Aetna Forms another ACO

U.S. health insurer Aetna Inc. (AET) has agreed to form an Accountable Care Organization (ACO) with New Haven Community Medical Group (NHCMG). This is in sync with the company’s effort to improve safety and quality of patient care and to make health care more affordable.

An ACO is a collaboration of 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 linking payments to outcomes, the model intends to improve the health of individuals and communities and curb rising health care costs.

The program will serve 5800 fully insured plans in the Greater New Haven area. The plan will also serve other Aetna fully insured members if they visit a NHCMG physician.

Via this ACO Aetna aims to provide a more synchronized, personalized experience for patients; lower co-pays and improve health care outcomes.

NHCMG physicians will receive remuneration based on their ability to offer quality medical care at lower rates.

ACOs or collaborative accountable care is one of the several ways by which President Obama wants to improve the quality of health of all Americans. It is viewed as a tool that would deliver seamless, high quality care for the overall population.

The Health Care Reform called for such an arrangement in order to trim unnecessary expenses due to a lack of coordination between multiple physicians and other providers. Most Americans with multiple chronic conditions receive care from multiple physicians and it has been observed that a few of them received inadequate care. A large percentage of the sick population were found to be victims of medical errors and faced hospital readmissions within days of their discharge. Thus, ACOs were formed to reduce the exorbitant amounts spent due to lack of managed care.

Other health insurers like UnitedHealth Group Inc. (UNH) and CIGNA Corp. (CI) are also aggressively forming ACOs. Going forward, we expect such patient-centered collaborations to grow rapidly.

Aetna currently retains a Zacks Rank #1 (Strong Buy). Another health care provider under our coverage, Molina Healthcare, Inc. (MOH), is also similarly placed with a Zacks Rank #1.