External Relationship Management: Health Care Implications and Future Digital Desirability

Abstract

The Year 2000 problem can be broadly divided into internal and external activities. For many businesses, internal activities have received the majority of time and attention. Given the complex and interdependent nature of Aetna’s business relationships, management of its external relationships (ER’s) has proven to be a key success factor in taming its Y2K problem. As a service-based business for more than 150 years, Aetna is a quintessential example of what many today would describe as a “value web”—an organization that thrives on its ability to rapidly deliver services within a highly interdependent set of relationships. In this paper, Aetna’s Y2K ER management strategy and its evolution from A.T. Kearney’s Y2K risk mitigation model are discussed. Reviewed in detail are Aetna’s business landscape and an aggregate ER risk-rating approach. Aetna’s medical provider network is used to exemplify its ER management strategy. As a result of Aetna’s ER strategy, a new dynamic for the health care industry centered on contingency payment plans is highlighted. Looking forward, the concept of “digital desirability” and the applicability of Aetna’s ER strategy in the digital era is explored.