AET Forms ACO with Riverside Health - Analyst Blog

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U.S. health insurer Aetna Inc. ( AET ) has agreed to form an Accountable Care Organization (ACO) with Riverside Health System. This is in sync with the company's effort to improve the safety and quality of patient care and make health care more affordable.

An ACO is a collaboration of health care providers, who voluntarily form alliances to provide coordinated high quality care to patients. An ACO is accountable for the quality, cost, and overall care offered to members. By focusing on the needs of patients and linking payments to outcomes, the model is intended to improve the health of individuals and communities and curb rising health care costs.

Aetna will also provide service via Aetna Whole Health, which will enable members to get coordinated care from physicians and health care facilities. 

The health insurer will introduce a new provider network known as Coastal Virginia Health Partners. The network will include Riverside Health System, Bon Secours Health System, Children's Hospital of The King's Daughters and Chesapeake Regional Medical Center. 

Via this ACO Aetna aims to provide a more synchronized, personalized experience for patients; lower co-pays and improved health care outcomes.

This is the third ACO agreement of Aetna in Virginia. In the region, Aetna already has a joint venture with Inova and Carilion Clinic.

An ACO or collaborative accountable care is one of the several ways by which President Obama is introducing improvements in the quality of health of all Americans. It is viewed as a tool that would deliver seamless, high quality care for the overall population.

The Health Care Reform called for such an arrangement in order to trim unnecessary expenses associated with the absence of coordination between multiple physicians and other providers. Most Americans with multiple chronic conditions receive care from multiple physicians, and it has been observed that few patients were not taken care of to the fullest extent possible by some physicians. A large percentage of the sick population ended up being victims of medical errors and faced hospital readmissions within days of their discharge. Thus, ACOs were formed to reduce the exorbitant amounts spent due to lack of managed care.

Other health insurers like UnitedHealth Group Inc. ( UNH ) and CIGNA Corp. ( CI ) are also aggressively forming ACOs. Going forward, we expect such patient-centered collaborations to rapidly grow in numbers.

Aetna currently retains a Zacks Rank #2 (Buy). Health care provider under our coverage, Molina Healthcare, Inc. ( MOH ), among other health care providers, carries Zacks Rank # 2 (Buy) and is worth noting.



AETNA INC-NEW (AET): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ACO , AET , CI , MOH , UNH

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