Restructuring / Turnaround Strategies Case Study

Humana Inc: Turnaround of a Health Insurer

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Abstract:
Louisville-based health management company, Humana Inc., ran into difficult circumstances in the late-1990s due to the rising health care costs of its employees in the US. The troubles were further aggravated as various class action lawsuits were filed against it on the grounds that the company had misrepresented its health care plans to its customers. The arrival of the new CEO, Michael P. McCallister, marked a turnaround for Humana and earnings increased significantly in 2003. Humana chose a consumer-centric approach and a strong IT infrastructure as the two growth drivers to ensure its success in commercial and government business segments.

Pedagogical Objectives:

• To discuss the different strategies adopted by Humana to become the leading health services company in the competitive US market.

Keywords : Humana; Health Maintenance Organisations (HMO) in the US; Rising health costs in the US; SmartSuite; Restructuring / Turnaround Strategies Case Study;Personal nurse; TRICARE; HumanaCoverage-First PPO; Health care plans; Medicare advantage; Smart Assurance; A competitive landscape of the US HMO market; Potential of health insurance business in the US; Difference between nursing homes and hospitals; Growth of the HMO industry in the US; Lawsuit allegation against Humana