Used with permission from the Pennsylvania Health Underwriter - March 2006 edition
What problems concern you most about today's health care system?
While there are certainly many successes associated with the U.S. system of health care, even the most optimistic observers agree that there are issues in terms of cost, access and quality. Health care costs continue to climb, with average premiums growing at a significantly faster pace than prices generally or workers' wages. There are 46 million uninsured, and they obtain less care, use fewer preventive services and fail to adhere to recommended treatments. And, in terms of quality, there are still too many medical errors, too much avoidable acute care, and a stubborn chasm between what the scientific evidence suggests and the care that is actually delivered. For all of these reasons, I believe that comprehensive reform is necessary. We simply cannot afford to sit back and watch these problems continue to escalate.
Aetna believes that we can be a part of the solution to many of these challenges. We are an industry leader in managing medical costs and quality. One way that we do this is by utilizing a tool called MedQuery, which has found nearly 1 million potential gaps, errors or omissions in care delivered to patients. Aetna has also taken a leading role in addressing the issue of the uninsured. Not only were we the first national health insurer to call for an individual insurance requirement, but we have products geared to important segments of the population that are traditionally uninsured like college students and part time and hourly workers.
What should be done to fix the health care system?
I believe that four key principles should guide public and private sector efforts to achieve needed healthcare reform.
First, public policymakers need to encourage the development and availability of affordable health insurance options in a free market. In practical terms, this means states should authorize a greater array of plan designs, including high-deductible plans and flexible benefit options. States also should take steps to allow health insurers to bring innovative new products to the market quickly. Federal lawmakers could allow for the sale of insurance products across state line.
Second, they also need to expand access to health care coverage, especially for the millions of uninsured. Aetna favors an individual coverage requirement that would make insurance a responsibility of citizenship. For such a requirement to work, however, insurers need the ability to offer affordable coverage options and subsidies would have to be available for those who cannot afford coverage. This is why states should be encouraging the development of high-deductible plans coupled with health savings accounts, as well as allowing insurers to offer products targeted to various segments of the uninsured population, such as part-time workers and college and university students.
Third, we all need to promote - and invest in - improvements in the quality, safety and effectiveness of care. It is encouraging that the federal government is paying attention to health information technology, which holds great promise for reducing costs and improving the quality and safety of care. Through Aetna's Aexcel network of providers, we are encouraging consumers to use high-value services and recognizing doctors and hospitals that provide such services. We're also committed to sharing information with providers so they can develop the tools necessary to improve their performance and with customers so they can make the best choices about their care. It's important to recognize that policymakers, providers, insurers and consumers all want the same thing - to promote high-quality, high-value health care. We're all in this together, which makes coordination and cooperation critical to success.
And finally, we need to encourage informed, evidence-based health care decision making. I am supportive of greater price transparency and reporting of quality and outcomes information so that consumers can be informed decision makers. This is an area ripe for further improvement, and Aetna has every intention of remaining an industry frontrunner. We also are conducting a number of "pay-for-performance" experiments around the country which are designed to reward providers for providing appropriate and high quality care.
Of course, fixing the health care system is not an easy task, nor is it one that will happen overnight. But we at Aetna take pride in serving as a critical thought leader in this policy debate and remain committed to doing our part to ensure that all Americans have access to affordable, high-quality care by offering first-rate products and services.
What is the impact of benefit mandates?
It is important to raise awareness about the cost and negative market impact of benefit mandates, particularly since cost is the number one cause resulting in the growth of the uninsured population in this country. In fact, there has been a 25-fold increase in the number of state mandates since the 1960s and today there are more than 1,800 mandates across the nation that require insurers to cover - or offer coverage for - specific benefits and services, allow access to certain providers, or extend benefits to specific populations. The popularity and growth of benefit mandates is not surprising because they are compelling in the abstract and do not require new public expenditures, but their economic impact is substantial.
Although most mandates add less than 1 percent to premiums, their aggregate cost is substantial. In addition to impacting affordability of coverage, mandates stifle flexibility in a marketplace experiencing constant medical and technological changes. They unnecessarily constrain the ability of health insurers like Aetna to offer affordable products to employers who are under increasing pressure to offer affordable health benefits to their employees. Studies have projected that nearly one-quarter of the uninsured population lacks coverage because of the cost of mandates. That is an area that is increasingly being addressed by state created commissions -- such as the California Health Benefits Review Commission -- which I serve on for the purpose of evaluating existing and proposed mandates.
What does Aetna believe should be done to address their proliferation?
Aetna supports federal and state efforts to control the growth of benefit mandates. In addition to the review commissions, we support laws that permit health insurers to offer "mandate-lite" or "mandate-free" plans that expand the ability of purchasers to choose plans that fit their health care needs and budgets. Too often, mandates cannot be justified on the basis of medical necessity or public health improvements. If we care about improving quality of care, increasing access to care, and reigning in costs, we ought to care about controlling the growth of benefit mandates.
What should the Pennsylvania state legislature do to curb increases stemming from mandates?
