Tenet Healthcare CorporationTHC recently signed a new four-year services agreement with one of the leading health insurers, Aetna Inc. AET . This contract is an extension to the existing partnership between the two entities.
Per the contract, Aetna's 8.5 million Medicare Advantage, Medicaid and Coventry members will gain an in-network access to Tenet Healthcare's hospitals, physicians and outpatient centers. Additionally, the partnership will focus on forming Accountable Care arrangements to provide Aetna members high-quality care at affordable prices. Thus, the transaction is undoubtedly a significant move by Tenet Healthcare to reach its goal of associating itself with insurance companies so as to bring superior-quality, convenient and affordable choices to its members. The terms of the agreement will be effective from Jan 1, 2016.
Aetna makes way for a large part of Tenet Healthcare's revenue generation from health plan customers by including the latter's hospitals and other facilities under its network. Per the contract extension, two new hospitals of Tenet Healthcare, namely Baptist Health System in Birmingham, AL and Carondelet Health Network in Tucson, AZ, will be included in the partnership.
While Tenet Healthcare is an eminent name in the hospital industry, Aetna steals the show as one of the top few health insurers. Thus, the contract creates an immense opportunity for members to enjoy the best-in-class services from the two giants in the healthcares services arena. Additionally, the Accountable Care arrangement should help control healthcare costs. This should attract more members and enhance the customer base for Tenet Healthcare, thereby making way for more revenue generation.
Tenet Healthcare currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the hospital industry include MEDNAX, Inc. MD and Acadia Healthcare Company, Inc. ACHC . While MEDNAX sports a Zacks Rank #1 (Strong Buy), Acadia Healthcare holds a Zacks Rank #2 (Buy).
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