When it comes to providing improved and more coordinated healthcare services,Humana Inc. HUM leaves no stone unturned. The latest of its endeavors is the Accountable Care agreement with King’s Daughters’ Health. Per the deal, King’s Daughters’ will deliver enhanced health care for Humana’s Medicare Advantage (MA) members in Madison, IN. King’s Daughters’ currently caters to five counties in Southeast Indiana and North Central Kentucky.
Under an Accountable Care agreement, health and wellbeing companies as well as physician practices collaborate and establish an Accountable Care Organization (ACO). An ACO enables the participants to utilize each others’ resources and expertise to provide coordinated high quality care to patients at affordable costs.
In line with the terms of an ACO, the deal will be beneficial to both the entities. While Humana will benefit from the knowledge and strong foothold of King’s Daughters’ in Madison, the latter will be able to focus on wellness, prevention, and disease management.
This transaction reflects Humana’s transition to value-based healthcare from the traditional payment-for-services system for successful population health management. This pay-for-value model is an emerging system that emphasizes more on patient-centric, personalized and affordable healthcare. The system is increasingly gaining popularity and Humana intends to capitalize on the opportunities provided by it with the latest Accountable care arrangement.
Humana has an almost 30-year long history of Accountable Care and serves a huge 1.5 million MA member base. The company boasts more than 900 Accountable Care relationships across 43 states and Puerto Rico. In Jul 2015, Humana and Iora Health declared that they will establish seven new primary care practices in four markets across Arizona, Colorado and Washington to strengthen their Accountable Care arrangement.
Humana currently carries a Zacks Rank #5 (Strong Sell). Some better-ranked stocks from the health maintenance organization (HMO) space are Centene Corp. CNC , Nobilis Health Corp. HLTH and UnitedHealth Group Incorporated UNH . All three stocks hold a Zacks Rank #2 (Buy).
Date: August 27, 2015