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Read Making a Killing

home / healthcare / in the media

The Associated Press
Mar 15, 2001

by RICH HARRIS

Aetna names new head of medical operations

Aetna Inc., still mending fences with physicians over its managed care policies, on Thursday appointed a California HMO executive to the position of chief of medical operations.

Ronald A. Williams, 51, president of WellPoint Health Networks' Blue Cross of California subsidiary, is the third member of a new executive team for Aetna, the nation's largest health insurer.

He joins new Chief Executive Officer John W. Rowe, hired in September, and Chief Medical Officer William C. Popik, who moved to the company earlier this month. Both Rowe and Popik are physicians.

Aetna also announced Thursday that Rowe would replace William H. Donaldson as chairman on April 1. Donaldson will remain on the board of directors.

Aetna has been sharply criticized for the way it handles claims and governs the services doctors can provide.

The company has also failed to meet Wall Street profitability expectations - although its fourth-quarter 2000 operating earnings of $28.7 million, or 20 cents per share, beat analyst forecasts of 16 cents per share.

After unusual items - including charges related to the sale of its international and financial services operations to Dutch conglomerate ING - Aetna reported a fourth-quarter loss of $406.3 million, or $2.87 per share. Its full-year net income was $127.1 million, or 90 cents per share.

Aetna was among six HMOs sued in February by the Connecticut State Medical Society for their business practices. A group of some 300 Fairfield County doctors threatened last year to sever their ties with Aetna because of the costly and time-consuming paperwork the insurer required. Doctors in New York, Georgia and Texas have also accused the insurer of dragging its feet on paying claims.

Paul Goulekas, an analyst at Conning & Co. in Hartford, said he thought Williams - who was also head of the large group division at Thousand Oaks, Calif.-based WellPoint - would be a good fit with Aetna.

"I've known him over the years at WellPoint; he has a great reputation there, solid and well-regarded," Goulekas said.

Walter Zelman, president of the California Association of Health Plans, called Williams a "very thoughtful, low-key conciliator." Williams had been the group's chairman since June.

"He listens very well, he understands where the differences are and where they're not," Zelman said. "I think he reads people very well."

California consumer activist Jamie Court said he did not know how much involvement Williams had in changes at Blue Cross of California after the formerly not-for-profit insurer was bought by WellPoint.

But Court, executive director of the Foundation for Taxpayer and Consumer Rights, called WellPoint "a company that's really pioneered the for-profit model in ways investors probably like but patients have had a lot to complain about."

Goulekas said he was not surprised by the criticism.

"A lot of consumer activists think a 5 percent statutory margin is too much, but you're running a for-profit company here so you've got to balance those things," he said.

Dr. Robert Lincer, a general surgeon who is head of the group of dissatisfied Fairfield County doctors, said he didn't know what to expect from Williams' appointment.

He said the doctors have not seen much difference in the way Aetna operates since their threat to break away, "but it's a large organization and I'm sure it takes time to change the way things work."

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