Aetna CEO: The Supreme Court decision doesn’t matter. The deficit does.

June 22, 2012

Aetna CEO Mark Bertolini (Adam Nadel/World Economic Forum)

Mark Bertolini has a pretty busy day job: As Aetna's chief executive, he manages one of the country's top five health insurance plans.

Lately, his evenings have gotten busy, too. Bertolini has started spending some evening hours working with the Gang of Six, the bipartisan group of six senators that tried (and failed) to push a major deficit reduction plan through Congress.

He has come away from the bull sessions thinking the Supreme Court verdict  on the Affordable Care Act does not matter much for the future of health care — or for his business. With our without the health law, he sees a country staring down a deficit driven by health-care cost growth — and a pressure on private industry to turn that around.

"The Supreme Court ruling does not matter for our business strategy," Bertolini says. "It's a political event. Whether or not the Supreme Court impacts the Affordable Care Act in some way, we still have to keep moving forward to impact the cost of care in America."

Bertolini and I had a chance Thursday to talk about how he sees the health insurance industry changing. He (like everyone else) sees costs going up — and thinks that's bad for business. That goes back to 2005, when the company did a "deep dive" looking at where their various products were headed.

“We saw an individual market in inexorable decline and, on the small group side, fewer were offering benefits and costs were rising. We knew we had to change something," Bertolini said.

It was around then that Aetna began testing out ways to deliver better health care, for a lower price. There have been 57 pilot programs in total, big and small, scattered across the country. It is now participating in 10 accountable care organizations, where it bands together with doctors and reimburses them on the quality of their work, rather than quantity. Seventeen more of those are in the pipeline.

Other pilots have tried different models that could be replicated elsewhere: When the health insurance company paid for case managers to work with 20,000 diabetes patients in Pennsylvania, it saw their acute sick days in the hospital drop by 31 percent.

As the Supreme Court's decision has neared, Aetna's experimentation has not slowed: It announced today the launch of a new health insurance plan it will co-own with a hospital chain in Northern Virginia, one of the first such ventures in the nation with unusual features aimed to at reducing costs while improving care (you can read more about that here).

Aetna has a strong business reason to create a cheaper insurance product: Namely, getting more people to buy it. That motivation stays in place regardless of what happens with the Supreme Court this month.

"We're really working right now on the underlying cost of health care," he says. "These investments we're making are about finding a different way to make models work. We're committed to fixing that, and feel like we need to fix that."

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