Humana's Latest ACO Targets Kenosha County MA Members - Analyst Blog

Humana Inc. (HUM) has inked yet another Accountable Care agreement, this time with United Hospital System. This alliance is scheduled to begin Jan 1, 2015.

In line with the previous Accountable Care relationships of Humana, the latest endeavor is slated to provide Humana Medicare Advantage (MA) members in southeast Wisconsin, particularly in Kenosha County, an access to more resources, thereby enhancing healthcare for them.

Moreover, with an increasing number of retirees in communities served by United Health, opting for MA plans, this deal should help Humana gain new members.

Humana's Accountable Care initiative is similar to an Accountable Care Organization (ACO). An ACO is a collaboration of healthcare 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. Focus on the needs of patients and the linking of payments to outcomes enable the model to improve the health of individuals and communities and limit the rise in healthcare costs.

In accordance with the objectives of an ACO, the aforementioned deal should benefit both Humana and United Hospital System. United Hospital's veteran team of physicians and facilities will help in enhancing the patient care experience for Humana members. For this, the partnership will resort to more personalized care and population management tools like predictive analytics and chronic care, disease management and wellness programs. Moreover, as Humana's members will be offered care under the United Health brand, the deal will accentuate the goodwill of the latter and lend access to more number of patients. Additionally, apart from providing value-based incentives, the deal will lead to steady revenue generation for United Health.

Humana boasts a 26-year long Accountable Care history which involves above 1.2 million members and 38,000 primary care physicians. It has been setting up ACOs over a long period to enhance patient care for its MA members. Earlier this month, the company signed two ACO deals that positions Humana favorably with investors and potential members. While the first one was with Banner Network Colorado (BNC), the latest is with HealthCare Partners Nevada.

Humana currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare space include UnitedHealth Group Incorporated (UNH), Anthem, Inc. (ANTM) and Centene Corp. (CNC). While Centene sports a Zacks Rank #1 (Strong Buy), Anthem and UnitedHealth have a Zacks Rank #2 (Buy).