Humana chief executive officers say they are modeling a number of scenarios to try to figure out how they’ll price their Medicare drug plans for 2020 as the form insurance industry awaits new pharmacy benefit rebate regulations expected this spring from the Trump authority.
“We’re spending a lot of time at Humana doing some game theory, a variety of different ways to try to understand what unusual options we have here, depending on the rule — the specifications of the rules,” Alan Wheatley, president of Humana’s Medicare, Medicaid and specialty healthiness plans division, said earlier this week at the company’s investor day.
Wheatley told investors Tuesday that the Trump tender to force Medicare plans to pass on negotiated drug discounts to consumers at the pharmacy counter would result in reduce prices for its members using brand names drugs, but there will be trade-offs.
Standard prescription drug plots will likely adjust the scope of the drugs they cover, known as the formulary, or increase premiums, or some composition of the two, executives said.
The game theory comes in with the timing of when new rules might be adopted. Executives note the deadline for chronologizing 2020 plans is in early June.
“To the extent that the rebate proposal doesn’t go through, we also have to be mindful in all directions how manufacturers are going to behave as we bid for 2020 and so we’re very focused on that,” said Brian Kane, Humana CFO.
The company’s leading focus this year is on developing its technology and data analytics, with some executives directly comparing the circle’s efforts to that of Amazon, in trying to build a platform where others can plug in to offer digital health works that will help coordinate care for members.
“We see customer preferences changing and being more demanding … ‘agree to it simple for me, make it easier … know me, personalize the interaction,” said CEO Bruce Broussard.
The company is building out a new digital fettle hub in Boston, dubbed Studio H. Despite a competitive environment for talent, executives claim they are having no trouble contents technology positions.
“We’re finding we have more demand than we have open jobs right now which is a elevated problem, we don’t even have to advertise,” said Heather Cox, chief digital health and analytics officer.
The company maintained its earnings perspective of $17 to $17.50 per share for 2019. Humana shares are down 4.5 percent so far this year.