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.
Aetna’s opinion of “public option†health plans being debated in Congress: Well, we are concerned about it. We don’t think it’s a good idea … We believe the answer is a public-private partnership where the government makes available subsidies and that the 1,300 health plans in the country would compete vigorously, as we do today, to be able to serve those members.
On the specific proposed reform package AETNA supports: I would comment probably most recently on the work of the Senate Finance Committee which was released Sept. 16. It’s a very important bill in terms of making good progress. It represents a good starting point for trying to bring closure to this whole dialogue. And what we’re trying to say is we need to make certain we get something done … The bill is focused on an expectation that everyone over time would be expected to have insurance; that the insurance industry would adopt the reforms that it supports, meaning that we would in the individual market no longer use an individual’s health status. It sets up exchanges–or you could think of them as marketplaces–where an individual could go online and see all the health plans in their community, see their products, and be able to select the one they felt best met their circumstances. It has some other elements of it that would perhaps encourage
the cross-state sale of insurance products. As you know, you can borrow from a bank in any state, you can purchase products over the Internet or from companies that are headquartered in any state. In insurance, it’s all been done principally on a state basis. So we think that would increase competition as well.On how preventative medicine might reduce overall healthcare costs: The research suggests that about 40% of the healthcare costs come from what we call behavioral choices that people make. For example, someone who has diabetes doesn’t necessarily have a choice about having that condition. Whether they follow the doctor’s orders or understand the doctor’s orders, and understand what they need to do to slow down the progression of the disease, is a form of prevention. That’s an important area. We think there needs to be a lot more done, and that’s one of the areas we hope to see continued progress.
On Aetna’s involvement in shaping healthcare reform thus far: I spent a good deal of time in Washington meeting with elected officials, meeting with the president, and other members of his team. The sense I get is they’re listening to everyone. They’re listening to consumer groups. They’re listening to labor. They’re listening to advocacy groups who advocate for particular health conditions … I’ve testified before various committees in Congress. And there’s a good dialogue. And we’re hopeful that the good policy that’s being formulated will not lose out to the politics in this situation.