UnitedHealth Group: Contrasting the Wall Street View with the Physicians' Views on the Ground

We have posted frequently (most recently here) about the lavish compensation given to the CEO of huge managed care organization UnitedHealth Group, how it related to the company's stated mission to provide affordable health care, and now how it inspired a not terribly succesful stock-holder revolt.

Two news articles from the mid-west contrasted how UnitedHealth is regarded by stockholders versus how it is regarded by doctors, hospitals, and regulators. In particular, the Lincoln (NE) Journal Star reported:

While UnitedHealth Group profits were soaring and its CEO was collecting more than a billion dollars in stock options, Nebraska doctors, hospitals and patients were experiencing frustrating claim payment problems, according to Department of Insurance records.
It took several years of state monitoring and prodding, a $62,500 state fine and audits, to improve the health care giant’s claims record.
Despite improvements, physicians and hospitals, frustrated by the history of problems, are still keeping a wary eye on United Healthcare Insurance Company, which had 22 percent of the Nebraska health insurance market in 2004, based on an American Medical Association study.
'We have learned not to trust —that better now does not mean better forever,' said [Chairman of the Committee on Health Insurance for the Nebraska Medical Association Dr David] Filipi.
'The problem with this company is that you fix one problem and another one crops up,' said Roger Keetle, with the Nebraska Hospital Association.
'It’s just a continual floating craps game. It’s gone from horrible to better. But this is still the worst company (for payment) we have,' Keetle said.
United Healthcare spokesman Greg Thompson said the company has no comment on the Nebraska issues and [the state] audit.
The agency audit in 2004 of both the HMO (health maintenance organization) and PPO (preferred provider organization) services indicated claims that were eligible were not being paid and claims were getting lost.
[Nebraska state Director of Insurance Tim] Wagner said he was particularly frustrated and incensed because the chief executive officer was getting paid a lot of money for his performance, and what we were seeing here was that they had not done that good of a job.'
'It’s amazing that a company with these resources can’t figure out how to pay a claim,' said Keetle of the state hospital association.
'It’s a company that has been highly profitable, and there is a reason why. They do a nice job of dealing with businesses. They have a tremendous Web site. They do a tremendous job of talking about quality. But their own administrative policy is a disaster,' said Keetle.

Furthermore, the St. Paul Pioneer Press contrasted favorable reviews of UnitedHealth among stock market analysts and doctors' views of a company as "among the worse of the insurance ogres, denying payments and pressuring those on the front lines to cut back care." They quoted a pediatrician, "the shareholders have been misled and deluded. They think Bill McGuire is brilliant, but they can't tell you why." An orthopedic surgeon charged "they just do a better job of health care denial. UnitedHealth Group is making all this money at the expense of giving patients the care they need." Another doctor said the company's behavior "demonstrates the unrestrained greed and arrogance of an organization that has systematically undermined the very health care system that provides the basis for its wealth."

Maybe more managed care investors should start listening to how their companies are regarded by those who have to deal with them on the ground.