) rose 1.8% within a single trading session to close at $127.32,
after the company announced an Accountable Care alliance with the
Nebraska Health Network. This news is expected to drive bullish
sentiment on the stock as this marks yet another attempt by Humana
to enhance the patient care experience of the Medicare Advantage
(MA) members, after a similar deal with Health Choice Preferred
Network last week.
While the deal with Health Choice was aimed to provide quality
healthcare to MA members in the Salt Lake, Davis, Utah and Weber
counties, the latest agreement targets to cater to MA members in
the greater Omaha area. This endeavor definitely raises optimism as
it is not only expected to boost MA member outcomes and lead to
increased enrolment but also strengthens Humana's 25-year long
Accountable Care relationship history.
As part of the agreement, Humana, in association with Health
Network of Nebraska, which is the healthcare delivery organization
jointly owned by Methodist Health System, The Nebraska Medical
Center and their affiliated physicians, will form an Accountable
Care Organization (ACO) in Jan 2015. Going ahead, the entities
remain eager to collaborate further to fulfill goals like disease
management and prevention, including diabetes care and treatment,
breast cancer screenings, colorectal cancer screenings and
Similar to the alliance with Health Choice Preferred Network, the
aforementioned Accountable Care deal focuses on a pay-for-value
system. From time to time, Humana is undertaking initiatives to
shift to a value based system from the traditional pay-for-services
system. The company is likely to benefit from this transition as
most of the healthcare providers still resort to the traditional
system that is not as efficient as the value-based system in
delivering better healthcare at lower costs. Thus, this shift will
likely give Humana a comparative advantage over peers in terms of
enhancing healthcare outcomes and thereby gaining more members.
Currently, Humana carries a Zacks Rank #3 (Hold). Better-ranked
players in the healthcare services space that appear attractive at
current levels include Gentiva Health Services Inc. (
), Amedisys Inc. (
) and Chemed Corp. (
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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HUMANA INC NEW (HUM): Free Stock Analysis
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