Among the loyal readers of ManagedCareMatters are more than a few with Coventry email addresses. I consider a few to be personal friends, know some quite well, worked with others, and have heard good things about many.
I know Coventry has a strict don’t-do-it-or-you’re-fired policy against talking with the media – a category that includes yours truly. That’s dumb.
This is a big mistake on the part of Coventry management. In the four and a half years I’ve been publishing this blog, I have reached out to several individuals within Coventry, as well as soon-to-be former CEO Dale Wolf many times in an effort to get their side of the story – and have been rebuffed each time. So, I’m left with what I gather from customers, competitors, investor calls (I own stock in Coventry), and my own intuition and interpretation thereof. Most of that isn’t pretty, or more accurately hasn’t been pretty lately. But there is another side to the story, and Coventry management’s myopic media strategy means the fifteen hundred readers stopping by every day don’t get to hear that side.
The company is going through a very tough time, and may well be broken up and/or sold off. Customers on the work comp side are none too pleased with management’s ‘my way or highway’ approach, and many are looking hard for alternatives. Brokers are frustrated with what they perceive to be a “screw everything but the medical loss ratio” marketing ‘strategy’, which they view as nothing more than an attempt to show Wall Street that management is fixing the problems created by underlings. Employees from among Coventry’s acquisitions have found things to be much different than they were led to believe (or perhaps than they led themselves to hope).
All this hides what would otherwise be a decent success story. The secondary market strategy for the small group HMO business made, and makes, sense. The distribution strategy worked reasonably well, as did pricing discipline. Some of the work on Medicare Advantage was creative and intelligent. The forays into the individual market boded well for the coming of national health reform. Unfortunately, these good moves, and the people who drove them, have been overshadowed by the big mistakes made by management.
Here’s the ugly truth – and it reflects not on you, but on Coventry management. Their arrogance and hubris has been the cause of their downfall. So confident were they in their abilities that they ignored the basics of the business – issue cards on time, monitor IBNRs, track medical trend and all its components, stick to what you know, treat customers as you would like to be treated. Now that it’s too late, we finally hear a chastened, perhaps even humble tone from Coventry management.
Fortunately the experts on Wall Street finally removed their heads from wherever they were storing them and figured out these guys (and they are almost all guys) didn’t have a grasp on their business.
There’s plenty of talent at Coventry, and whatever happens to the company, that is recognized in the industry.
Jan
29
The public deserves to hear the real truth about Coventry, however painful.
I agree that “arrogance and hubris” contributed to what, I believe, to be the impending demise of the former “darling of wall street.” It’s more than that. It’s greed.
After four years of investigating the unethical business practices of both Coventry legal and Carelink, a subsidiary of Coventry, I am not surprised to learn of Coventry’s problems. Like ENRON, this corporation has a public and a private image. Are you aware that the regulatory agency NCQA, that accredits health plans, was formed in 1976 by HMOs? That the accreditation is based solely on information provided by the health plan? That US News and World Report uses this biased data to annually rate the top health plans for its readers?
You can understand my bewilderment when Carelink Health Plans of West Virginia received an excellent accreditation in 2008 from NCQA. Oh, the press that came out of Coventry while the innocent public remains unaware of the WV Insurance Commission’s Final Order 06-AP-024 on December 14, 2006, that mandated radical change in service because of “egregious” deeds. Nor are they aware of the civil lawsuit that will be prosecuted in 2009 in the Ohio County District Court. ERISA preemption was thrown out in the WV Federal Court. A recent motion to silence my blog was also denied.
It’s not a pretty story, but one that repeats itself too often when the rightful benefits are denied the consumer, especially the most vulnerable – the elderly and mentally ill. The culture may not be different inside the walls of Coventry as many employees describe online the shocking conditions of working conditions throughout the country.
As a country we will never get health reform right, until people are bold enough to tell the truth. And, there may be more Coventrys who reach the ends of their ropes. I welcome your suggestions at http://www.tuesdaytiradesandtales.blogspot.com.
thanks very good
Joe, Thanks for telling the truth.
C’mon Joe…stop acting like you and this blog are an impartial member of the Fourth Estate.
I’m no fan of Coventry or their recent predatory/monopolistic behavior in the WC space in particular, but can you really blame them for not wanting their employees to speak to someone who is/has been on retainer with some of their key competitors?
You clearly have every right to get up on your digital soapbox and take their management to task (lord knows, there is plenty to beat them up about), but let’s not pretend that *this* is where they would get a truly objective opportunity to tell “their side of the story”…
NCF – thanks for the comment. A couple things you don’t seem to be aware of.
Covventry’s don’t talk to the press policy is not just for me. It covers any journalist from any pub. Thte only time they talk externally is at investor days or earnings calls. That’s it.
I strongly disagree with your statement that I would not be objective. This blog and my reputation is wholly dependent on the accuracy and fairness of my posts. Other companies have chosen to engage and we have had positive and helpful conversations. And where I’ve been wrong I’ve admitted it and corrected the mistake(s).
Is MCM driven by my perspective and opinions. Absolutely. Am I impartial? No – I’m very partial to companies that don’t screw their customers, innovate, align their incentives with their customers’, listen to their customers, and are not arrogant.
I’ve been contacted by several other companies I’ve written about. In some cases they have corrected my error(s), in others we agreed to disagree. I always note corrections and leave my errors on the blog for all to see.
I don’t blame Coventry; they can do what they want. But it is a stupid policy. And it is looking dumber every day.
Paduda