Humana

Humana Inc. (nyse: HUM), founded in 1961 in Louisville, Kentucky, is a Fortune 500 company that markets and administers health benefit consumer services. With a customer base of over 11.5 million in the United States, the company is the largest Fortune 500 company headquartered in the Commonwealth of Kentucky, with a market cap of over $13 billion dollars and $21.4 billion in revenue. Humana employs over 25,000 "associates" nationwide. Humana markets its health benefit consumer services in all 50 states, D.C., Puerto Rico and has international business interests in Western Europe. In its March 2007 issue, Fortune Magazine named Humana one of the Top 5 Most Admired Healthcare Companies in the United States.

History
The company was founded by David Jones and Wendell Cherry as a nursing home company in 1961. Then known as Extendicare, the company became the largest nursing home company in the United States. Extendicare later divested the nursing home chain and moved into purchasing hospitals in 1972, becoming the world's largest hospital company in the 1980s.

To reflect the company's new direction, the corporate name was changed to Humana Inc. in 1974. Humana experienced tremendous growth in the years that followed, both organically and through the takeover of American Medicorp Inc. in 1978, which doubled the company's size. During the mid-1970s, the company used a fast-track construction process to complete and open one hospital a month. This accelerated construction schedule, which compressed time by overlapping processes, allowed Humana to develop hospital projects faster than the industry norm. During that construction boom, Humana developed the double corridor model for hospital construction. This highly efficient design minimized the distance between patients and nurses by placing nursing support services in the interior of the building with patient rooms surrounding the perimeter.

As the American health care system evolved in the 1980s, Humana developed an integrated health care delivery system by creating a family of flexible health care plans. In 1984, Humana began marketing health insurance.

Humana brought the pioneering artificial heart research of Dr. Robert Jarvik and Dr. William DeVries to Louisville, creating the Humana Heart Institute in 1985.

The 1990s marked Humana's metamorphis into a consumer health benefits company. Humana spun-off its hospital operations from the health insurance operations in 1993. The new company was called Galen Health Care Inc. Soon after, Galen merged with Columbia/HCA. United Healthcare attempted to acquire Humana in the Spring of 1998. United's effort failed when it reported an almost billion dollar quarterly loss. Humana began pioneering work in consumer driven health care in 1999; launching its first services on September 11, 2001.

In 2001, Humana partnered with Navigy, Inc., a subsidiary of Blue Cross and Blue Shield of Florida, Inc., to launch Availity to empower physicians and other health care professionals with a business solution to conduct their daily health plan transactions.

Humana began marketing health savings account services to individuals and companies in 2003 and entered into a business partnership with Richard Branson's Virgin in 2005. The Business Health Care Group of Southeast Wisconsin (BHCGSW) chose Humana as its administrative partner to drive Southeastern Wisconsin health care costs to the Midwest average in 2005, using a strategy that includes consumer education, providing cost and quality information on health care providers, structuring accountability of all stakeholders and collective purchasing. Today, the BHCGSW represents more than 200 member companies, including large and small employers representing more than 150,000 health care consumers in Southeastern Wisconsin.

Upon passage of the Medicare Prescription Drug, Improvement, and Modernization Act in the U. S. Congress, Humana aggressively launched an education campaign to market Medicare Advantage (MA) and Prescription Drug Plans (PDP) nationwide to Medicare eligible consumers in 2006. A cross country RV tour and strategic alliance with State Farm and Wal-Mart, the campaign signed up approximately 5 million consumers and catapulted Humana to #2 in industry market share for senior products. Humana also launched RightSource, a national mail-order retail pharmacy business in 2006.

Acquisitions
This is a list represents some of the major acquisitions completed by Humana since 1990 in the U.S.:

Locations
The Humana Building in Louisville, Kentucky is a well-known example of postmodern architecture; it was designed by Michael Graves and completed in 1985. Humana sponsored an architectural competition to determine the design of its headquarters building. Scale models of the participants (including the submissions of Helmut Jahn, IM Pei, Michael Graves and others) are contained in a vestibule located directly above the Main Street entrance of the Humana Building.

