Humana 2011 Annual Report Download - page 26

Competition
The health benefits industry is highly competitive. Our competitors vary by local market and include other
managed care companies, national insurance companies, and other HMOs and PPOs, including HMOs and PPOs
owned by Blue Cross/Blue Shield plans. Many of our competitors have larger memberships and/or greater
financial resources than our health plans in the markets in which we compete. Our ability to sell our products and
to retain customers may be influenced by such factors as those described in the section entitled “Risk Factors” in
this 2011 Form 10-K.
Government Regulation
Diverse legislative and regulatory initiatives at both the federal and state levels continue to affect aspects of
the nation’s health care system.
Our management works proactively to ensure compliance with all governmental laws and regulations
affecting our business. We are unable to predict how existing federal or state laws and regulations may be
changed or interpreted, what additional laws or regulations affecting our businesses may be enacted or proposed,
when and which of the proposed laws will be adopted or what effect any such new laws and regulations will have
on our results of operations, financial position, or cash flows.
For a description of certain material current activities in the federal and state legislative areas, see the
section entitled “Risk Factors” in this 2011 Form 10-K.
Other
Captive Insurance Company
We bear general business risks associated with operating our Company such as professional and general
liability, employee workers’ compensation, and officer and director errors and omissions risks. Professional and
general liability risks may include, for example, medical malpractice claims and disputes with members
regarding benefit coverage. We retain certain of these risks through our wholly-owned, captive insurance
subsidiary. We reduce exposure to these risks by insuring levels of coverage for losses in excess of our retained
limits with a number of third-party insurance companies. We remain liable in the event these insurance
companies are unable to pay their portion of the losses.
Centralized Management Services
We provide centralized management services to each of our health plans and to our business segments from
our headquarters and service centers. These services include management information systems, product
development and administration, finance, human resources, accounting, law, public relations, marketing,
insurance, purchasing, risk management, internal audit, actuarial, underwriting, claims processing, and customer
service.
Employees
As of December 31, 2011, we had approximately 40,000 employees, including approximately 2,050 medical
professionals working under management agreements between Concentra and affiliated physician-owned
associations. We believe we have good relations with our employees and have not experienced any work
stoppages.
16