Tenet Healthcare Corporation
) is again making headlines with its development on the previously
announced collaboration with the Blue Cross and Blue Shield of
Texas (BCBSTX). The collaborating entities have made their first
move toward implementing the Accountable Care Organization (ACO) by
extending their contract for a multi-year period.
This ACO, which is an outcome of the collaboration between BCBSTX
and Tenet Healthcare's clinically integrated organizations in
Texas, will expectedly be launched on Jan 1, 2015. The motive
behind the formation of the statewide ACO is to bring in healthcare
providers from Tenet Healthcare's Texas markets to deliver
high-quality value-based care to BCBSTX members. This is aimed to
be done by improving coordination among physicians and reducing
unnecessary hospital admissions, readmissions, ER visits and
duplication of services.
While announcing the collaboration in Nov 2013, it was stated that
the agreement could be extended to incorporate health insurance
marketplace patients over the life of the agreement. Along with the
aforementioned long-term contract extension, BCBSTX members will be
consistently provided an in-network access to Tenet Healthcare's
hospitals and outpatient centers at Texas. This, in turn, should
help Tenet Healthcare to generate more revenues.
Health care providers voluntarily form alliances to establish ACOs
to provide coordinated high quality care to patients at lower
costs. Tenet Healthcare has been forming ACOs with a number of
organizations for quite some time to enhance patient care in the
U.S. Earlier this month, the company inked a collaborative
Accountable Care deal with the Blue Cross and Blue Shield company
of Florida, named Florida Blue. Tenet Healthcare presently operates
12 ACOs in nine states.
Other healthcare stocks that have formed ACOs in recent times
). While Aetna formed an ACO with Northeast Medical Group, Inc.
("NEMG") in Connecticut on May 1, Humana formed an Accountable Care
relation with Mercy in Apr 2014. These ACOs or collaborative
accountable cares are a means of working toward improving the
health of all Americans, in consistence with President Obama's
Currently, Tenet Healthcare has a Zacks Rank #3 (Hold). However,
among the better-ranked stocks in the healthcare services space,
Horace Mann Educators Corp.
) is worth considering. Horace Mann sports a Zacks Rank #1 (Strong
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