In addition to its corporate headquarters building in Louisville at 5th and Main Street, Humana owns and occupies the Waterside Building at 1st and Main, and the Riverview Square at 2nd and Main. Humana recently announced its plan to lease space in the Waterfront Plaza East Tower in the 300 block of Main Street. The company also leases space in three other downtown buildings—National City in the 400 block of Main Street, the 515 Building on Market Street, and the ISB Building on Magazine Street.

Humana recently undertook the historic preservation of a city block of several 19th Century buildings located beside its headquarters building. The company now employs more than 8,500 people in downtown Louisville.

The company is working with preservation experts to ensure that the historic integrity of the block is maintained.

Company leadership
Michael B. McCallister, a 33 year company veteran, is president and chief executive officer of Humana. McCallister began his career in 1974 as an analyst in the company's finance department. In 2006, he was rated as one of the most successful CEOs in American business at creating shareholder value by Forbes Magazine. McCallister is a member of the Business Roundtable.

David Jones, Jr. serves as chairman of the board of directors. Jones is the son of company founder, David Jones, Sr.

In an interview published by The Courier-Journal, the day following his retirement as chairman of the board of directors, David Jones, Sr. indicated he had vehemently opposed United Healthcare's effort to takeover Humana in 1998, but was out voted by other members of the board of directors.

The year the leader joined the company is listed in brackets.


 * Michael B. McCallister, President and Chief Executive Officer [1974]
 * James (Jim) E. Murray, Senior Vice President and Chief Operating Officer [1989]
 * James (Jim) H. Bloem, Senior Vice President, Chief Financial Officer and Treasurer [2001]
 * Bruce J. Goodman, Senior Vice President and Chief Service and Information Officer [1999]
 * Thomas (Tom) J. Liston, Senior Vice President, Strategy and Corporate Development [1997]
 * Steve Moya, Senior Vice President and Chief Marketing Officer [2000]
 * Bonita (Bonnie) C. Hathcock, Senior Vice President and Chief Human Resources Officer [1999]
 * Jonathan (Jack) T. Lord, M.D., Senior Vice President and Chief Innovation Officer [2000]
 * Arthur (Art) P. Hipwell, Senior Vice President and General Counsel [1979]
 * Heidi Margulis, Senior Vice President of Government Relations [1985]
 * Thomas (Tom) Noland, Senior Vice President of Corporate Communications [1985]
 * William (Bill) Tait, Vice President, Market Operations [2001]
 * Stefen Brueckner, Vice President, Senior Products [2001]
 * Steven (Steve) E. McCulley, Vice President and Controller, Principal Accounting Officer [1990]

Philanthropy
The Humana Foundation donates millions of dollars each year to non-profit organizations in the markets where the company does business.

The 2006 Humana Festival of New American Plays celebrated its 30th anniversary. Sponsored by The Humana Foundation, the Festival at Louisville’s Actors Theatre is an annual site of pilgrimage where theatre lovers from around the world converge to get the first look at the future of the American theater. Over 300 Humana Festival plays have been produced, representing the work of 206 playwrights. More than 90 million people worldwide have seen additional productions of the many plays originated in the Humana Festival, not including film audiences who have seen Humana plays adapted for the screen

The Humana Foundation donated $1 million dollars to the Gulf Coast region following Hurricane Katrina.

Controversy
In 1987, Humana sued NBC over a story line in the television medical drama St. Elsewhere whereas the hospital was to be sold to a for-profit medical corporation and renamed "Ecumena", with subsequent changes to the hospital, both positive and negative, emanating from that change. Humana was successful at forcing NBC into showing a disclaimer at the beginning of the September 30 episode saying that the drama had no connection whatsoever with Humana.

On May 30, 1996, Linda Peeno, who was contracted to work for Humana for nine months, testified before Congress as to the downside of managed care.

