Aetna, Seattle hospital kiss and make up

The new two-year contract provides fairer compensation for physicians and stability for the provider network.

By Myrle Croasdale, AMNews staff. Feb. 25, 2002.

Only a month after letting its contract with Aetna expire, a large Seattle hospital system has decided to come back to the nation's largest health insurer.

On Jan. 31, Swedish Medical Center signed a two-year deal with Aetna, which faced the loss of 20% of its physician network in Seattle when the system let a previous deal expire on Dec. 31, 2001.

Ron Sperling, chief financial officer of the hospital system, said Swedish let the contract expire because Aetna just wasn't paying enough.

"Clearly, we are getting paid more money," Sperling said of the new agreement. "More importantly, we feel like we are being compensated fairly in relation to what other payers are paying us."

Part of the compromise is the length of the contract, which will run for two years instead of a more customary one.

Don Story, MD, medical director for Aetna, said, "One of our biggest concerns as a health plan was stability for our provider network."

As of Dec. 31, 15,000 Aetna members lost access to one of Swedish's three facilities. By Feb. 20, this number would have risen to 60,000 as other contracts expired, with Aetna members also not able to get coverage with the 2,000 physicians associated with Swedish.

Sperling said doctors were understanding of the situation, despite the disruption. "What we experienced was a great deal of support on the part of the medical staff," he said. "They understood the adverse effect of the lack of a contract, but they knew why we were doing what we were doing." [...]