Aetna: Improving Culture Equals Improving Profit
Aetna is one of the US’s largest health insurance providers. However, in 2000, the company found itself in financial duress – their reputation with customers and doctors was corroding, they were inundated with lawsuits, and they were losing approximately $1 million dollars every day due to outdated processes and high overhead costs (Katzenbach, Steffen, & Kronley, 2012).
Aetna’s culture attributed to the majority of the problems it faced. The company had a 150-year cultural history that it valued and avoided changing. It even had a nickname – “Mother Aetna” – and it encouraged employees to maintain the status quo, avoid risk, and be suspicious (Katzenbach et al., 2012).
Dr. John Rowe joined Aetna in late 2000 as its fourth CEO in five years. Rather than immediately promote massive organizational change, Dr. Rowe took a more positive approach. He recognized that he first needed to develop the criteria for making a change …show more content…
As Dr. Rowe’s series of meetings had shown, the employees cared about their customers and wanted to help them. So, the next step was to develop a “performance-driven culture” (Cone & Carr, 2002). This new strategy required throwing away the old “Mother Aetna” culture of focusing on reducing claims cost or how quickly the claims were handled. The First Claim Resolution program was created, an incentives program to reward Aetna employees for settling claims correctly the first time.
Updating information systems (System). The Executive Management Information System (EMIS) was developed to measure corporate performance as well as utilize available data for proactive management of claims data. EMIS tied in all available data, then used that information to analyze profit/loss, cost trends, and quality (Carr, 2005). This program allowed executives to identify where profit was being lost and how to correct the problems.
Reviewing the
Aetna is one of the US’s largest health insurance providers. However, in 2000, the company found itself in financial duress – their reputation with customers and doctors was corroding, they were inundated with lawsuits, and they were losing approximately $1 million dollars every day due to outdated processes and high overhead costs (Katzenbach, Steffen, & Kronley, 2012).
Aetna’s culture attributed to the majority of the problems it faced. The company had a 150-year cultural history that it valued and avoided changing. It even had a nickname – “Mother Aetna” – and it encouraged employees to maintain the status quo, avoid risk, and be suspicious (Katzenbach et al., 2012).
Dr. John Rowe joined Aetna in late 2000 as its fourth CEO in five years. Rather than immediately promote massive organizational change, Dr. Rowe took a more positive approach. He recognized that he first needed to develop the criteria for making a change …show more content…
As Dr. Rowe’s series of meetings had shown, the employees cared about their customers and wanted to help them. So, the next step was to develop a “performance-driven culture” (Cone & Carr, 2002). This new strategy required throwing away the old “Mother Aetna” culture of focusing on reducing claims cost or how quickly the claims were handled. The First Claim Resolution program was created, an incentives program to reward Aetna employees for settling claims correctly the first time.
Updating information systems (System). The Executive Management Information System (EMIS) was developed to measure corporate performance as well as utilize available data for proactive management of claims data. EMIS tied in all available data, then used that information to analyze profit/loss, cost trends, and quality (Carr, 2005). This program allowed executives to identify where profit was being lost and how to correct the problems.
Reviewing the