Humana (HUM) Rises on ACO with Summit Medical Group
With the announcement of yet another Accountable Care agreement, this time with Summit Medical Group, health and wellbeing company Humana Inc.’s (HUM) shares gained 0.2% to close at $136.42 in the last trading session. The latest seven-year Accountable Care agreement is aimed at improving healthcare and bringing about more coordinated services for the Medicare Advantage (MA) members of Humana in East Tennessee.
Under an Accountable Care agreement, health and well-being companies, and physician practices come forward to collaborate and establish an Accountable Care Organization (:ACO). The sole motive of the ACO formation is to use each others’ resources and expertise to provide enhanced healthcare at an affordable price. The aforementioned agreement between Humana and Summit is a similar deal that will be effective from Jan 1, 2015 and offer pay-for-results incentives to physicians based on improved clinical outcomes, better patient experience and reduced costs.
Humana provides a suite of health and wellness programs like health coaching, disease management and so on to its members. On the other hand, physicians are offered analytics tools by Humana.
Meanwhile, Summit is a renowned name in East Tennessee as a primary care organization. It has a physician-directed care coordination program that caters to Summit patients with Humana Medicare Advantage. It assesses patient’s individual needs, assists them with transportation or caregiver support, offers services to help manage chronic illnesses, optimizes disease control and assists patient well-being. Humana has selected Summit as a partner and brought it under its ACO continuum as the latter complements the company’s services.
With the rising complexities in the Medicare enrollee’s needs, there emerges an increased demand for healthcare service providers and superior quality of care. Thus, Humana and Summit have collaborated to establish the ACO to cater to this growing demand.
Humana has a 26-year long Accountable Care history and involves above 1.2 million members and 38,000 primary care physicians. It has been establishing ACOs for a long time to enhance patient care for its MA members.
Earlier, this month the company entered into an Accountable Care relationship with Valence Health, one of the major providers of clinical integration, population health and value-based care solutions. Through this arrangement, healthcare providers will be able to avail a wide array of population health capabilities and tools that will enable an easy transition to value-based care from fee-for-service care.
Humana currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the healthcare space that look attractive at current levels include WellPoint, Inc. (WLP), UnitedHealth Group Inc. (UNH) and Centene Corp. (CNC). All of these have a Zacks Rank #2 (Buy).
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