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U.S. health insurer Aetna Inc. (AET - Analyst Report) has agreed to form an Accountable Care Organization (ACO) with ProHealth Physicians, Inc. This is in sync with Aetna’s efforts to improve the safety and quality of patient care and make health care more affordable.
An ACO is a collaboration of health care providers who voluntarily form alliances to provide coordinated high quality care to patients. An ACO is accountable for the quality, cost, and overall care offered to members. By focusing on the needs of patients and linking payments to outcomes, the model intends to improve the health of individuals and communities and curb rising health care costs.
The newly formed ACO will serve Aetna’s members who are enrolled in Medicare plans. Aetna will provide the service via its health technology unit named Healthagen. The unit will provide collaborative care management and high end analytics service to serve and manage chronic health issues of the patients.  
The ACO will try to stem the rise of chronic disease among patients by providing them with a care team consisting of care management technology, care managers, and clinical staff. This team will help to prevent manageable health issues thus lowering the chance of any chronic, ongoing disease. 
ProHealth is aiming to provide its patients with quality care within reasonable costs. To achieve this objective ProHealth will apply Healthagen’s payer-neutral population management and integrated solutions among its patient population.  
ACOs or collaborative accountable care is one of the several ways by which President Obama wants to improve the quality of health of all Americans. It is viewed as a tool that would deliver seamless, high quality care for the overall population.
The Health Care Reform called for such an arrangement in order to trim unnecessary expenses associated with the absence of coordination between multiple physicians and other providers. Most Americans with multiple chronic conditions receive care from multiple physicians, and it has been observed that few patients were not taken care of to the fullest extent possible by some physicians. A large percentage of the sick population ended up being victims of medical errors and faced hospital readmissions within days of their discharge. Thus, ACOs were formed to reduce the exorbitant fees which are incurred due to lack of managed care.
Other health insurers like UnitedHealth Group Inc. (UNH - Analyst Report) and CIGNA Corp. (CI - Analyst Report) are also aggressively forming ACOs. Going forward, we expect such patient-centered collaborations to rapidly grow in numbers.
Aetna currently retains a Zacks Rank #3 (Hold). Under our coverage, Coventry Health Care Inc. , among other health care providers, carries Zacks Rank #2 (Buy) and is worth noting.  

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