MINNEAPOLIS - UnitedHealth Group executives acknowledged missteps that have frustrated patients and doctors and cost it customers, and said the nation's second-largest health insurer is working to improve.
Poor customer service, especially for health insurance for businesses, caused losses of 315,000 customers this year, the company told investors and analysts at a presentation in New York yesterday. And it said it pushed too hard to integrate its PacifiCare acquisition, alienating doctors, and customers.
Improvements are on the way, including faster payments for doctors, said David S. Wichmann, who oversees UnitedHealth Group Inc.'s individual and employer markets.
"We understand relationships, and we recognize that this is a health system that needs to work for everyone, not just for us," he said.
UnitedHealth officials outlined changes aimed at improving its service reputation:
It will show doctors and patients on the day of a doctor's visit how a claim will be paid.
Doctors will be paid more quickly.
UnitedHealth employees will be given incentives for quality and patient advocacy first, and productivity second.
UnitedHealth rankled doctors and customers by the way it handled its purchase of PacifiCare in 2005.
"We lost some customers and we slowed our growth. All that hurt," Wichmann said.
Its brand was also hurt by a stock options backdating scandal that led former chairman and chief executive William McGuire to step down a year ago. Yesterday, the Minnesota Court of Appeals ruled that state Attorney General Lori Swanson can force UnitedHealth to turn over options-related documents under a false advertising statute.
The three-judge appeals panel wrote that UnitedHealth's Securities and Exchange Commission filings are the legal equivalent of "advertising."
UnitedHealth had to restate several years of financial statements because it dated its stock options incorrectly, giving McGuire and some other employees an instant gain.
The company's attorneys have said Swanson should sue if she has evidence of wrongdoing, but that she should not be allowed to fish for material without saying what it's for. The SEC and the US attorney's office in Manhattan have also disclosed investigations.
Meanwhile, UnitedHealth has continued to expand outside of traditional health insurance.
It is the largest provider of the new Medicare prescription drug benefit, and it started a data-crunching division for healthcare information and research.
But its UnitedHealthcare division, providing and managing health insurance for businesses, is the company's largest. So regaining growth there will be key to its fortunes.