Aetna Forms ACO in New York with Weill Cornell Physicians

U.S. health insurer Aetna Inc. (AET) has announced the formation of another Accountable Care Organization (“ACO”) with Weill Cornell Physicians.

An ACO is a voluntary collaboration of healthcare providers offering coordinated high-quality care to patients. Such an organization is accountable for the quality, cost and overall care offered to members.

As a result of this alliance, Weill Cornell Physicians’ 1,237 doctors, healthcare professionals and care managers will provide service to Aetna’s 9000 commercial and Medicare members in New York.

Aetna's ACO will also designate nurse case managers who will work closely with patients to ensure best quality service to patients.

Last week, the health insurer formed another ACO with Baylor Scott & White Quality Alliance in North Texas and also launched the Aetna Whole Health product in the same region.

The new ACO from Aetna emphasizes its efforts to expand its new provider model, called accountable care solution which aims at providing improved yet affordable standards of safety and quality in patient care.

The company is witnessing positive cost outcome and quality from its ACO program. Analysis by the company has proved that these collaborations have indeed reduced patients’ hospital admissions and readmissions, increased preventive care, and brought down overall health care costs.

The ACO wave is sweeping across the health insurance industry as these provide insurers with a way to reduce medical cost. Under health reform, insurers have lost flexibility in the ways that they can cope with rising medical expenses. They can no longer rely on many of their traditional medical underwriting strategies, such as exclusion of pre-existing conditions. The most effective approach for insurers now is to rely exclusively on current cost control mechanisms to manage members’ medical expenses. An ACO helps insurers to accomplish these objectives.

Health insurers like UnitedHealth Group Inc. (UNH), Cigna Corp. (CI) and Humana Inc. (HUM) are also aggressively forming ACOs. Going forward, we expect such patient-centric collaborations to grow rapidly.

Aetna currently retains a Zacks Rank #3 (Hold).