Many states have struggled with this concept but there does not seem to be a clear solution. PHC4 has served as a fairly good reviewing body of proposed mandates, but it does not seem to have the teeth to ultimately stop these proposals. I believe these mandates need to be reviewed by scientific experts with the burden of proof being to demonstrate that adding a mandated coverage would add a specific societal benefit worth the cost that would be incurred.
Regardless of the number of coverage mandates required, the state should allow insurers to design or sell products with enough flexibility to meet consumer need at price points they can afford, or we will never make progress addressing the problem of the uninsured.
Aetna made what many consider to be a bold move in voicing support of compulsory health insurance or what you call an "individual coverage requirement." Why?
The reason is simple - the problem of the uninsured has reached crisis proportions and we need a fresh, common-sense solution.
Requiring individuals to possess health insurance, coupled with financial support for low-income individuals to enter the marketplace, is a viable route for achieving universal coverage. It's important to point out that the concept of compulsory insurance is not new to Americans. For instance, motorists are required to possess insurance before getting behind the wheel. At its core, an individual coverage requirement combines the goals of universal coverage and universal responsibility. It would effectively transform health insurance into a responsibility of citizenship, requiring all Americans to maintain at least basic coverage. But such a requirement can not ignore the fact that millions of Americans cannot afford insurance, which is why we believe that an individual coverage requirement must be paired with assistance for those who cannot afford to purchase health insurance in the private market. Refundable, advanceable tax credits, for example, could help bring previously uninsured Americans into the private marketplace.
In an Op Ed in the Wall St. Journal that I co-authored with John Lewin, M.D., the CEO of the California Medical Association, we noted that an individual insurance requirement is compelling in a number of ways. Americans who can afford coverage - about one-third of the uninsured have household incomes exceeding $50,000 - could no longer shift the risks and costs of remaining uninsured onto others. The health care system would save tens of billions spent annually on uncompensated care and the risk profile of the overall insurance pool would be improved by bringing millions of young, healthy Americans into the market. Further getting more people insured is good news from their own medical standpoint. As we all know, insurance facilitates preventive care, which produces better health outcomes and reduces costly acute and emergency care.
What are your thoughts about the trend of consumerism in health care?
It is difficult to overstate the significance of the consumerism trend. Aetna was proud to be the first national, full-service health insurer to offer consumer-directed HRA and HSA plans in 2001. We are now in our eighth generation of product evolution and I'm very optimistic about the continued strong growth of these products. There are lots of reasons for my optimism. Consumer-directed products give individuals more control over their health care, which is something consumers welcome because it facilitates prudent decision-making. These products also feature lower monthly premiums, making them more affordable for employers and individuals. In fact, a study last spring found that nearly 30 percent of people who purchased an HSA in 2004 were previously uninsured. And these consumer-directed products encourage healthy behavior because enrollees don't pay out-of-pocket for preventive services such as routine physicals, child immunizations, obesity weight-loss programs, or routine prenatal care.
What are the challenges or obstacles associated with this trend?
The trend toward greater consumerism in health care is exciting, but I think we need to invest time, energy and resources into ensuring that individuals are empowered with the necessary information and tools for taking greater control of their own health care. The biggest impediment to effective consumerism in health care has been the lack of relevant data on health care quality and cost. Consumers need access to simple and easy-to-use information about various medical conditions and how to best manage them and which area physician or hospital may be best for upcoming treatment. They also need to know how to achieve the best value for their health care dollar. Providing transparency to consumers with these informational tools is a key challenge.
What is Aetna doing to give consumers these informational tools?
We're addressing this issue head-on. We continue to improve Aetna Navigator, the Company's self-service member website that offers a wealth of relevant information on over 5,000 health topics, a hospital comparison tool and a suite of cost-comparison tools. We have also received lots of positive attention about our price transparency pilots in Cincinnati, Dayton and Springfield Ohio, Northern Kentucky and Southeast Indiana. In these markets, Aetna members have on-line access to the actual costs for up to 25 of the most common office-based services offered by their own primary care or specialist physician. This first-of-its-kind transparency effort is opening what is often perceived as the "black box" of physician-specific pricing, and we plan to roll it out across the country.
What can be done to move past the discord between for-profit versus non-profit carriers (re: medical underwriting issue)?
As someone who spent 14 years working in a Blues Plan, including several as president, I have seen first hand the non-profit environment. What I think sets Aetna apart is that we operate in all 50 states, and have an opportunity by working in unique markets across the country to develop innovative products and services. Ultimately, this benefits the citizens of Pennsylvania because we can bring the best of these innovations to help you address medical cost and quality among other important issues.
I don't see this issue as being one between for-profit and non-profit carriers but rather one focused on the ability to compete in Pennsylvania. Employers and individual consumers deserve to have a choice of carriers in the state, and carriers should have the flexibility to offer competitive and innovative products to plan sponsors and their employees.
The Blue Cross carriers in Pennsylvania are experienced and financially strong companies that enjoy a majority market share within their respective regions of operation. The Commonwealth should encourage competition in the free market which should result in more insurance options at attractive price points for Pennsylvania citizens.
