UnitedHealth (UNH) Forms ACO to Serve Members in Illinois

UnitedHealth Care, a unit of UnitedHealth Group Inc. (UNH), has formed an Accountable Care Organization with Advocate Heath Care and Illinois Health Partners.

An ACO is a collaboration of health care providers, which voluntarily form alliances to provide coordinated high quality care to patients. ACOs are accountable for the quality, cost and overall care offered to members. Focus on the needs of patients and linking payments to outcomes directs the model to improve the health of individuals and communities and curb rising health care costs.

Through this ACO, UnitedHealth Care intends to serve more than 65,000 residents in Illinois enrolled in its Medicare Advantage plans.

UnitedHealth Care’s Medicare Advantage members who currently receive care from participating providers will automatically receive benefits under this ACO.

Notably, UnitedHealth Care already has a significant presence in Illinois. Through a care provider network of more than 228 hospitals and 30,425 physicians statewide, it serves more than 1.3 million Illinois residents.

UnitedHealth Care is significantly expanding its use of accountable care contracts over the next five years across its employer-sponsored, Medicare and Medicaid businesses, working with care providers to transition from fee-for-service contracts to payment models that reward value over volume and improves health outcome for patients.

Presently, more than $31 billion of UnitedHealth’s reimbursements to hospitals, physicians and ancillary care are tied to its accountable care initiatives. By the end of 2018, UnitedHealth Care’s reimbursement for accountable care contracts are expected to total $65 billion.

Other health insurers like Aetna Inc. (AET) and Cigna Corp. (CI), Humana Inc. (HUM) are also aggressively forming ACOs. Going forward, we expect such patient-centered collaborations to grow rapidly.

UnitedHealth carries Zacks Rank # 3 (Hold).