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Humana Forms ACO with Health Choice to Boost Patient Care - Analyst Blog

Humana Inc. ( HUM ), in an attempt to strengthen its 25-year long Accountable Care relationship history, has penned another deal. This time, it is with one of the divisions of IASIS Healthcare - Health Choice Preferred Network. IASIS is a managed care organization and insurer with around 30,000 physicians and providers, and offers healthcare services through health plans, integrated delivery systems and managed care solutions.

As part of the deal, Humana in association with Health Choice, will launch the Accountable Care program in four counties, namely, Salt Lake, Davis, Utah and Weber to serve Humana Medicare Advantage members. This news is set to drive bullish sentiment on the stock as it marks Humana's relentless effort to provide quality healthcare at an affordable price to medical members.

Humana's Accountable Care initiative is similar to an Accountable Care Organization (ACO). An ACO is a collaboration of healthcare providers who voluntarily form alliances to provide coordinated high quality care to patients at reduced costs. In line with the objectives of an ACO, the aforementioned deal should mutually benefit both Humana and Health Choice.

Therefore, the Accountable Care deal is expected to benefit Humana by providing its members access to the high quality care of physicians and clinics of Health Choice. Physicians and providers associated with Health Choice will also stand to benefit, as they will be provided performance-oriented incentives. Overall, the main aim behind the collaboration is to bring in better patient care coordination and cost-effective quality care so as to enhance patient experience for Humana members.

To offer superior health care to patients, this Accountable Care arrangement will resort to a number of population management tools like predictive analytics and chronic care, disease management and wellness programs. Better patient experience will boost customers' confidence and help Humana gain more members in the region.

Usually the traditional healthcare systems emphasize on payment for services rather than healthier patient outcomes. Thus, at this juncture Humana's shift to a pay-for-value or value-based system gives it a comparative advantage over other healthcare systems in terms of delivering better healthcare and thereby, gaining more members.

Humana currently carries a Zacks Rank #3 (Hold). However, better-ranked stocks in the healthcare services space include Chemed Corp ( CHE ), Centene Corp. ( CNC ) and Gentive Health Services Inc. ( GTIV ). While Chemed and Gentiva sport a Zacks Rank #1 (Strong Buy), Centene carries a Zacks Rank #2 (Buy).

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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 Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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