Aetna
Company: Aetna
Company Description: Aetna is one of the nation's leaders in health care, dental, pharmacy, group life, disability, and long-term care insurance and employee benefits. The company is dedicated to helping people achieve health and financial security by providing easier access to safe, high-quality health care and protecting their finances against health-related risks.
Nomination Category: Company, Office & Product Awards Categories
Nomination Sub Category: Best Business Turnaround
Nomination Title: Aetna
Tell the story about what this nominated company achieved in 2003 (up to 500 words). Focus on specific accomplishments, and relate these accomplishments to past performance or industry norms. Be sure to mention obstacles overcome, innovations or discoveries made, and outcomes:
By size alone, Aetna did not seem to be a company in crisis in the late 1990s. On
the contrary, Aetna had grown to become the nation’s largest health insurer
through several acquisitions intended to lead to financial efficiency. Unfortunately,
the girth of the company proved more problematic than predicted. Physicians
complained of low reimbursement rates. Hospitals threatened to exit networks.
Profitable membership flocked to rivals.In 2000, the leaders of Aetna set out to slim and strengthen the company. Aetna
sold its international and financial businesses to become a stand-alone health
benefits company, the first step in a formidable turnaround effort to resolve its
serious operational and financial issues.Tapping Dr. John W. Rowe as its new leader marked an important step in the
company’s commitment to improve its strained relationships with physicians and
hospitals. “There are 150 things that have been wrong. We’re going to fix these
things one at a time,” he said.Rowe envisioned a new strategic direction for Aetna: a massive restructuring
focusing on profitability as opposed to size. Based on a market segment strategy,
it identified customers whom Aetna could serve effectively and profitably.Critical to its execution was a strong and balanced leadership team. Ron Williams
from rival WellPoint joined Aetna and stressed a “back to basics” approach to
achieve operational excellence. Under his leadership, the company increased
efficiency of claims payments, enhanced patient and disease management and
negotiated better contracts with health care providers.Key to profitability was controlling the relentless rise of medical costs, a trend
plaguing the industry. These costs significantly contributed to operating losses,
were difficult to predict and outpaced the company’s increases in premiums. But
eventually, Aetna managed these costs with higher deductibles, eliminated
unprofitable membership and reduced expenses.These efforts propelled Aetna to achieve higher-than-expected operating earnings
in 2002 after posting losses throughout 2001. The company announced
gains of $2.03 per share in the first-quarter of 2003, $1.28 per share in the
second quarter, $1.29 per share in the third quarter and $1.50 per share in the
fourth quarter. Aetna’s stock price has hovered near $80 since February, 2004,
compared to being near $25 in May 2001.Aetna is now seen as the leader in improving physician relations. Following a May
23, 2003, landmark agreement with 700,000 physicians, the company settled a
national class action suit and launched a new era of cooperation with doctors. The
agreement will streamline communication between physicians and Aetna, reduce
administrative complexity in the claims payment system and help improve the
quality of the health care system.The company has demonstrated innovation in its business by offering a consumer-
driven health plan giving members more control of their health care options and
spending. Aetna has taken a leadership role in broader health care issues such as
addressing racial and ethnic disparities in health care and promoting guidelines for
genetic testing.Aetna employees recently joined in celebration of company’s 150th anniversary in
June, a milestone signifying the rebirth of a company that has restored the pride
after two years of hard work and intense scrutiny. Aetna aims to sustain this
momentum, and re-emerge as the industry leader, positioning itself for long-term
growth.
List hyperlinks to any online news stories, press releases, or other documents that support the claims made in the section above. IMPORTANT: List each link on a separate line, begin each link with http://, and enclose each link in square brackets; for example, [http://www.website.com]:
Aetna’s Business Profile
http://www.aetna.com/guide/businpro.htmAetna in the media
“Aetna Agreement with Doctors Envisions Altered Managed Care,” New York
Times, May 23, 2002
http://www.aetna.com/legal_issues/saying/20030523.htmAetna on the Issues
Aetna Reaches Agreements with Physicians and Dentists
http://www.aetna.com/legal_issues/suits/agreement.htmlConsumer-Directed Products
http://www.aetna.com/business_issues/product_innovations.htmGuidelines for Genetic Testing
http://www.aetna.com/news/2002/pr_20020617.htmAetna’s press releases
“Aetna Expands Consumer-Directed Product Suite,” July 2, 2003
http://www.aetna.com/news/2003/pr_20030702.htm“Physicians and Aetna Begin New Era of Cooperation,” May 22, 2003
http://www.aetna.com/news/2003/pr_20030522.htm“Aetna Reports Second Quarter 2003 Results,” July 30, 2003
http://www.aetna.com/news/2003/pr_2ndquarter2003_earnings.htm“Aetna Reports First Quarter 2003 Results,” April 24, 2003
http://www.aetna.com/news/2003/pr_1stquarter2003_earnings.htm“Aetna Announces Initiatives to Reduce Risks Associated with Racial and Ethnic
Disparities in Health Care,” March 5, 2003
http://www.aetna.com/news/2003/pr_20030305.htm“Aetna Launches Next Generation in Aetna HealthFund Family of Products,” July
11, 2002
http://www.aetna.com/news/2002/pr_20020711.htm“Aetna Recommends Guidelines for Access to Genetic Testing,” June 17, 2002
http://www.aetna.com/news/2002/pr_20020617.htm“Aetna Reports First Quarter 2002 Results,” April 25, 2002
http://www.aetna.com/news/2002/pr_1stquarter2002_earnings.htm“Aetna Launches Aetna HealthFund to Expand Consumer Choice and Decision
Making,” September, 19, 2001
http://www.aetna.com/news/2001/pr_20010919a.htm“Aetna Reports First Quarter Operating Results (2001),” May 10, 2001
http://www.aetna.com/news/2001/pr_20010510.htm“Aetna Names Ronald A. Williams Executive Vice President and Chief of Health
Operations,” March 15, 2001
http://www.aetna.com/news/2001/le_pr_20010315a.htm“Aetna Names Dr. John W. Rowe President and CEO of Aetna,” September 5,
2000
http://www.aetna.com/news/2000/pr_20000905.htm“Aetna to Sell Financial Services and International Businesses to ING for $7.7
Billion,” July 20, 2000
http://www.aetna.com/news/2000/pr_20000720.htm
Provide a brief (up to 100 words) biography about the leader of this nominated company:
John W. Rowe, M.D., Chairman and CEO of Aetna, has overseen one of the
biggest turnarounds in recent corporate history since his arrival in 2000. A former
head of Mount Sinai NYU Health and a renowned gerontologist, he has returned
Aetna back to profitability, restored the pride and recaptured the company’s
leadership position in the industry. He is widely regarded as an opinion leader in
broader health care issues, such as genetic testing and ethnic and racial
disparities. He is a member of the Institute of Medicine of the National Academy of
Sciences and the Medicare Payment Advisory Commission.