What would happen to these firms if Humana were to merge with a bigger partner, such as Aetna?
When firms merge or are acquired, employees tend to feel the first ripple of consolidation. But those with whom they contract for services are often a close second. After all, does any company need two office suppliers? The same questions also apply to firms offering marketing, printing, legal and other services.
It’s difficult to calculate how much business Humana does with local vendors — the firm keeps its vendor list confidential, according to spokesman Tom Noland, who would only confirm the overall number of local contractors — but it’s safe to say Humana has vendor relationships across a large swath of the city.
Pip Pullen, president of web advertising firm Mightily, estimated Humana spends millions of dollars a year locally on its advertising and marketing work. He also said Humana’s core communications functions are in Louisville, and these would likely go away post-merger.
“While other less-exotic functions will stay here, where it’s cheaper than Connecticut (Aetna is headquartered in Hartford, Conn.), the sort of work we do will certainly head north,” he said.
Pullen added that although Humana has a great digital in-house marketing team, it pays extremely well when it outsources digital work. He said this work, too, would go away if Humana were bought. One job Pullen did for Humana — creating a website — paid enough to float six months’ worth of salaries at a company where he used to work. He declined to name the company.
Dan Barbercheck, president of Red7e, said that while his firm hasn’t worked with Humana in more than a decade, he believes the collective loss to Louisville’s marketing industry could be massive. He said related industries that could be hit include video, print and web production. But for now, things are very much unclear.
“How a new owner of Humana would affect our market would depend greatly on whether or not their plans call for autonomy for the operating unit, or to fold its management into the larger parent company,” he said.
Barbercheck said it’s likely local marketing and advertising dollars would disappear following a merger, which is what happened when Louisville’s local banks were purchased by national entities.
But Rita Vest, president of Louisville’s Vest Advertising, who has worked with Humana since forming her own company in 1991, believes that if Humana is acquired, it could play out much differently than the bloodbath scenarios feared by many. Humana has special expertise in Medicare Advantage, a highly profitable field also thought to be the company’s selling point in the health care consolidation likely to happen among the top five U.S. firms. She said it doesn’t make sense that a buyer would suddenly dismantle the teams — both in-house and on contract — that made Humana excel.
“There are such knowledgeable people on that end (Medicare Advantage) of the business, and there’s not many companies like them that deliver it so well,” Vest said.
IL also contacted Scoppechio, an ad firm that currently works with Humana, but hasn’t heard back.
Both Vest and Barbercheck said local printers could be hit hard by a Humana acquisition. IL contacted a number of these firms, and we were finally able to get the owner of one on the phone, although the person would only speak without attribution. The person said Humana is an important client, and they’ve started to consider the fallout of an acquisition.
“I wouldn’t be surprised if I have to make decisions to hold up on new hires or cut staff,” the person said. “I haven’t really made a call to that effect yet.”
Humana also casts a wide shadow across Louisville’s legal field. This is not accidental, said one executive at a larger local firm who requested anonymity. This person estimated about 1 percent of their firm’s business is with Humana, so if Humana left it would have little direct impact on them.
The source said Humana currently works with most of the biggest, and best, law firms in Louisville. They spread that wealth for protection, as these same firms now would have a conflict of interest if another party wanted to sue Humana.
“If someone wants to sue Humana, and calls us, we’re not going to sue Humana,” they said. “So they’ll have to go with a smaller, less powerful firm to be local counsel.”