Humana, FullWell To Enhance Value-Based Care In Colorado

Humana Inc. (NYSE:HUM) recently announced that it has entered in to a value-based agreement with population health leader, FullWell. The main objective of the agreement is to deliver a more proactive and wellness-focused health care experience to Humana’s Medicare Advantage (MA) members in Colorado. This alliance also aims to financially reward doctors for providing high quality care.

Humana forms these value-based relationships to strategically transform healthcare through more proactive and patient-centric high quality medical assistance. Humana’s ability to control costs alongside enhancing its members’ well being has cemented the confidence of its shareholders on the stock. Over the last three months, the shares of Humana have gained 15.01% compared with 14.14% gained by the Zacks categorized Health Maintenance Organization industry.

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This new alliance would enable the MA members of Humana to access more than 150 FullWell primary care providers in the Denver metro area. Through this new value-based agreement, both companies took a step toward the common goal of offering improved healthcare to Humana’s MA members who fall under the coverage of FullWell’s Colorado Health Neighborhoods Network.

Value-based health care is basically a transition from fee-for-service, which prioritized expensive treatments instead of preventive measures. Under the original fee-for-service model, payments of physicians were not based on the health outcomes but on the number of services provided. The shift to the value-based payment models not only ensures overall prevention from diseases, but also reimburses the physicians on the basis of the recovery of the patients they treat.

Along with other medical sector stocks like UnitedJHealth Group Inc. (NYSE:UNH) , Molina Healthcare Inc. (NYSE:MOH) and WellCare Health Plans Inc. (NYSE:WCG) to name a few, Humana has been an early adopter of this value-based healthcare model. As a result, the company managed to lower costs by 20% in 2015 compared with those who still operate with the conventional fee-for-service healthcare model.

As of the third quarter, Humana has 1.8 million individual MA members and 0.2 million commercial members, who are cared for by 49,600 primary care providers in more than 900 value-based relationships across 43 states and Puerto Rico.

Notably, almost 63% of Humana’s individual MA members were treated under the value-based model. The company aims to have 75% of individual MA members in its value-based payment models by the end of 2017.

Under the terms of this value-based agreement, both FullWell and Humana are supposed to frame strategies to improve the quality of healthcare at a low cost for the Humana members in Colorado. Together, the companies are striving to find the gaps in care, manage medication adherence, follow up on patients needing PCP visits, and identify high Emergency Room (ER) seekers and at-risk patients to provide them proper treatment before their condition turns severe. Continuous screening and monitoring of chronic conditions like diabetes and heart diseases are also expected help patients.

Humana presently caries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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