The short answer is – it got combined with other sorta-kinda related businesses and put under one boss – Dan Fishbein, MD, in the “New Product Businesses” unit.
According to an Aetna Communications staffer;
“AWCA is part of the New Product Businesses area, which also includes the Cofinity, Aetna Signature Administrators, Pet Insurance and Worksite Health businesses. The former PPOM business, is part of Cofinity. All 5 businesses (including AWCA and Cofinity) now have a common reporting structure in the New Product Businesses area.
These changes will help Aetna identify and successfully execute strategies for new distribution channels, business models, partnerships and products and generate substantial growth for the company. The AWCA business is an important part of this strategy.”
Up until Monday, AWCA (Aetna Work Comp Access) was a separate business unit, with its own leader (Pat Scullion), operations head (Shawn Fisher) and sales leader (Tom Shivers). AWCA also had a network management function, account management, and other support housed within the unit. In the new structure, network management and operations for work comp will be handled by two units also responsible for Aetna’s group health TPA and PPO businesses headed up by Mark Granzier. Here’s how Aetna’s internal announcement put it “All network functions in these businesses will be realigned to Mark. This will enable us to have a single area focused on contracting and provider relations, and to leverage these resources efficiently across our businesses.”
Sounds good in an announcement, and here’s hoping Aetna figures this out. Unfortunately, other companies’ attempts to integrate work comp functions with group health haven’t fared so well, as the contracting staff usually doesn’t ‘get’ work comp; work comp is usually a relatively small part of the overall business; and network negotiators tend to use WC as a bargaining chip, giving away discounts there to get a better group health discount. This can be particularly problematic for hospital and facility contracts, where work comp is a big profit maker for hospitals (while generating higher loss costs for payers).
This isn’t idle speculation. It’s based on personal experience within the old Travelers, MetraHealth, and UnitedHealthcare. I’ve also been privy to hospital negotiations – from the provider side – and watched the big networks cave on comp to get a slightly better deal on the group side.
Sales and account management will be the responsibility of Michael Ciarrocchi who has been named the General Manager for the three businesses. There is no real need for a de facto sales force for AWCA, as the network is being sold (pretty much exclusively) through Coventry. There is a big need for upgraded customer service, as there continue to be issues related to data quality (inaccurate provider data, particularly in Pennsylvania) and AWCA’s historical responsiveness has been less than stellar.
Reporting will be handled by a unit headed by Mike Kane that will service all the businesses (the three mentioned above, plus Aetna’s Pet Insurance and Worksite/Direct2you units). I’m not sure how this benefits AWCA’s customers. Although a common reporting platform would likely be beneficial, there is little other synergy. AWCA customers access network discounts via electronic feeds, and there is no ‘outcomes’ data to be aggregated or mined as the payments, claim records, and bill detail data are housed on customers’ systems.
From a business management perspective, it’s understandable that Aetna decided to cut costs and reduce overhead on a (relatively tiny) business unit that essentially serves one customer with one product. Remember this is a company with annual revenues of $25 billion; it is unlikely AWCA’s revenues were more than two-tenths of a percent of that total.
Work comp just isn’t material.
I’d note that Aetna is perhaps the only big managed care firm that is positioned well for the long term. Their investments have been smart (PPOM, Schaller Anderson), their initiatives in transparency and consumerism are well thought out and (mostly) well done, they have solid people who strive to do the right thing (other health plans also have a lot of good people; Aetna’s workforce seems to have more of them), and they are willing to admit mistakes and work hard to rectify them.
That said, many big work comp payers are relying on Aetna to help them manage their medical expenses. And this move makes many of those payers very nervous.
Click below for the full text of Aetna’s internal announcement on AWCA.
Aetna internal announcement
The following message is to inform you of the new name for our collective businesses, a new operating model and several significant organizational changes.
Aetna Signature Administrators (ASA), Aetna Workers Comp Access (AWCA), Cofinity, Pet Insurance and the Worksite/Direct2you businesses are now collectively called New Product Businesses. This new name reflects our common purpose of developing and nurturing businesses to generate significant earnings for Aetna. By identifying and successfully executing strategies for new distribution channels, business models, partnerships and products, we will generate substantial growth for the company.
