By David F. Carr  |  Posted 2005-02-01 Print this article Print

CEO John Rowe cleaned up the troubled insurer's pricing and claims systems. Then, he gave customers more choices. Will that produce long-term financial health?

Aetna Base Case

Headquarters: 151 Farmington Ave., Hartford, CT 06156

Phone: (860) 273-0123

Business: Health benefits, including managed care.

Chief Information Officer: Weh-Tih Cheng

Financials in 2003: $17.9 billion in revenue; profit of $933.8 million; net profit margin 5.2%.

Challenges: Complete the turnaround begun in 2002 by unifying claims systems, improving the accuracy of plan pricing and building profitable growth.

Baseline Goals (Revisited): Here are the Aetna goals outlined in Baseline's August 2002 case study, compared with the results:


  • Reach operating margin of 6% of revenue by end of 2003.

  • Increase portion of electronic claims from about 50% to 85%.

  • Increase auto-adjudication of e-claims, from 62.1% to 70%.

  • Create "paperless" enrollment, claims checking by late 2002.


  • Done. Reached 9.3% for third quarter, 2004.

  • Not quite. The rate hit 83% for the third quarter, 2004.

  • Done. The rate rose to 73.9% for the third quarter, 2004.

  • Done. Aetna says many large plan sponsors forgo paper.

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    David F. Carr David F. Carr is the Technology Editor for Baseline Magazine, a Ziff Davis publication focused on information technology and its management, with an emphasis on measurable, bottom-line results. He wrote two of Baseline's cover stories focused on the role of technology in disaster recovery, one focused on the response to the tsunami in Indonesia and another on the City of New Orleans after Hurricane Katrina.David has been the author or co-author of many Baseline Case Dissections on corporate technology successes and failures (such as the role of Kmart's inept supply chain implementation in its decline versus Wal-Mart or the successful use of technology to create new market opportunities for office furniture maker Herman Miller). He has also written about the FAA's halting attempts to modernize air traffic control, and in 2003 he traveled to Sierra Leone and Liberia to report on the role of technology in United Nations peacekeeping.David joined Baseline prior to the launch of the magazine in 2001 and helped define popular elements of the magazine such as Gotcha!, which offers cautionary tales about technology pitfalls and how to avoid them.

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