Managed=20 Care Matters

A weblog by Joseph Paduda

=C2=AB=20 What now for Coventry? | Main | Health plans in = the hunt=20 for acquisitions =C2=BB

A letter to Coventry employees

Among the loyal readers of ManagedCareMatters are more than a few = with=20 Coventry email addresses. I consider a few to be personal friends, know = some=20 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=20 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=20 the four and a half years I've been publishing this blog, I have reached = out to=20 several individuals within Coventry, as well as soon-to-be former CEO = Dale Wolf=20 many times in an effort to get their side of the story - and have been = rebuffed=20 each time. So, I'm left with what I gather from customers, competitors, = investor=20 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=20 lately. But there is another side to the story, and Coventry=20 management's myopic media strategy means the fifteen hundred readers = stopping by=20 every day don't get to hear that side.

The company is going through a very tough time, and may well be = broken up=20 and/or sold off. Customers on the work comp side are none too pleased = with=20 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=20 everything but the medical loss ratio" marketing 'strategy', which they = view as=20 nothing more than an attempt to show Wall Street that management is = fixing the=20 problems created by underlings. Employees from among Coventry's = acquisitions=20 have found things to be much different than they were led to believe (or = perhaps=20 than they led themselves to hope).

All this hides what would otherwise be a decent success = story.=20 The secondary market strategy for the small group HMO business = made,=20 and makes, sense. The distribution strategy worked reasonably well, as = did=20 pricing discipline. Some of the work on Medicare Advantage was creative = and=20 intelligent. The forays into the individual market boded well for the = coming of=20 national health reform. Unfortunately, these good moves, and the people = who=20 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=20 management. Their arrogance and hubris has been the cause of = their=20 downfall. So confident were they in their abilities that they = ignored=20 the basics of the business - issue cards on time, monitor = IBNRs, track=20 medical trend and all its components, stick to what you know, treat = customers as=20 you would like to be treated. Now that it's too late, we finally hear a=20 chastened, perhaps even humble tone from Coventry management.

Fortunately the experts on Wall Street finally removed their heads = from=20 wherever they were storing them and figured out these guys (and they are = almost=20 all guys) didn't have a grasp on their business.

There's plenty of talent at Coventry, and whatever happens to the = company,=20 that is recognized in the industry.

Posted by on January = 29, 2009=20 6:11 AM | Permalink =

Comments

The public deserves to hear the real truth about Coventry, however=20 painful.

I agree that "arrogance and hubris" contributed to what, I believe, = to be the=20 impending demise of the former "darling of wall street." It's more than = that.=20 It's greed.

After four years of investigating the unethical business practices of = both=20 Coventry legal and Carelink, a subsidiary of Coventry, I am not = surprised to=20 learn of Coventry's problems. Like ENRON, this corporation has a public = and a=20 private image. Are you aware that the regulatory agency NCQA, that = accredits=20 health plans, was formed in 1976 by HMOs? That the accreditation is = based solely=20 on information provided by the health plan? That US News and World = Report uses=20 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=20 that came out of Coventry while the innocent public remains unaware of = the WV=20 Insurance Commission=E2=80=99s Final Order 06-AP-024 on December 14, = 2006, that mandated=20 radical change in service because of =E2=80=9Cegregious=E2=80=9D deeds. = Nor are they aware of=20 the civil lawsuit that will be prosecuted in 2009 in the Ohio County = District=20 Court. ERISA preemption was thrown out in the WV Federal Court. A recent = motion=20 to silence my blog was also denied.

It=E2=80=99s not a pretty story, but one that repeats itself too = often when the=20 rightful benefits are denied the consumer, especially the most = vulnerable =E2=80=93 the=20 elderly and mentally ill. The culture may not be different inside the = walls of=20 Coventry as many employees describe online the shocking conditions of = working=20 conditions throughout the country.

As a country we will never get health reform right, until people are = bold=20 enough to tell the truth. And, there may be more Coventrys who reach the = ends of=20 their ropes. I welcome your suggestions at=20 www.tuesdaytiradesandtales.blogspot.com.

Posted by: Penny=20 Stenger | Janua= ry 29,=20 2009 8:05 AM

thanks very good

Posted by: felix | Janua= ry 29,=20 2009 8:33 AM

Joe, Thanks for telling the truth.

Posted by: Scott Hethcox | Janua= ry 29,=20 2009 9:26 AM

C'mon Joe...stop acting like you and this blog are an impartial = member of the=20 Fourth Estate.

I'm no fan of Coventry or their recent predatory/monopolistic = behavior in the=20 WC space in particular, but can you really blame them for not wanting = their=20 employees to speak to someone who is/has been on retainer with some of = their key=20 competitors?

You clearly have every right to get up on your digital soapbox and = take their=20 management to task (lord knows, there is plenty to beat them up about), = but=20 let's not pretend that *this* is where they would get a truly objective=20 opportunity to tell "their side of the story"...

Posted by: No Coventry Fan | Janua= ry 31,=20 2009 11:36 AM

NCF - thanks for the comment. A couple things you don't seem to be = aware=20 of.

Covventry's don't talk to the press policy is not just for me. It = covers any=20 journalist from any pub. Thte only time they talk externally is at = investor days=20 or earnings calls. That's it.

I strongly disagree with your statement that I would not be = objective. This=20 blog and my reputation is wholly dependent on the accuracy and fairness = of my=20 posts. Other companies have chosen to engage and we have had positive = and=20 helpful conversations. And where I've been wrong I've admitted it and = corrected=20 the mistake(s).

Is MCM driven by my perspective and opinions. Absolutely. Am I = impartial? No=20 - I'm very partial to companies that don't screw their customers, = innovate,=20 align their incentives with their customers', listen to their customers, = and are=20 not arrogant.

I've been contacted by several other companies I've written about. In = some=20 cases they have corrected my error(s), in others we agreed to disagree. = I always=20 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=20 policy. And it is looking dumber every day.
Paduda

Posted by: Paduda | Febru= ary 1,=20 2009 3:22 PM

Managed=20 Care Matters

A weblog by Joseph Paduda

A letter to Coventry employees

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