“Managed-care companies simply carry out the wishes of their customers, the employers. We’re an administrator, if medical mistakes are made it’s the doctor’s fault, not Aetna’s” Richard L. Huber, CEO, Aetna Inc.
(Gentry C: Aetna Chief Rallies Others To Fight Suits Over HMOs, Wall Street Journal, October 6, 1999).
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 wasreported 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.”
On May 31, 2003 a federal judge in Florida gave tentative approval to a settlement agreement between Aetna Inc. and more than 600,000 United States physicians who accused Aetna of cheating them on payments and interfering with patient care. In addition to a $170 million settlement Aetna agrees to make public its process for paying medical claims and policies on medical treatments and provide physicians with a process to appeal payment denials (Aetna-Doctors Settlement Gets Preliminary Approval, Dow-Jones Newswires, WSJ, May 31, 2003). On October 24, 2003 Federal Judge Federico Moreno of the U.S. District Court (Southern Florida) gave final approval to a $470 million settlement between Aetna and about 1 million physicians who had accused the Aetna (now the United States’ number 3 health insurer) of cheating physicians on payments.
On December 8, 2003 Aetna announced, in a news release, that it will start to offer HSA’s as of January 1, 2004.
In an effort to fix its finances Aetna has jacked up premiums as much as 50% in some cases, raised copayments and, as a result, trimmed millions of people from it’s coverage rolls and has, in the process, become one of the most profitable health insurers
(Martinez B: Behind Aetna’s Turnaround: Small Steps to Pare Cost of Care, WSJ, Aug. 13, 2004).