Insurance giant Aetna U.S. Healthcare has pulled out of the American Association of Health Plans, a national health insurance trade group.
The AAHP was formed last year when the Group Health Association of America and the American Managed Care Review Association merged so the managed-care industry "could speak with one voice," HMO executives said.
Aetna becomes the second major plan to leave the association. Cigna HealthCare dropped out in 1995.
That decision was "not over any dispute," said Cigna spokesman Wendell Potter. "We reviewed our expenses, and we had our own state government affairs and federal affairs offices, and we felt our needs were being taken care of."
A source close to Aetna said the company has chosen to focus its resources on its internal operations. Aetna is continuing to digest its $8.2 billion acquisition of U.S. Healthcare, which became effective last July. Aetna's annual AAHP dues, which are based on its number of enrollees, are $800,000, or 4% of the AAHP's $20 million budget.
"After extensive and amicable discussions (Aetna) decided not to join for this year," said Jill Griffiths, an Aetna spokeswoman.
Griffiths called inaccurate a published report that Aetna withdrew because other AAHP members would not contribute to quality and outcomes studies. That report also said Aetna was dissatisfied with the AAHP's efforts to counter the managed-care public relations backlash of the past two years.
Griffiths said Aetna will continue to support AAHP programs, particularly the "Patients First Initiative," an ongoing project to counter negative perceptions of managed care.
An industry source said Cigna dropped out of the AAHP before that initiative began, partly out of frustration that the organization wasn't effective in countering the storm of bad publicity against HMOs.
Susan Pisano, AAHP director of communications, said, "Companies make their decisions based on what their internal resources and needs are. While (Aetna) is not our member at the moment, they have assured us they are supporting our programs."
Still, the pullback of major players from the high-profile managed-care group is puzzling at a time when the industry is under fire.
In a related matter, Joseph T. Sebastianelli unexpectedly resigned on May 16 as president of Aetna, the parent of Aetna U.S. Healthcare. Sebastianelli, 50, said the demands of his job and his personal responsibilities were incompatible.
Sebastianelli, who had been co-president of U.S. Healthcare, was given the additional responsibility of Aetna's international financial services two months ago.
Ronald E. Compton, Aetna's chairman and chief executive offer, is slated to retire March 1, 1998, but has temporarily reassumed Aetna's presidency.