... Permanente has stood as a leader in the both Health, plans and Hospitals for year doing the business in integrated manner. This led me to analyze of some other possible reason for the problem. But as I see from the case, "60% of all U.S hospitals operated at a loss on their Medicare patients, meanwhile the aging population meant that Medicare patient-days had come to represent an increasing share of hospitals' total patient days. To make a profit, hospital had to charge higher rates on their insured patients in order to recoup losses on their uninsured and Medicare/Medicaid patients"(Stuart, P.g. 5). Further, there was some bad media coverage on Humana Hospital over charging its patients and Humana's disputes with doctors. HMO plans were rapidly growing industry and the management decision to spin off Humana Inc, as the company was not receiving appropriate market share price on its share. Spinning off ...

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