reviews like these with impunity, chalking them up to ingrates, malcontents and whiners. They do this at their own peril.
Humana, which bills the federal government for most of its revenues, does not have this luxury.
The company confirmed rumors last week that its largest Medicare Advantage plan is about to take a hit in its ratings from the Centers for Medicare and Medicaid Services. The news sent its stock down to its lowest level since 2017. And year-to-date, shares are down more than 47%.
CMS rates Medicare Advantage plans with one to five stars based on their quality of medical care, member experience, and plan administration. The drop from 4.5 to perhaps 3.5 stars could mean $3 billion or more in lost annual revenue, according to some analyst estimates.
Humana says it’s appealing CMS’ decision. But for now it's getting what it has routinely doled out to its plan members: Cold-blooded bureaucracy.
The DOC Industry
Humana is but one player in a slew of companies with perverse economic incentives to keep patients far away from their doctors. I call it the DOC industry, the acronym standing for Denial Of Care, and not doctors.
The rate of denials rose 23% from 2016 to 2020, research shows. And newer research shows they have continued to soar from there.
Despite staggering progress in data technology during this period, insurers blame a lack of accurate information for the rise in denials.
Patients, however, report that the corporate bureacrats answering the phones at insurance providers often think they’re smarter than the doctors, like this online review of Humana:
“I called to find out why we received a denial of coverage for my mom’s heart surgery. She essentially told me that my mom does not need the surgery (that the doctor recommended due to severe heart failure.)”
Taking care of business, not patients
The more they charge and the less they pay, the more profits health care insurers and their executives keep for themselves.
Humana’s last CEO, Bruce Broussard, bagged $16.3 million in compensation last year, and this is the largesse that followed a shoddy financial and operational performance. He stepped down in July.
Health care insurance premiums, meanwhile have been rising faster than the inflation rate for decades.
From 2005 to 2022, premiums rose almost 80% while the Consumer Price Index jumped roughly 68% during that time, according to the Bureau of Labor Statistics.
We’re paying a lot more for a lot less, though none dare call it “shrinkflation.” That’s for cereal boxes and pop bottles – nothing you might actually need to keep living.
What did they think would happen?
Apparently, no one saw the hit to Humana’s star power coming.
“The scale of the drop is a shock,” Sarah James, an analyst at Cantor Fitzgerald, told The Wall Street Journal.
Perhaps she didn’t read the customer reviews Humana was getting online.
UBS analysts said the downgrade would be the "worse case scenario for stars,” Business Insider reports.
At Bank of America, analysts say it could take longer than expected for Humana to recover, especially if Democrats win big in November.
Analysts also worry that other Medicare Advantage plans could lose stars.
“We were surprised by the sharp decline in stars ratings,” writes BTIG analyst David Larsen (cited in this Bloomberg story.) “We worry that if Humana saw such a large decline in ratings, and bonus payments, other payers may face even more pressure.”
Humana executives are scrambling to calm the shitstorm of analyst downgrades and plunging share prices.
They’ve been telling analysts that the company “was one metric away from getting four stars,” according to a newsletter report from Stat health care reporter Bob Herman.
Yeah, and mom was just one more heart attack away from getting her surgery approved.
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Wow, this was an eye-opener. I had no idea the Medicare Advantage plans were rated this way. Great info! Thank you.