Cigna Expands ACO with HealthTexas - Analyst Blog

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U.S. health insurer CIGNA Corp. ( CI ) has expanded its Collaborative Accountable Care initiative with HealthTexas Provider Network (HTPN).

HTPN is a physician group in the Dallas/ Fort Worth Metroplex, affiliated with Baylor Health Care System. When the ACO contract was formed in April last year, 91 HTPN physicians at 12 clinics were involved. Now 114 more physicians at 35 additional clinics have agreed to be a part of the ACO.

This step is in sync with Cigna's goal to improve the quality of care and service provided to their customers along with lowering healthcare costs and improving overall value.

Cigna's Collaborative Accountable Care initiative is similar to an Accountable Care Organization (ACO).  An ACO is a group effort by 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 connecting payments to the service offered, this model intends to improve the health of individuals and communities as well as curtail rising healthcare costs.

Through this program doctors will monitor and coordinate all the aspects of a patient's care. The enrollees in the program will have the additional benefit of receiving services of registered nurses. They will coordinate patient care, educate patients about various health conditions, and counsel them on proper health care. 

The ACO will also designate care coordinators to work closely with patients and monitor the services being offered. They will follow up with the patient throughout, sending reminders about  screenings required or direct medical help. The aim is to prevent worsening of chronic conditions.

The physicians will receive remuneration based on their performance in reducing patients' health care costs while providing them best service.  

Initiatives like ACO or CAC are being deployed to improve the health of Americans as well as to offer high quality health care to patients. 

Cigna's ACO initiative is based on Patient-Centered Medical Home (PCMH) program. Through the PCMH Cigna works to improve patient care with strong focus on collaboration and communication with physician practices. 

At present, Cigna is engaged in 66 Collaborative Accountable Care initiatives in 26 states. These programs provide services to more than 700,000 Cigna customers. Cigna initiated its first CAC program back in 2008. It aims to serve about 1 million customers via 100 CAC initiatives by 2014.

Along with its newly acquired subsidiary HealthSpring, Cigna has 231 ACO programs in 31 states serving more than one million customers. It has approximately 55,000 participating doctors, which includes nearly 19,000 primary care physicians and nearly 36,000 specialists. 

Companies like UnitedHealth Group Inc. ( UNH ) and Aetna Inc. ( AET ) are also assertive about ACO initiatives. Recently, UnitedHealth announced to double is ACO contracts to $50 billion by 2017.  Going forward, we expect acceleration in the formation of such patient-centered collaborations.

Cigna currently retains a Zacks Rank #1 (Strong Buy). Another stock, Assured Guaranty Ltd. ( AGO ) carrying a Zacks Rank #2 (Buy) is worth considering.



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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 , AGO , CI , UNH

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