I Like What Aetna's Been Doing

Monday, March 24, 2008 | 0

By Joe Paduda

Wellpoint has been slammed (justifiably) for its rescission practices (retroactively canceling insureds' policies when they have the temerity to actually get care) and sued for allegedly inflating earnings expectations (although some of the slamming is, in my view, unjustified).

United Healthcare has also crossed the stupid line a time or four, inflating the CEO's compensation package by back-dating stock options and fumbling the acquisition and integration of Pacificare, publicly fighting with providers (although occasionally I have to come down on UHC's side) and mishandling customer complaints.

HealthNet has not escaped unscathed either. The company went way way past the stupid line when it actually paid bonuses based on executives' success in canceling individual policies (but only for individuals with high claims).

Aetna has been able to avoid embarrassing itself, while making some significant strides in areas that matter. Whether its chronic disease management, sharing data re provider quality and price, or publishing data on outcomes, the huge insurer is moving in the right direction.

Aetna has also been able to build a substantial presence in the work comp network business, essentially forcing its largest competitor to replace its networks with Aetna's (while sticking with WC despite doubts among industry experts (that would include me) that Aetna had the patience required to survive and prosper).

Their latest move also makes sense - Aetna is investigating a P4P model for pharma, potentially basing payment on efficacy for the wildly expensive specialty drugs.

Perhaps this is partially due to lessons learned after the company's well-publicized stumbles after merging with USHealthcare a decade ago. For a while, the staid, customer-oriented culture at the old mother Aetna looked to be overwhelmed by the aggressive, no-holds-barred, occasionally-downright-nasty USHC approach. Management righted the ship just in time, and Aetna has enjoyed better relations with providers, solid financial returns, and growing membership for several years now.

As one reader pointed out some months ago, mother Aetna is certainly capable of doing much more - pushing disease management further and faster, becoming more aggressive on P4P, and building out its member services applications.

But compared to its competitors, Aetna is doing well. Sure, the stock is down by 25% so far this year, but that's a result UHC, Wellpoint, HealthNet, Humana, and Coventry owners would take in a heartbeat.

<i>Joe Paduda is a principal with Health Strategy Associates, an employers consulting firm. His web blog, www.managedcarematters.com, covers managed care for group health, workers' compensation and auto insurance, health care cost containment, health policy, health research, and medical news for insurers, employers, and healthcare providers.</i>