Cigna Forms Another ACO

U.S. health insurer CIGNA Corp. (CI) has formed a Collaborative Accountable Care initiative with Arizona Community Physicians and Arizona Connected Care.

This step is in sync with Cigna’s goal to improve the quality of care and service provided to the customers along with lowering healthcare costs and improving overall value.

Cigna’s Collaborative Accountable Care initiative is similar to an Accountable Care Organization (ACO). An ACO is a group effort by 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 connecting payments to the service offered, this model intends to improve the health of individuals and communities as well as curtail the rising healthcare costs.

Cigna’s new ACO initiative will be the first one in the Tuscon city area and has become operational from Jul 1. This program will serve more than 12,000 individuals covered by the Cigna health plan. These customers already receive services from 119 doctors affiliated to Arizona Community Physicians or 217 health care professionals who are a part of Arizona Connected Care.

Through this program doctors will monitor and coordinate all the aspects of a patient’s care. The enrollees in the program will also have the benefit of receiving services of registered nurses. They will coordinate patient care, educate patients about various health conditions, and counsel them on proper health care.

The ACO will also designate care coordinators who will stay close to the patients and monitor the services being offered. They will follow up with the patient throughout, by reminding them of screenings required or medical help so that their chronic condition does not worsen further.

The physicians will receive remuneration based on their performance in reducing patients’ health care cost while providing them best service.

Initiatives like ACO or CAC are being deployed to improve the health of the Americans as well as to offer high quality health care to patients.

At present, Cigna is engaged in 66 Collaborative Accountable Care initiatives in 26 states. These programs provide services to more than 700,000 Cigna customers. The company initiated its first CAC program back in 2008. It aims to serve about 1 million customers via 100 CAC initiatives by 2014.

Companies like UnitedHealth Group Inc. (UNH) and Aetna Inc. (AET) are also assertive about ACO initiatives. Going forward, we expect acceleration in the formation of such patient-centered collaborations.

Cigna currently retains a Zacks Rank # 1 (Strong Buy). Another stock, Assured Guaranty Ltd. (AGO) carrying a Zacks Rank #1 (Strong Buy) is worth considering.