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April 2, 2003


Emory Healthcare Withdraws As Provider for Aetna Health, Inc.

After more than eight months of negotiation, Emory Healthcare has made the decision to terminate its participation as a provider of health services for Aetna Health, Inc., effective December 31, 2003. Emory has participated in Aetna’s PPO network and its HMO network for over 10 years. The termination covers both plans.

Between now and December 31, 2003, people whose healthcare insurance is provided through Aetna can continue to see their Emory Healthcare physicians and other providers as they have done in the past and with the same benefit coverage. On and after January 1, 2004, however, Emory Healthcare will no longer be considered an in-network participating provider.

Patrick Hammond, Senior Director of Managed Care and Employer Support Services for Emory Healthcare, says the decision was a difficult one. "We recognize that over 300,000 people in greater Atlanta who are now covered by Aetna will be negatively impacted by this decision after December 31, including many adults and children for whom we now provide some services not offered elsewhere in the state."

However, says Mr. Hammond, "Emory Healthcare and Aetna Health, Inc. were unable to reach an agreement on reimbursement rates that we believe is fair to our patients, Emory Healthcare hospitals and physicians, and to the other 90 plus healthcare plans in which we participate at rates similar to those we offered Aetna. Emory’s policy is simple: we offer fair and appropriate reimbursement rates that reflect the cost of providing care. We also believe payors with whom we participate should allow all their members, not simply PPO network members, access to Emory’s world-class services."

As healthcare costs continue to rise, Aetna’s average annual rate increase of payment to Emory Healthcare over the past three years has been less than 2.5 percent. At the same time, according to Aetna’s public premium filings, Aetna has increased its premiums and administrative allocation an average of 14.5 percent per year.

During this same period, the average hospital consumer price index, considered the national industry trend of expenditures hospital incur to deliver care, has increased at over 7 percent a year due to nursing and other skilled healthcare professional labor shortages and the increasing cost of medical technology and drugs. As an academic health center, Emory treats a high proportion of patients with extremely severe and complex illnesses or who need state of the art treatments not easily available elsewhere, all the while keeping its costs in line with industry trends, especially in comparison with comparable health centers.

Mr. Hammond says, "Emory has already taken many steps to aggressively reduce costs. Had we accepted Aetna’s proposal, we would have been forced to make further cuts that we believe would affect the type of services and quality of care for which we are known throughout the region. For these reasons, we are unable to continue to work with an insurance company that is not willing to provide adequate reimbursement to cover the increased costs of providing care."

Earlier today, April 2, Emory University and Emory Healthcare began sending letters to those employees who have insurance coverage through Aetna as part of the benefit plans of either Emory University or Emory Healthcare. Letters assured employees that the effective date of this transition is not until January 1, 2004, and that Emory is in the process of choosing another insurance company to manage the plan currently managed by Aetna. Since employees will be able to select among available health plans at the regularly scheduled benefits enrollment period in the fall, they will not suffer any interruption in their healthcare coverage.

"We only wish we could do the same for the rest of our patients who are in other employer plans administered by Aetna," said Mr. Hammond. "While we will of course do everything we can to help with the transition of their care, we will deeply regret losing the opportunity to continue the care of even one of these patients as an in-network provider."

Emory Healthcare is the most comprehensive healthcare system in metropolitan Atlanta, providing care to newborns to the most senior of citizens. Patients who currently receive Emory services through Aetna or any other insurance company do so with one or more of the following Emory Healthcare components:

- The Emory Clinic, with 671 medical school faculty doctors, the largest, most comprehensive physician group practice in Georgia, providing general medicine and highly specialized care to adult and pediatric patients

- The Emory Children’s Center, the largest pediatric multispecialty group practice in Georgia, providing both outpatient care to children and specialty pediatric care at Emory Crawford Long Hospital, Children’s Healthcare of Atlanta at Egleston, and Hughes Spalding Children’s Hospital at Grady Memorial Hospital. For example, over 80 percent of the pediatric physicians providing care at Children’s at Egleston are Emory Healthcare physicians, either through Emory Children’s Center or through pediatric surgery and other sections of The Emory Clinic.

- Emory University Hospital, a 579-bed adult, specialty care hospital staffed completely by Emory School of Medicine faculty physicians, consistently ranked in the nation’s top ten hospitals for heart care by U.S.. News & World Report, and one of the region’s most comprehensive multiple organ and tissue transplant centers.

- Emory Crawford Long Hospital, a 553-bed community based specialty care hospital in midtown, staffed by Emory and community physicians, and known for its women’s and maternity services with a specialization in high-risk obstetrics.

- Wesley Woods Center, including the Wesley Woods Geriatric Hospital, a 100-bed specialty facility serving more than 30,000 older adults and chronically ill individuals each year, well-known for programs in depression, Alzheimer’s disease, Parkinson’s disease, Huntington’s disease, sleep disorders and rehabilitation.

- Emory Adventist Hospital, a hospital in Smyrna jointly owned with the Adventist Health System, and staffed by more than 200 physicians including those from Emory Healthcare.

- EHCA, LLC, a limited liability company overseen by a board jointly governed by Emory Healthcare and HCA-The Healthcare Company. This decision will not have any influence on the two community hospitals in EHCA although it will have an effect on the ability of patients to utilize the Emory hospitalists, family practice and other Emory physicians practicing at these facilities.

In addition to the hospitals above, Grady Memorial Hospital and its community clinics are staffed primarily by Emory physicians and residents, in collaboration with Morehouse School of Medicine. Programs covered by Emory and Morehouse physicians include Atlanta’s only Level-1 trauma center, burn center, as well as many other specialty services and clinics for adults and children.

Emory physicians also staff the Atlanta Veterans Affairs Medical Center, but this decision will not affect patient care there.

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