Journal of Medicine - Aetna has rolled out a new health-insurance plan with Banner Health that will pay the health provider based on measures of quality, efficiency and patient satisfaction.

The Aetna Whole Health insurance plan, which began Jan.1, is available to small businesses with two to 100 employees in Maricopa County and parts of Pinal County.

Businesses that sign up for the plan will be offered coordinated health care through the Banner Health Network, which will focus on efforts to keep people healthy to lower overall spending on health care.

Under the deal with Aetna, Banner Health Network will be paid based on measures of how well it improves patients' health, coordinates care and reduces health costs.

The Aetna plan offered through Banner Health Network is the state's first commercial-insurance plan under a new model of health care called accountable-care organization.

Accountable-care organizations are billed as an alternative to health care's traditional fee-for-service model, which critics say rewards doctors and hospitals based on the number of tests and procedures they perform rather than a patient's overall health.

"In the commercial market right now, everyone is struggling to control costs while making sure people get the best health-care quality possible," said Charles Kennedy, chief executive officer of Aetna's Accountable Care Solutions. "I think ACO's (accountable-care organizations) will play an important role in that."

Accountable-care organizations are one part of the nation's new health law that seeks to improve quality and lower costs.

The Centers for Medicare and Medicaid Services will soon award an ACO pilot program to 30 health providers nationwide. The agency that oversees Medicare is negotiating with Banner Health for an ACO pilot program in Arizona. Banner Health said it has not yet signed a contract with the federal government.

Chuck Lehn, Banner Health's vice president of benefits and managed care, said the Aetna plan and Medicare's plan emphasize coordinated, quality care.

Lehn said the Banner Health Network, a newly formed physicians network, will seek to lower costs and provide better quality care by promoting wellness and identifying health risks. If doctors can manage or treat health problems before they worsen, patients are less likely to require a costly stay in a hospital.

"We want a better process for engaging people in their health," Lehn said.

Aetna representatives said the health-insurance plan may interest small businesses.

Kennedy said Aetna is now discussing its ACO plan with Arizona small businesses. He expects it will be a popular option for companies seeking to trim health spending, adding that the typical premiums will be about 10percent less than the average PPO premiums.

"We think it will sell quite well," Kennedy said.

The plan is another example of insurers forging close ties with health-care providers in Arizona to offer discounted health care.

Health Net of Arizona also struck a deal with Banner Health to sell a new health-maintenance-organization insurance plan that allows businesses and their workers access to discounted care if they agree to limit their network of health providers.

The so-called narrow network plan restricts options for consumers when compared with PPO plans, but the plan is also less expensive, according to Health Net.

Health Net has offered similar narrow network plans in California to large and small employers. Other private health-insurance companies are also exploring such narrow network plans in Arizona, too.

Donna Davis, chief executive officer of the Arizona Small Business Association, said the rising cost of health care and health-insurance premiums have been problematic to small businesses seeking to reduce expenses in a stagnant economy.

"The cost of health care overall" is challenging," Davis said.

"Some (employers) are going without (health insurance). Some are reducing it, and some are making their employees pay more."

"When you are really trying to cut costs, it becomes onerous."



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