AETNA: Sells Financial Division to Focus on Health Care
Aetna Inc. now will be free too "focus on its ailing health care business," as the company officially sold off its financial services and international business division to the Dutch insurance and banking giant ING Group for $5 billion, the AP/Miami Herald reports. Aetna Chair William Donaldson called the $35 cash per share deal, which also includes $2.7 billion in Aetna debt, "an exceptionally good offer" for shareholders. He added, "We also feel that we have considerable opportunity now, with the focus we will have on the health business, to make the changes that need to be made there. We think, long haul, both of these moves are in the interests of shareholders" (Harris, 7/21). Donaldson said that the company is also looking for a new CEO for the health care business. Other steps the company is taking to "improve the bottom line" include hiring more nurses for hospitals and medical centers and increasing premiums and co-payments for expensive treatments. Aetna spokesperson Joyce Oberdorf added that the company plans a "more respectful" attitude toward physicians, patients and nurses.
But even with Aetna moving forward to improve its health care business, some analysts predicted a bumpy road to appeasing patients and doctors (Gural, AP/Bergen Record, 7/21). Gregory Crawford, vice president of health care analysis for Fox-Pitt, Kelton, Inc., said, "The problems with Aetna have always been the health care line and this doesn't solve those issues. Now the real work begins. It's real easy to sell off pieces of your franchise. Turning around your health care operation is harder" (AP/Miami Herald, 7/21).