Cigna Expands ACO Initiative - Analyst Blog
U.S. health insurer CIGNA Corp. ( CI ) has started Collaborative Accountable Care initiative with Santa Clara County IPA (SCCIPA).
SCCIPA is the largest individual practice association in Santa Clara County with 850 physicians in more than 60 specialties.
The program was effective from Oct 1, 2013. Approximately 13,000 Cigna customers who are covered by Cigna PPO health plan and receive care from SCCIPA's 850 primary care doctors and specialists will stand to gain from the initiative.
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 help to curtail rising healthcare costs.
Through this program doctors will monitor and coordinate all the aspects of a patient's care. The patients will get the benefits of the program even as they retain their current physician. The program does not specify any changes regarding referrals to specialists. Patients suffering from long-term diseases such as diabetes, heart disease and obesity are the ones who will benefit the most from the initiative.
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.
Cigna's 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 recommend direct medical help. At the same time, they will educate patients by helping them participate in various health and wellness programs and workshops.
Remuneration to SCCIPA physicians is to be based on its performance in reducing patients' health care costs while providing them best service. Additional compensation will be provided by the way of pay for value, which will depend upon meeting targeted level of medical quality and cost.
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 75 Collaborative Accountable Care initiatives in 26 states. These programs provide services to more than 760,000 Cigna customers. Cigna initiated its first CAC program back in 2008. Cigna aims to serve about 1 million customers via 100 CAC initiatives by 2014.
Along with its newly acquired subsidiary HealthSpring, Cigna has 240 ACO programs in 31 states serving more than one million customers. It has approximately 58,000 participating doctors, which includes nearly 20,000 primary care physicians and nearly 38,000 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 #2 (Buy). Another stock, FBL Financial Group Inc. ( FFG ), carrying a Zacks Rank #1 (Strong Buy) is worth considering.
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