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Cigna Forms ACO with University Hospitals

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U.S. health insurer CIGNA Corp. (CI) has started a Collaborative Accountable Care initiative with University Hospitals Accountable Care Organization (:UHACO).

University Hospitals is a large Accountable Care Organization (ACO) in the Cleveland area with more than 160,000 members. It caters to a population range from infants to the aged.

Approximately 10,000 customers of Cigna who are covered by the Cigna health plan and receive care from University Hospitals’ 1500 primary care doctors and specialists will stand to gain from the initiative.  

This step is in sync with Cigna’s goal to improve the quality of care and service provided to their customers along with lowering healthcare costs and improving overall value.

Cigna’s Collaborative Accountable Care initiative is similar to an ACO.  An ACO is a group effort by health care providers, who voluntarily form alliances to provide coordinated high quality care for patients.
An ACO is accountable for the quality, cost and overall care offered to members. By focusing on the needs of patients and connecting payments to the service offered, this model intends to improve the health of individuals and communities as well as curtail rising healthcare costs.

Through this program doctors will monitor and coordinate all the aspects of patient care. Patients will get the benefits of the program even as they retain their current physician. The program does not specify any changes regarding referrals to specialists. Patients suffering from long-term diseases such as diabetes, heart disease and obesity are the ones who will benefit the most from the initiative.

The enrollees in the program will have the additional benefit of receiving services of registered nurses. They will coordinate patient care, educate patients about various health conditions, and counsel them on proper health care.

The ACO will also designate care coordinators to work closely with patients and monitor the services being offered. They will follow up with their patients throughout, sending reminders about screenings required or recommend direct medical help. At the same time, they will educate patients by helping them to participate in various health and wellness programs and workshops.

Initiatives like ACO or CAC are being deployed to improve the health of Americans as well as to offer high quality health care to patients.

Cigna’s ACO initiative is based on a Patient-Centered Medical Home (:PCMH) program. Through the PCMH, Cigna works to improve patient care with strong focus on collaboration and communication with physician practices.

At present, Cigna is engaged in 75 Collaborative Accountable Care initiatives in 26 states. These programs provide services to more than 760,000 Cigna customers. Cigna initiated its first CAC program back in 2008. Cigna aims to serve about 1 million customers via 100 CAC initiatives by 2014. Along with its newly acquired subsidiary HealthSpring, Cigna has 240 ACO programs in 31 states serving more than one million customers. It has approximately 58,000 participating doctors, which includes nearly 20,000 primary care physicians and nearly 38,000 specialists.

Companies like UnitedHealth Group Inc. (UNH) and Aetna Inc. (AET) are also assertive about ACO initiatives.

Cigna currently retains a Zacks Rank # 2 (Buy). Another stock, Kemper Corporation (KMPR) carrying a Zacks Rank #1 (Strong Buy) is worth considering.

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