Humana Forms Another ACO - Analyst Blog


U.S. health insurer Humana Inc. ( HUM ) has formed another Accountable Care relation with Mercy. The program intends to benefit Humana's Medicare Advantage members in the Southwest Missouri area. The members also stand to gain from Mercy's large network of 33 hospitals, 700 outpatient facilities and more than 2,100 physicians spread across Missouri, Arkansas, Kansas and Oklahoma.

Humana's Accountable Care initiative is similar to an Accountable Care Organization (ACO). 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. Focus on the needs of patients and linking payments to outcomes directs the model to improve the health of individuals and communities and curb rising health care costs.

In line with the objectives of an ACO, the aforementioned deal should mutually benefit both Humana and Mercy, helping improve overall healthcare in the aforementioned region.

Humana will pay the service provider on the basis of the quality of service provided. Humana aims to offer its members a world-class patient experience through customized care from doctor resources, by decreasing health disparities, and affecting predictive modeling and electronic health records.   

Humana currently consists of 33,000 primary care physicians and has Accountable Care associations with 900 organizations. We believe the strengthening of Humana's healthcare services in Southwest Missouri will enhance the membership base of the company, thereby paving the way for stronger revenue generation.

Other insurers actively engaged in forming accountable care organizations include UnitedHealth Group Inc. ( UNH ), Aetna Inc. ( AET ) and Cigna Corp. ( CI ).  

Humana currently carries a Zacks Rank #3 (Hold).

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

CIGNA CORP (CI): Free Stock Analysis Report

HUMANA INC NEW (HUM): Free Stock Analysis Report

UNITEDHEALTH GP (UNH): 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 , HUM , UNH

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