Positive Direction

September 1, 2005

Change the culture. Turn things around. Start fresh. There are dozens of catch phrases for describing what the four healthcare CEOs featured in this month's Executive Profile did to redefine their respective companies.

CHANGE THE CULTURE. Turn things around. Start fresh. There are dozens of catch phrases for describing what the four healthcare CEOs featured in this month's Executive Profile did to redefine their respective companies.

John W. Rowe, MD, chairman and CEO of Aetna, Maura Bluestone, president and CEO of Affinity Health Plan, Lloyd Dean, president and CEO of Catholic Healthcare West, and Michael H. Covert, president and CEO of Palomar Pomerado Health, all display leadership that shapes their healthcare organizations and positions them not only to survive today, but prosper tomorrow.

CEOs in today's healthcare landscape need to be at the top of their game. Ian R. Lazarus, FACHE, managing partner at Creative Healthcare, explains why. "Health systems are typically the largest employer in any community-second only to the school system," Lazarus says. "So whether we are talking about a CEO of a small community provider or CEO of a regional system within that domain, the CEO is comparable to a head of state, representing such various constituencies and managing such complex external relationships that there are few other positions-even in the for-profit sector-that carry so much responsibility, reward and opportunity for self-satisfaction."

"It's a very rewarding experience to be a physician and to help individuals. It's very tangible, and it's a great honor and privilege to do that. So one does not walk away from the bedside easily," Dr. Rowe says. Today, despite not seeing patients one-on-one anymore, Dr. Rowe has more power than ever to deliver a dose of good medicine.

In 2003, Aetna met a major goal of its turnaround by achieving profitable membership growth for 12 months in a row. In 2004, for the first time since righting the ship, Aetna accomplished both top-line revenue growth and membership growth. Revenue grew by 11% to $19.9 billion, while medical membership increased by 654,000 or 5%. Overall, Aetna now serves 14.4 million medical members, 12.8 million dental members, 9 million pharmacy members and 14 million group insurance members. Leading these efforts was Dr. Rowe. "This achievement is the product of the collective efforts of all Aetna employees," he says.

In just four years under Dr. Rowe's guidance, Aetna was able to solidify its balance sheet, rebuild its management strength, and develop a superior capacity to control medical costs through an intense clinical and quality focus. These are just a few of the company's major achievements. But perhaps the most meaningful of all was regaining the confidence of customers through product and service innovation.

The change agent

"I think I gave the company an opportunity to re-evaluate its strategy," Dr. Rowe says. "I was a change agent because I came from outside the company and from outside the industry. I was able to start asking questions, question assumptions and step back and look at the strategy. I think I facilitated a self-evaluation on the part of the company that led to many changes."

Areas where Dr. Rowe began investigating were operational, functional and financial. Just what kind of inquiries did he begin making? "Are we certain it's the right strategy to have most of our business being fully insured rather than self-insured? Are we doing the right thing by emphasizing the HMO? Would it be appropriate to settle a class-action suit with physicians in order to improve our relationships with them?" he says.