In order to fully realize these objectives, we need to pursue our businesses with the following key principles in mind:
* Approach our business opportunities in ways that are fully consistent with The Aetna Way.
* Honor all of the company’s commitments to providers, business partners, customers, members and our own employees.
* Leverage existing resources within the company whenever possible, through exceptional collaboration.
* Deliver our programs as efficiently as possible, while delivering service excellence.
* Produce excellent earnings in return for the investments in dollars, resources and risk that the company makes in our new businesses.
In order to position ourselves to fully realize our considerable potential, I am pleased to announce a new operating model and associated organizational changes, effective immediately.
General Manager, ASA, AWCA And Cofinity
We are creating the new position of General Manager of ASA, AWCA and Cofinity. I am pleased to announce that Michael Ciarrocchi will fill this key role in our organization, reporting to me. Michael will be responsible for the overall P&L of ASA, AWCA and Cofinity, and will directly manage all functions associated with the growth of these businesses, as well as certain key business units.
Head Of Networks, ASA, AWCA And Cofinity
I am also pleased to announce that Mark Granzier will assume the role of head of Networks for ASA, AWCA and Cofinity, reporting to me. All network functions in these businesses will be realigned to Mark. This will enable us to have a single area focused on contracting and provider relations, and to leverage these resources efficiently across our businesses.
Head Of Operations, ASA, AWCA And Cofinity
We are creating a single area to manage all operations and technical support functions for ASA, AWCA and Cofinity. This will enable us to leverage common resources and technical solutions for similar functions across our growing businesses. We are in the process of filling this role, and expect to be able to announce this new leader shortly.
On a short-term basis, Kelly Wright will assist me by leading an operations leadership work team.
Head Of Strategic Initiatives, Planning And Analysis
We are creating a new unit to deliver best-in-class services to all of our businesses in strategy, project management, analysis and reporting. By combining existing units from across our businesses into one shared unit around these functions, we will be able to offer a much higher degree of service and resources, as well as better opportunities for those in this unit. This unit also will handle strategic planning, planning and performance, and project management.
I’m pleased to announce that Mike Kane has agreed to take on this critical new role. Doug Wilson will be announcing how Mike’s prior functions in his organization will be realigned.
Pet Insurance
We are in the process of hiring a leader for this exciting new business, who will report directly to me. On an interim basis, Lee Griffin will be working full time as project manager for this initiative.
Worksite Health
I am pleased to announce that Jeff Brower is formally joining our organization as head of the developing Worksite Health/Direct2you business. Jeff had been managing this initiative as a project, graciously on loan from Meg McCabe. Jeff also has agreed to manage the integration activities that are part of our new operating model, and he will report to me.
Business Partners
* Deb Wilson and her Marketing Communications group will be joining the Product Group Marketing organization led by Karen Weinseiss. In this new expanded role, Deb and her team will support all of the New Product Businesses. Deb will have a dotted line to me and will be a member of my senior team.
* Michele Abrams and Pete Stanton will provide finance leadership for New Product Businesses. Both Michele and Pete will have dotted lines to me and be members of my senior team.
* Pam Filipowicz will be the Human Resources Business Partner for New Product Businesses.
* Legal and Compliance support: John Loxterman will lead our Business Compliance resources on an interim basis. Cindi Bates will continue to lead our legal support.
As part of these changes, Pat Scullion, Tom Shivers and Shawn Fisher will be leaving Aetna. I want to thank them for their contributions to the development of the AWCA business. Please join me in wishing Pat, Tom and Shawn well as they move on to new opportunities.
Please also join me in congratulating those who are taking on additional responsibility and new roles in our organization. This is an exciting time for Aetna and in particular for the New Product Businesses. We have the support of the senior leaders at Aetna, and the work we are doing will make a significant contribution, while providing best-in-class products and service to our constituents. Thank you for your continued effort and patience as we work through these changes.
