Aetna losses not seen as physicians' gain

As the insurer cuts workers in a profit-driven effort, doctors wonder if they'll have to shoulder some financial load for the nation's largest HMO.

By Bob Cook, AMNews staff. Jan. 7, 2002.

Aetna Inc., known to physicians as the big, bad bully of managed care, is struggling to get back up after being knocked on its back financially.

On Dec. 13, 2001, the insurer announced that it would cut about 6,000 jobs this year, on top of the 5,000 it already cut in 2001. This came a month after reporting a $54.4 million loss for the third quarter of 2001, putting Aetna's losses at $92 million through September. No other major, publicly traded health plan is reporting losses; most are reporting profits of more than $2 per share, compared with Aetna's loss of 64 cents per share for the first three quarters for the year.

Doctors long have worried about the power of a healthy Aetna -- the nation's largest health plan in terms of revenue ($19 billion through September 2001). Now they fear that a wounded Aetna will try to use physicians, not in a good way, to heal itself.

"If [Aetna's] alleged financial difficulties result in further reducing reimbursement or further tying the hands of physicians regarding their ability to provide medically necessary care, yeah, that could be a major problem," said Bill Clark, acting general counsel and director of government relations for the Medical Assn. of Georgia.

Hartford, Conn.-based Aetna will not pull out of any cities or product lines with this round of job cuts, which represent 16% of its current base of 37,000.

Previous cuts included a pullback from the Medicare HMO business. Instead, 2,700 customer-service representatives will be chopped, as well as more than 1,100 workers in regional operations such as sales, marketing, patient management and network underwriting, said Aetna spokesman Fred Laberge. Another 580 employees are going from administrative services. Aetna also counts 1,600 positions that won't be filled when employees leave voluntarily, he said. [...]