Cigna Forms ACO with Hunterdon Healthcare

U.S. health insurer CIGNA Corp. (CI) has formed a Collaborative Accountable Care initiative with Hunterdon Healthcare Partners, LLC, a physician hospital organization (PHO) affiliated with Hunterdon Healthcare.

This step is in sync with Cigna’s goal to improve the quality of care and service provided to their 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 rising healthcare costs.

Cigna’s new ACO initiative has become operational from Jul 1. This program will serve approximately 6,500 individuals covered by the Cigna health plan. These customers already receive services from 120 primary care physicians and 280 specialists.

Through this program doctors will monitor and coordinate all the aspects of a patient’s care. Patients will benefit from the program and at the same time continue with their current physician. Individuals who are enrolled in a Cigna health plan and later choose to seek care from a doctor in the medical group will also be eligible to receive benefits of the program.

The enrollees in the program will have the additional 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 to work closely with patients and monitor the services being offered. They will follow up with the patient throughout, by reminding them of screenings required or medical help. The aim is to prevent worsening of chronic conditions.

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

Initiatives like ACO or CAC are being deployed to improve the health of 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. Cigna initiated its first CAC program back in 2008. It aims to serve about 1 million customers via 100 CAC initiatives by 2014.

Along with its newly acquired subsidiary HealthSpring, Cigna has 231 ACO programs in 31 states serving more than one million customers and have approximately 55,000 participating doctors, which includes nearly 19,000 primary care physicians and nearly 36,000 specialists.

Companies like UnitedHealth Group Inc. (UNH) and Aetna Inc. (AET) are also assertive about ACO initiatives. Last week UnitedHealth announced to double is ACO contracts to $ 50 billion by 2017. Going forward, we expect acceleration in the formation of such patient-centered collaborations.

Cigna currently retains a Zacks Rank #2 (Buy). Another stock, Assured Guaranty Ltd. (AGO) carrying a Zacks Rank #1 (Strong Buy) is worth considering.