Curing Managed Care

With costs rising and patients rebelling, the prognosis for HMOs isn't so good. Can a Wall Street whiz restore Aetna's health?

It didn't matter that he was in his company's own backyard. When Aetna's new chairman, William H. Donaldson, approached the podium at the annual meeting of the Connecticut State Medical Society last month, he didn't expect a warm welcome. The audience was packed with his firm's sworn enemies, doctors who view the $26 billion-a-year health-care giant as the poster child for all that ails managed care, from draconian cost controls and reams of paperwork to heavy-handed negotiating tactics. Last fall the organization lobbied the state attorney general to investigate Aetna's allegedly abusive practices.

On this day, though, Donaldson, a founder...

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