U.S. health insurer
) announced that it is going to launch another 'Accountable Care
Organization' ("ACO") initiative with Banner Health Network. This
step is in sync with Cigna's goal to improve the quality of care
and service provided to the customers along with lowering
healthcare costs and improving overall value.
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 is intended to improve the health of individuals and
communities as well as curtail the rising healthcare costs.
Cigna's new ACO initiative with Banner, effective from November
1, 2012, will serve more than 20,000 individuals covered by Cigna
health plan. These customers are already receiving services from
approximately 2,600 doctors associated with Banner Health Network
Through this program doctors will monitor and coordinate all the
aspects of a patient's care. The enrollees in the program will
also have the benefit of receiving services of registered nurses
employed by Banner Health Network.
They will coordinate patient care, educate patients about
various health conditions, and will also advice and give
emotional support to the patients if need arises. The ACO
will also designate care coordinators who will stay close to the
patients and monitor the services being given to them.
Cigna calls its ACO-like initiatives Collaborative Accountable
Care ("CAC"). ACOs or CACs is one of the several ways by which
President Obama is looking to improve the quality of health the
people in his nation. It is considered as a tool that would offer
seamless, high quality care for the entire population.
At present, Cigna is engaged in 42 CAC initiatives in 18 states.
These programs provide service to more than 390,000 Cigna
customers and more than 5,500 primary care physicians. The
company initiated its first CAC program back in 2008. It aims to
serve about 1 million customers via 100 CAC initiatives by 2014.
The Health Care Reform called for such an arrangement in order to
control the unnecessary expenses associated with lack of
coordination between multiple physicians and other providers.
Most Americans with multiple chronic conditions receive care from
multiple physicians, which often resulted in patients not getting
proper attention from the physicians.
Thus, many patients ended up being victims of medical errors
and faced hospital re-admissions within days of their discharge.
To control such a situation, ACOs were formed so that exorbitant
amounts spent due to lack of managed care become less.
UnitedHealth Group Inc.
) are also assertively taking ACO initiatives. Going forward, we
expect acceleration in the formation of such patient-centered
Cigna currently retains a Zacks # 3 Rank, which translates
into a short-term Hold ating. We, also, maintain our long-term
Neutral recommendation on its shares.
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