What were Aetna’s major problems during the period being analyzed? What were their weaknesses?

Question

What will be an ideal response?

Answer 1

Aetna was involved in a number of lawsuits and lost several big ones. The CEO at the time claimed that factors external to the company such as an ambulance chasing lawyer, a politically motivated judge and a weeping widow caused the huge judgment against them. This caused enormous bad publicity and damaged Aetna's image. Aetna became the poster child for everything that was wrong with managed care. Physicians, patients and stockholders resented their image and their practices. The CEO resigned and Aetna's stock plummeted. Aetna was forced to cut costs, raise premiums and drop unprofitable products. Aetna also had poor relations with doctors- they had to sign up with all of Aetna's products or none at all. The strict preauthorization and utilization review policies made Aetna very unpopular with physicians and patients alike. The weaknesses of Aetna included a bad CEO, poor public relations, poor strategy and execution of operations, and inflexibility with all their clients. They failed to keep in touch with their customers and did not have a handle on the situation. They ranked third out of ten managed care plans for the highest complaint ratio.