Aetna HMO Practices Under State Probe
By ANDREW JULIEN
This story ran in the Courant September 30, 1999

In announcing a probe of Aetna U.S. Healthcare's business practices Wednesday, Attorney General Richard Blumenthal waded into a critical question that has been at the heart of the debate over managed care for years:

Do the financial rewards and punishments HMOs use to control costs hurt the quality of care being offered to patients?

"Aetna is being penny-wise and patient-foolish," Blumenthal said, at an afternoon press conference in Hartford. "We are sending a message to the industry that we will scrutinize them closely." Blumenthal said he will look at whether the financial incentives Aetna uses to keep costs down actually hurt patients by rewarding doctors who deliver less care. He said the company's policies, while not unique, are more aggressive than other HMOs.

A top Aetna official said the company is looking forward to explaining its policies and practices to Blumenthal and is confident nothing will come of the investigation.

"We're confident the attorney general will not find the contract violates any law," said Dr. Arthur Leibowitz, chief medical officer at Aetna U.S. Healthcare. "We welcome the opportunity to sit down with the attorney general and discuss the contract or anything else he wants to talk about."

The probe was sparked by complaints raised by the Connecticut State Medical Society about a new contract Aetna is asking doctors across the state to sign. The 7,000- member organization alleged that the contract violates state law and compromises patient care.

A number of doctors have refused to sign the contract, a move that could force patients covered by Aetna to look for new physicians. Neither the medical society nor Aetna could say Wednesday how many doctors are balking, but Leibowitz said Aetna has expanded its network over the last few years.

Of particular concern to the doctors is a requirement that physicians in the Aetna network accept patients enrolled in all Aetna plans, from the most lucrative to the stingiest. Doctors say that requirement could force them to lose money on some patients.

But Leibowitz said the "all products" policy is designed to ensure Aetna members will be able to keep their own doctors even if their employer changes plans. Employers, he said, have been shifting their workers from more expensive plans with greater flexibility to more restrictive plans that cost less.

"We don't think you should have to change your doctor because of a decision an employer makes," Leibowitz said.

Leibowitz also rejected the medical society's allegation that the company's system of financial rewards and punishments designed to control the use of services such as specialists and hospitals leads to inferior patient care.

That question has been debated for years, with Aetna maintaining that its policies are designed to reward doctors who use services wisely and discourage doctors interested in increasing their own revenue.

Leibowitz said the issue isn't so much quality of care, but "physicians, their income and the cost of health insurance in Connecticut."

He said he was surprised by the medical society's attacks, which came in the form of a letter to Blumenthal and full-page ads in newspapers across the state.

"To have them come out of wherever they came out of and launch this is certainly surprising," Leibowitz said. "This was surprising - and it is certainly professionally disappointing."