I wish to begin by making a public confession: In the spring of 1987, as a physician, I caused the death of a man.

Although this was known to many people, I have not been taken before any court of law or called to account for this in any professional or public forum. In fact, just the opposite occurred: I was "rewarded" for this. It bought me an improved reputation in my job, and contributed to my advancement afterwards. Not only did I demonstrate I could indeed do what was expected of me, I exemplified the "good" company doctor: I saved a half million dollars.

I contend that "managed care," as we currently know it, is inherently unethical in its organization and operation. Furthermore, I maintain that we have an industry which can exist only through flagrant ethical violations against individuals and the public.

On the June 21, 2007 episode of Amy Goodman's Democracy Now! radio/television program, Peeno further claimed that "just within a day or so [of the refusal of the heart transplant, I] saw a sculpture being installed in the rotunda [of Humana's headquarters] and was told at that time that it had cost about the same as the heart transplant that we had denied...By the way, I later found out that that sculpture cost $3.8 million, so it was equivalent to eight heart transplants."

Video of Linda Peeno's testimony appeared in Michael Moore's 2007 documentary Sicko. On June 28, 2007, in a statement about the movie, Humana declared that Peeno was never a Humana associate, but rather a "part-time contractor". Humana also disputed the portions of Congressional testimony that were shown by saying that because the patient's specific healthcare plan didn't cover heart transplants, the denial of coverage was valid.

Humana was also featured in Season One of Moore's The Awful Truth, shown refusing to give a pancreatic cancer sufferer authorization for a transplant. Moore conducted a fake funeral on the front steps of Humana for the man who was sure to die without the transplant. Three days later, Humana changed their policy and authorized the man's treatment. This scene was the inspiration for Sicko.

Trivia

 * Humana Military Health Care Services is a TRICARE Regional Contractor for the Southern United States.
 * David Jones and Wendell Cherry, the company founders, decided to start the business during a game of golf in Louisville. The founders each put up $1,000 as their initial investment. Over 46 years later, Humana is now the Official Health Benefits Provider of the PGA Tour and Champions Tour. PGA Tour player David Toms and LPGA player Nancy Scranton are both ambassadors for Humana.
 * Humana associates serve as an internal test market for the company's next generation of consumer services.
 * David Jones Sr., formerly CEO and chair of the board of directors is currently leading the City of Parks initiative in Louisville. This effort is designed to acquire land to expand parks throughout Louisville. He raised over $20 million for this effort in 2005 and 2006 through his personal fundraising efforts. In February 2005, the Trust for Public Land and Louisville Mayor Jerry Abramson announced a $20 million initiative spearheaded by the community fundraising efforts of Humana Co-founder and Chairman Emeritus David A. Jones. The funds will be used for continued land purchases that promise to make Metro Louisville a "City of Parks." The Humana Foundation contributed $1.25 million.
 * The Humana Distaff Handicap is a Grade 1 race for thoroughbred fillies and mares, four-years-old and up. The race is run each spring on Kentucky Derby Day at Churchill Downs and set at a distance of 7 furlongs for a purse of $250,000.
 * Michael McCallister, president and CEO, serves on the Board of Directors of National City Corp., parent company of National City Bank.
 * On September 11, 2001, approximately 23 Humana leaders were in New York City to launch the company's next generation health benefit consumer services at the Digital Sandbox. The group had dined the previous evening at the Windows on the World Restaurant atop the World Trade Center Tower One. The group safely escaped New York following the collapse of the World Trade Center buildings. The leaders wrote a book: Stories from 55 Broad Street; to tell the story of their experience.
 * Humana is a founding sponsor of eons.com, the online social networking site developed by Monster.com founder Jeff Taylor. The site targets the 50+ market segment.
 * Humana brought the 1942 classic Casablanca back to the big screen in select movie theatres nationwide as part of a campaign to preview its 2007 Medicare Advantage consumer services. The special screening events marked the first time in more than 60 years that the classic Humphrey Bogart epic was seen nationally in movie theatres.