On February 25, 2000 Richard L. Huber, suddenly resigned as chairman and
chief executive of Aetna Inc. and was replaced by William H. Donaldson (Gentry
C, Waldholtz M: Aetna's New Chief Donaldson Pledges to "Rebuild Lost
Confidence", Wall St. Jour., February 28, 2000).
On March 23, 2000, from documents filed by Aetna, Inc. to the
Securities and Exchange Commission of the United States Government, it was
reported that former Chairman and Chief Executive Richard L. Huber, will
receive a severance package totaling $43.6 million. (Gentry C, Bennett J: Aetna's Ex-CEO To Get $3.6 Million
In Severance Pay, Wall St. Jour., March 23, 2000).
On May 11, 2000 it was reported that William Donaldson, the new chief
executive of Aetna, Inc. announced that his firm now plans to begin
to stop playing "hardball" with patients and physicians, starting in the
State of Connecticut. The suggested changes are listed:
Elimination of capitation contracts with physicians
Relaxation of the mandatory "all-products" requirement which
requires physicians to participate in all of Aetna's plans (including HMOs
and Medicare plans)
To allow specialists to act as primary care physicians for seriously ill
patients
To allow physicians and patients to appeal more coverage decisions
(Bennett J; Aetna Eases Rules in Connecticut As It
Mends Managed-Care Fences, Wall St. Jour. May 11, 2000)
Aetna is "trying to become a kinder, gentler
health plan" and not squeezing doctors and hospitals as much as it
used to. "Earnings in Aetna's health-care unit plummeted 41% to
$77 million, mostly as a result of hemorrhaging in its Prudential
HealthCare business, which the company acquired last year.
Prudential's medical cost were significantly higher than
expected." In their most recent quarter Aetna's medical costs
rose about 10% which was well ahead of the 7-8% increases reported by
other managed care companies.
(Martinez B: Aetna Posts Drop in Net, but Stock
Jumps 8.5%, Wall St. Jour. November 2, 2000)
On December 18, 2000 Aetna Inc., the nations' largest
health insurer, whose stock value has lagged compared to its competitors,
announced that it would cut 5,000 jobs and shed unprofitable businesses
and customers in 2001. (Star Tribune, December 12,
2000)
In the February 23, 2001 Wall Street Journal it states that Aetna
now "concedes that many of U.S. Healthcare's tactics, as well as it's own
public posturing, simply made no sense." (Martinez B: Aetna Tries to Improve Bedside Manner in Bid To Help Bottom
Line)
In January, 2001 Aetna's stock was at $42.69/
share. On April 12, 2001 it was $29.80/ share reflecting a sudden
change in Aetna's financial predictions from "rosy" to a
possible loss position for the first quarter of the year. On Friday,
April 13, 2001 Aetna's chief financial officer, Alan Weber, resigned.
(Martinez B: Aetna's Chief Financial Officer
Resigns, As Stock Moves Lower on Profit Warning)
Aetna has initiated "a vast management
overhaul" to help its struggle to address the eroding value of their
stock, rising medical costs and "angry doctors and patients."
(Martinez B: Aetna to Expand Its Catalog of
Health-Plan Products, Wall St. Jour., July 30, 2001)
On February 21, 2002 the Wall Street Journal reported
that a federal judge in Miami, Florida refused to dismiss claims that
Aetna, Inc. and the nation's other health insurers violated federal civil-racketeering
laws by employing hidden financial incentives for physicians to deny
treatment and cut costs. (Geyelin M: Judge Rules
Claims Can Proceed In Lawsuits Against HMO Sector, Wall St. ., February
21, 2002)
In response to President Bush's advocacy of a
stronger, more patient oriented health care system Aetna Chief of Health
Care Operations, Ronald Williams, noted, in a letter to the Wall Street Journal
Editors (February 26, 2002)
that: "While not everyone likes or wants certain
types of benefit plans such as HMOs, we need to remember that for some
consumers they are the right choice."
|
