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Aetna Inc. Message Board

  • TxAggie60_60 TxAggie60_60 Jun 1, 1999 7:30 PM Flag

    Negative Press-Dallas Morn. News

    The Dallas Morning News today has as the Business
    Section front-page headline "Physician disputes with
    Aetna escalating" followed by "Doctors'threats to quit
    network spread Nationally."
    It goes on to say,
    "Aetna's Woes....Disputes between Aetna/USH and the
    medical community are breaking out nationwide." Cities
    named are Philadelphia, Charleston, WVA,Louisville, San
    Mateo, CA, and Dallas. It also says "From Califirnia to
    Pennsylvania, Kentucky to West Virginia, doctors and hospitals
    are dropping out of Aetna's managed care network
    because of what they call unreasonable fees, troubling
    contract provisions and a lack of trust in company
    management." And it says that "He [Ky. Ins. commisioner]has
    ordered a hearing next month to determine whether Aetna's
    refusal [to extend current contracts]causes public harm."
    No mention was made that others are joining the
    Aetna network, nor does the writer credit Aetna for
    some of the positive recognition it has received. The
    impression that the article leaves is contrary to Mr. H's
    comments that Aetna is "getting somewhere" and that it is
    "hitting on all cylinders." I dread the thought that this
    article might have substance. Are we in for another
    surprise? At least the article mentioned that Aetna and
    Jefferson Health System reached agreement (announced by
    Aetna last week). It pointed out that some stock
    analysts view favorably Aetna's stance and they believe
    other insurers will follow. This is one of many
    negative articles on Aetna by DMN. I have no respect for
    the DMN. But, I still say that the time has come for
    Aetna to do more to get its story out. I do not believe
    that Aetna does a good job on the public relations
    front. As I have said before, I have been entirely
    satisfied with Aetna.....except as a long-term stockholder.
    Fair is fair.

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    • its rare to buy a company like this at almost book value.

    • Do you think Aetna and perhaps the whole HMO
      industry could bring some sort of proactive response to
      Gore's HMO bashing? What is the strategy for dealing
      with this type of political grandstanding? One idea
      would be to immediately announce a new health plan
      option that would provide members with all the
      "patient's bill of rights" items that many of the anti-HMO
      politicians espouse. However, it would be the "rolls royce"
      of health plans and due to additional costs/risks
      (like any other insurance when there are higher risks)
      the premium/co-pays, etc. would be higher than the
      normal no-frills plan. Am I all wet? Perhaps, those who
      can't afford the additional premiums for such a plan
      can be subsidized by government through vouchers
      (like food stamps).

    • the past few sessions, UNH has fallen just as bad
      or worse on a
      % basis..CI hasn't but I believe
      that's because they are not a
      "pure HMO" play like
      UNH and to a large extent, Aetna is. So,
      I'm
      infering that this is more of concern & uncertainty about
      our friends in D.C. and building momentum even in
      Republican ranks, for patient's "bill of rights"
      legislation.

    • today. That's pathetic-just pathetic! EOM

    • the oxford board has a post (#7600) with a rumor that the Anthem (BC/BS Ct) CEO has resigned. Anybody hear that?

    • thanks for your latest posts. I had seen the
      12/10/98 announcement including Mr. H's remarks. Ok for
      then, but for now, I say give us some facts. In Dec. we
      were told that Pru would be 1) a $1B deal, 2) it would
      add 6.6 million members,
      3)it would "immediatley"
      (on closing, I presume) add to shareholder value(it
      did?) and 4) cost savings and synergies
      will total
      $130-$150 million after tax "within two plus
      years."
      (Say what? Within two plus years? After my experience
      as a long- term investor, I can't help but wonder
      what "plus " means.) Of course, I think Mr. H thinks
      the Pru is a good strategic move. And Mr. Compton
      thought that USHC was a good move at a fair
      price(Mr.
      H has said something like "that without USHC, AET
      would be history." That makes me wonder how CI has
      managed to survive?) And, I'm sure that Mr. Lynn thought
      going heavy in real estate mortgage loans was the thing
      to do. And I'm sure that Mr. Filer thought that
      buying Geosource (well servicing) in the early 80's was
      a great move (Geosource bit the dust very soon
      after AET got taken on that deal). I do not want to
      sound so critical or cynical; I'm just recalling a bit
      of AET history.
      I still say that AET should give
      the analysts some hard-hitting facts and figures. And
      I still say that AET does a very poor job in that
      area. (Again I'll mention the conference call with
      analysts and Mr. H and Mr. C after the NYLCare deal; that
      was a weak performance if ever I heard one.) I'm all
      for AET being a big success-a lot riding on it. It's
      time to see some real shareholder value!

