As Hartford, Conn.-based Aetna awaits a ruling over its potential merger with Louisville, Ky.-based Humana, its accountable care organizations continue to impress, according to a report from Zacks Equity Research.
Here's what you should know.
1. Zacks claims Aetna is spending more than 40 percent on value-based care models in its ACOs, and that it's committed to increasing that figure to 75 percent by 2020.
2. Aetna has a "healthy" balance sheet with a historically high reserve.
3. Aetna's risk-based capital ratio is approximately 550 percent and it had $2.3 billion in parent cash at the end of 2016's third quarter. The company is projecting an excess cash flow of $2.4 billion for 2016.
4. Aetna has made several moves throughout the year to decrease its operating expense ratio, and it has been successful through the first nine months. Aetna aims to have its expense around 18 percent lower than 2015 and 2014.
5. The company has an aggressive goal to add $0.20 to $0.25 cents per share to the company's bottom line in 2016.
6. Despite these positives, the company has only gained 6.5 percent after July 21, 2016, whereas the HMO industry is seeing gains of 10.7 percent. Zacks attributes the slow growth to the uncertain merger deal.