CenterWell's Sanjay Shetty on Humana's primary care gamble

Wall Street has been nervous about Humana amid an onslaught of challenges to its health insurance business, but the company’s CenterWell healthcare services division is showing promise.

Humana's heavy exposure to the recently turbulent Medicare Advantage market has put it in a difficult financial position. Yet its growing CenterWell subsidiary is helping buoy the company even as Walgreens and Walmart downsize or shutter their primary care operations.

Related: Why big retailers are hitting roadblocks in senior care

Humana's trajectory is reminiscent of how UnitedHealth Group built out its Optum subsidiary and how Cigna created its Evernorth Health Services subsidiary.

Last year, income from CenterWell operations jumped 8.8% to $1.4 billion as revenues rose 6.4% to $18.4 billion. This year, the subsidiary has generated more than $14.8 billion in revenue through the third quarter, up 8.1%.

Headwinds hitting competitors, including high operating costs and obstacles to reimbursement, aren’t deterring CenterWell from charting more growth, said Dr. Sanjay Shetty, who oversees Humana’s primary care, home health and pharmacy segments as the subsidiary's president since April 2023.

In an interview, Shetty outlined what differentiates CenterWell from its rivals and how other companies’ troubles could create opportunities for Humana.

This interview has been edited for length and clarity.

What do you expect from CenterWell's primary care initiatives?

Right now, the CenterWell Senior Primary Care footprint is around 300 centers, and we are projecting to have around 335 to 340 centers open nationwide by end of year. We continue on our pace of growth through de novo builds as well as [mergers and acquisitions], but some things can always get delayed.

We may expect to see that number drop a bit in the beginning of 2025 as we continue to think through consolidations of centers. But we continue to have this aspiration to grow the model, both in existing markets as well as into new markets.

CenterWell is expanding while others pull back. What has your company figured out?

The CenterWell Senior Primary Care model focuses on one core tenet: We want to be available for our patients to deliver care that improves experience, quality and outcomes. That's what makes our model special.

We've leaned into value-based care, and we're not as dependent on what you might see in a traditional fee-for-service practice, which is a very high volume of very short visits. That model doesn't work as well for seniors. There's a large number of seniors who have chronic conditions. What they need is time and attention and a focus on long-term, longitudinal management. That's what we're bringing into the centers.

We probably have some opportunity as we look across the ecosystem. ... Maybe others will struggle, and maybe others could be potential for us to join to the CenterWell model.

CenterWell is moving into shuttered Walmart Health clinics. Why can your company do better?

I wouldn't want to comment on how Walmart ran the clinics. I will say they built beautiful clinics, and they look like they were built for CenterWell. They're in communities we wanted to be in and weren't already in. They’re well-suited to caring for seniors. Each has a dedicated entrance and its own parking spots.

The value-based care paradigm and the reimbursement model associated with it makes the care model sustainable. It makes our investment in a fully integrated care team sustainable, and it allows us to focus on delivering experience, quality and outcomes for our patients.

Our expectations are different. We expect to have a longitudinal relationship with a smaller group of seniors. We’re a lot less susceptible to foot traffic or other things a retailer might be thinking about when it comes to primary care because our focus is completely on our care model and delivering for seniors.

Is your goal for CenterWell to be the next Optum or Evernorth?

Our competitors have their own strategies. Our focus is on integrated senior health, and I would argue that CenterWell has done some amazing things when it comes to thinking not just about owning separate care delivery organizations but thinking about how those care delivery organizations can come together to deliver on a differentiated experience.

How do you recruit clinicians amid staffing shortages, particularly in geriatrics?

There certainly is a shortage of providers nationally who can serve these needs, both in the clinic and in the home. We know there's only one geriatrician for every 10,000 seniors. This is a huge need that we as a society must get our heads around.

We've created a clinical model that is very appealing to clinicians. Typically, in a fee-for-service visit, you might get 15 minutes. But when you have 40 minutes on average per visit, it allows you to go beyond the acute issue.

There are few other places where you can say: You're going to have time to spend with your patients, you're going to have all the support you need to deliver that care and you can really focus on doing what it is you love, which is taking care of the patient.

What’s your top priority for CenterWell next year?

We're looking ahead to 2025 as a year of continued growth for all the businesses. We will continue to lean into ways the various businesses can collaborate.

I describe this to other audiences as basically as close as you can get to concierge medicine without the fee. I want more patients to recognize what that could represent for them and their health as they think about how they can continue to do what all seniors want: Be independent, live at home and stay healthy.