After a summer of heated national debate over healthcare reform, Congress and the White House are hammering out details on several pieces of legislation aimed variously at bringing greater choice, broader coverage, and price competition into the medical arena. Health insurance providers have taken part in policy-making in Washington, but have been a muted voice in the public discussion. Aetna’s chief executive, Ronald A. Williams, recently gave Black Enterprise the insurance industry’s take on how to improve healthcare in America. Aetna is the one of the nation’s largest health insurance providers, offering medical, dental, and pharmacy benefits through employers in 50 states. The company’s medical program serves nearly 18 million members. In 2008, Aetna’s revenues grew 14% to $31.6 billion. Here are the highlights of BE’s interview with Williams:
Ron Williams on Aetna’s view of what does and doesn’t need to be reformed: There are roughly about 180 million people who get their health insurance from their employer. And for most of them, the system works reasonably well. There are plenty of places for improvement in terms of quality and value, but fundamentally the system is providing good access and good quality of care. Where we have a huge problem in access is with the 45 million who are uninsured. They represent a huge opportunity for us to get and keep everyone covered. At Aetna, and broadly in the industry, there is a commitment to figure out how to do that.
On why insurance premiums are rising: Often people think about their insurance premium as the cause of the increase in healthcare [costs]. In reality, their healthcare premium is like a thermometer that reads the temperature. If you look back over 10 years, healthcare premiums on average have gone up about 7.7%. That’s because [the cost of] healthcare services—that we all value and want—have gone up 7.7%. So if we want to slow down premium increases, we have to figure out how to slow down the rate of increase in [cost of] healthcare services.
On the real reasons costs are high: There’s a fairly small percentage of people who actually consume most of the healthcare services because they have chronic conditions or they’re seriously ill. One of the things we can do is make certain those people are getting access to the healthcare they need in effective and timely way. And also that people who have a chronic condition such as diabetes, hypertension, and cardiovascular disease are getting access to the medication they need; they personally understand their condition and their role in managing that condition; and that they’re getting the services they need in the right setting, meaning they’re going to the doctor’s office, they’re getting the checkups they need, and they’re avoiding those episodes that can be very expensive both in terms of dollars as well as their quality of life. The health plan industry, and Aetna in particular, spends a lot of time and effort focusing on that. About 20% of our workforce is composed of clinical personnel. They’re doctors, they’re nurses, they’re pharmacists, they’re behavioral health specialists who spend their time identifying people who need those services and then trying to educate them and make certain they’re getting what they need.
On Aetna’s offer to reform its business by including, in its coverage, patients with preexisting conditions: What we’ve said is we should not use the individual’s health status in either giving them insurance, or in very broad uses of it, to charge them a lot more money. What we have said though is the only way that works is if we get and keep everyone covered … And so what we have to do is recognize that the way to make it most affordable is to eliminate the preexisting health information. But to do that, everyone has to be in the system. That means if you can afford insurance, you should be expected to buy it. If you can’t afford it, then we have to have tax credits or subsidies that make it affordable. So if we get everybody in, we think it’s something that will make insurance more affordable for everyone.
On Aetna’s support of mandatory private insurance coverage for all: I did an editorial in 2005 in which we called for the elimination of the use of health status and the expectation that everyone should have insurance. This was long before this was talked about. And the rest of the insurance industry has joined in and is a real believer and supporter. We’re somewhat puzzled when this is presented in the media as something that the industry is not supportive of. We think it’s good policy.