    • assume that Huber BELIEVES the Pru deal to be
      beneficial..but it's also reasonable and prudent for Tex, myself
      and many others on this board to be "respectfully
      skeptical" until proven otherwise. The reasons have been
      articulated by others already, but for my money (and it IS my
      money,and yours also I presume)they are: MIS system
      integration issues,and especially provider
      contracting
      issues...my understanding was that Pru was much "looser" on
      that end both in utilization/risk management and
      cost-effective contracts. Those issues make or break the profit
      picture for HMOs and PRU couldn't wait to get out from
      under them
      I hope you're right, but time will
      tell...

    • Tex, perhaps you should visit the aetna website
      for information. On December 10, 1998, AET announced
      the pending purchase of the Pru health business. In
      that release, detailed financial data was provided. In
      case you can't find that particular release, here's
      the URL:
      http://www.aetna.com/news/1998/pr_19981210.htm
      Your questions seem to suggest that Mr. Huber should
      announce to shareholders whether AET's acquisition of Pru
      was a good or bad economically. Mr. Huber is a
      brilliant financial strategist. Do you believe for one
      moment he would purchase a company he didn't believe
      would add shareholder value. The very reason for the
      acquisition, it would seem, is to enhance value; to move the
      needle forward.

    • The Pru deal was A LOT better than the USHC deal
      for Aetna's bottom line. Aetna bought USHC for their
      management, and essentially handed the reigns over to them.
      They paid close to $1000/member for USHC, and
      $200/member for Pru (my own napkin calculations).


      Compton was an ass. He completely signed away the
      managerial rights to the combined company and paid a HUGE
      premium in the process. That (Aetna) money is ancient
      history. The former CEO of USHC (forgot his name...)
      pocketed over a billion dollars on the deal and is
      probably living on his own island right now...

      On
      the other hand, the Pru deal was excellent for Aetna.
      They should be able to make their small plans
      profitable now in several markets, and add considerably to
      their national account business. There is a danger of
      driving away too many employees who are frustrated with
      all of the consolidation, but I'd still give Aetna an
      ACCUMULATE rating right now. 77 is a good price.

    • you may be right in observations as to how Mr. H
      comes across...or doesn't come across. Maybe he isn't a
      media expert. (Ron Compton was, in my opinion a
      disaster in that regard. But he's another story!) But what
      gets to me most is that nothing meaningful is said-or
      at least I don't hear or read about it. Still mixed
      signals on the Pru deal. Is it a good deal with better
      than average potential and low risk as one analyst
      reported; or is Prudential saying "Aetna, Glad I Met Ya"
      for taking a loser off its hands for a premium price?
      Rather than clarification or anyhing with conviction
      from AET, it is silence. Is a lot of the goodwill
      related to USHC worth anything? Rather than clarification
      or reinteratrion from AET, it is silence. (I suppose
      they figure as long as they are silent, we are to
      believe that all of the goodwill is a real asset.) AET
      does, in my opinion, have a problem establishing and
      maintaining credibility. And has had for years. It will take
      numbers, rationale and results. And it also takes some
      people who can talk some sense and back up what they
      say. Just wondering: Why has CI stock run circles
      around AET's? I wish AET's top management and board
      would get their heads out of the sand....or the clouds.

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