Health benefits provider Humana Inc. (NYSE: HUM) has made a couple of accountable care announcements in the last week.
Yesterday, the Louisville-based company said it plans to partner with Washington’s MultiCare Health System for an accountable care agreement that aims to improve health for Humana Medicare Advantage members there. This follows an announcement late last week that the company was entering into an accountable care agreement with Summit Medical Group in East Tennessee related toMedicare Advantage members there.
Accountable care organizations aim to provide more coordinated care in an effort to reduce costs. This FAQ on Kaiser Health News makes a pretty great primer if you’re new to the topic. Traditionally, health systems and doctors have been paid more for providing more — not necessarily better — care. Accountable care organizations are touted as a means of fixing that; providers are paid more for keeping their patients healthy rather than simply for seeing them more often, the FAQ explains.
Humana has launched several accountable care organizations in the last year or so, and others in the industry are doing the same. This report from Zacks Equity Research saysthat forming ACOs is rampant in the industry right now because insurers see it as a way to reduce medical costs and improve outcomes.
Insurance companies rely on these methods because, under the Patient Protection and Affordable Care Act, there are only so many ways they can cope with rising medical expenses, the Zacks report said. They no longer can rely on underwriting strategies, such as excluding pre-existing conditions, for instance.
Humana shares closed up slightly when its latest ACO announcement was made yesterday but it’s down so far today. At mid-afternoon, Humana shares were trading at $139.11. That’s down about 0.73 percent on the day.
Date: November 25, 2014