Humana Inc. HUM has entered into a new Accountable Care arrangement. The latest deal is with a Washington state independent physicians association, Northwest Physicians Network, LLC (“NPN”). According to the deal, Humana Medicare Advantage (MA) members will gain access to around 500 providers and 200 ancillary facilities of NPN across the Puget Sound region.
Humana is an esteemed name in the Accountable Care space. Under an Accountable Care agreement, health and well-being companies as well as physician practices come forward to collaborate and establish an Accountable Care Organization (ACO). The sole motive behind an ACO formation is utilization of each others’ resources and expertise to provide enhanced healthcare at an affordable price. The latest deal is also in line with the objectives of an ACO as it reflects the company’s focus on amalgamating clinical expertise with business knowledge to lead to a cohesive integrated care approach.
NPN is a renowned name when it comes to providing community-based providers an access to patients, tools, and services. Hence, its association with Humana complements the company’s value-based model that encourages evidence-based, high-quality care with a focus on physician support for successful population health management. At the same time, the model focuses on improving cost to enhance the overall patient experience.
Moreover, the transaction brings together Humana and NPN’s complementary population health capabilities including predictive analytics, chronic care as well as disease management and wellness programs.
As the deal focuses more on a pay-for-value system than pay-for-services system, it is likely to be beneficial to Humana. From time to time, Humana undertakes initiatives to shift to a value-based system from the traditional pay-for-services one.
The company is likely to benefit from this transition as many healthcare providers still resort to the traditional system that is not as efficient as the value-based system in delivering better healthcare at lower costs. Thus, this shift will likely give Humana a comparative advantage over peers in terms of enhancing healthcare outcomes and thereby, gaining more members.
Humana currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the health maintenance organization (HMO) space are Centene Corp. CNC, Aetna Inc. AET and UnitedHealth Group Inc. UNH. All three stocks hold a Zacks Rank #2 (Buy).
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