No more "all-products": Some lessons in Aetna's offer

Aetna's decision to drop its much-disliked "all-products" clause carries a powerful message about the power of physician unity and the current state of managed care.

Editorial. Jan. 29, 2001.

Aetna Inc. says that physicians no longer have to put up with its much-disliked "all-or-nothing" clause. At least that will be the case once physician contracts renew, and if those doctors make a point to ask at least 90 days in advance of the renewal -- in writing -- that the provision be dropped.

More on the details later; first let's give credit where it's due. No so long ago, "all-or-nothing" -- the contract clause, also known as "all-products," that required physicians taking Aetna's desirable PPO lines to also sign on for its lower-paying HMO products -- was dogma at Aetna. It was an especially grating edict to physicians, one that made them complicit in maneuvering their patients into more heavily managed care. Then, last year came a turnover in Aetna's top management and with it a pledge to improve relations with physicians, with an end to the "all-or-nothing" requirement as one of the welcome improvements.

Now back to those details: Although Aetna reaps much of its public relations boost all at once, it appears that most physicians will have to wait a while longer to benefit.

New Aetna contracts won't carry the provision. But Aetna has contracts covering nearly 300,000 physicians already in place. Those contracts renew on the anniversary date, whenever it falls during the year, and the "all-or-nothing" change can't be made effective until then. So many doctors presumably will be waiting months for that date to come around.

While on the subject of details, another one worth noting is that Aetna won't rule out the option of paying physicians and groups differentially based on whether they remain with all products. What Aetna may consider an incentive may be what physicians see as coercion if the pay differences get to be too great. It's a development that bears watching.

What's more certain is that although Aetna got the headlines, it was medicine that got the victory. "It was the one common theme in a lot of our discussions ... across the country," according to an Aetna spokeswoman. The AMA has long targeted "all-or-nothing," and so have other parts of organized medicine, especially state medical societies. Of special note are physicians who went beyond complaining and walked away from Aetna contracts.

In sum, it is a remarkable show of unity by the medical profession, in an era when the focus is so often on conflict within the House of Medicine.

The timing was also right. In Aetna's case, it was a sagging stock price that brought in the new, more receptive management team. (Aetna's share price has since largely rebounded.) But Aetna and all health plans are facing a constellation of factors that are changing the way they do business.

Recourse for public and professional exasperation at managed care is no longer limited to yelling at some clueless clerk on the other end of the phone line. Lawsuits and patients' rights legislation, even if still largely unresolved, have had a major impact on managed care by raising the specter of liability for plan decisions. Rigid preauthorization review is slipping away.

Increased retrospective review of physician practice is gaining ground -- paired, plans say, with friendly persuasion on utilization. But physicians are bound to be suspicious that health plans will use profiling to either sanction or deselect doctors -- only last month we reported on a physician who filed suit claiming a health plan did just that -- who fall outside company-set limits. (Aetna strongly maintains that it does not use profiling for deselection purposes.)

In the meantime, health plan premium rates are posting their biggest gains in years, Aetna's will be as high as 13%, and some smaller plans are asking for more. It comes at a time when there is a whiff of recession in the air, meaning lower profits for businesses and an easing labor shortage; cost-trimming Aetna announced its own layoff of 5,000 workers. It may mean more employer pressure on health plans to cut costs, an increase in the number of those who are uninsured, or even a large-scale shift to a voucher-style defined benefit for workers who will then choose their own plans. All raise important issues for patient and physician alike.

Expect a lot of twists and turns to come and much of what matters will be in the details. How effectively the medical profession has a voice will depend in large part on the unity it shows. Both were lessons learned from the decision about the "all-or-nothing" clause. Consider it a bonus from Aetna, even if that might not have been what the firm had in mind.