Humana Signs Accountable Care Deal with Banner Network - Analyst Blog

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Humana Inc. ( HUM ) recently entered into a new Accountable Care agreement with Banner Network Colorado (BNC), an integrated provider delivery network in North Colorado. Through this agreement, Humana intends to enhance health care for individuals and families purchasing insurance in Weld and Larimer counties through the Connect for Health Colorado and Humana commercial health maintenance organization (HMO) programs.

Under an Accountable Care agreement, health and wellbeing companies, and physician practices come forward to collaborate and establish an Accountable Care Organization (ACO). The sole motive behind ACO formation is to use each others' resources and expertise to provide enhanced healthcare at an affordable price. The aforementioned agreement between Humana and BNC is a similar deal that will be effective from Jan 1, 2015 and will offer coordinated care to individuals opting for Humana's HMO plans through Colorado's insurance marketplace. Enrollment under this plan will take place through Feb 15, 2015.

Through this ACO, Humana members will have access to BNC's 300 primary care physicians and specialists, hospitals such as North Colorado Medical Center in Greeley, McKee Medical Center in Loveland and Banner Fort Collins Medical Center (opening in Apr 2015), health centers and other ancillary services. Thus, this arrangement will help members avail care and wellness programs at a more personalized level.

The abovementioned deal is a value-based arrangement. Usually the traditional health care systems emphasize payment for services rather than healthier patient outcomes. Thus, Humana's shift to a pay-for-value or value-based system lends it a comparative advantage over other health care systems in terms of delivering better healthcare to more number of members.

Humana boasts a 26-year long Accountable Care history which involves above 1.2 million members and 38,000 primary care physicians. It has been setting up ACOs over a long period to enhance patient care for its Medicare Advantage (MA) members. Among the ACO deals inked in the last month, the one with Summit Medical Group is also scheduled to be effective starting Jan 1, 2015.

Humana currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare space include Gentiva Health Services Inc. ( GTIV ), WellPoint, Inc. ( WLP ) and Centene Corp. ( CNC ). While Cenetne and Gentiva sport a Zacks Rank #1 (Strong Buy), WellPoint has 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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