The Business of Health Care

Even Aetna CEO Admits: We’re Toast

I’ve been saying it for years (and in 3D and Technicolor in my new book Healthcare Beyond Reform): The Standard Model of Healthcare (the traditional unmodified fee-for-service, commodified, defined-benefit payment system) is broken and doomed. It’s fascinating to hear that even the CEO of Aetna, Mark Bertolini, said exactly that recently at a major healthcare technology conference — and that Forbes, a bastion of business and the private approach to everything, would publish an article on his remarks.

At Health 2.0 last fall, Bertolini said that he no longer thinks of Aetna as an insurance company, but primarily as an information company. This time, he made these main points:

  • The end of medical underwriting in the ACA, combined with other demographic, regulatory, and economic factors, made health insurers’ business model increasingly untenable.
  • These changes will not go away, one way or another, no matter what the Supreme Court does, no matter who is elected in November. These changes are directly tied not just to legislation but to underlying demographic and economic realities
  • This is not a terrible thing. “We got pulled through the crucible against our will and have been reshaped because of it,” he said. “For most of what has already been implemented, it has been a pretty good thing.”
  • Health insurers are unlikely to disappear. But their primary role in the future will be using new technologies to help accountable health systems serve their customers and drive out costs — and the health systems, not the health insurers, will increasingly be the face, the brand, of that improvement. “We can use technology to make it easier for the consumer. Convenience is the new word for quality.”

He is right on every count, and that is not news. What is news is who is saying it. When the CEOs of companies like Aetna and Cigna, and the CEOs of the many Blues that I have been working with in recent months, show that they understand the size, shape, and power of the changes we are all surfing together, that to me is one more clear sign that this change is happening. There will be no going back.

With nearly 30 years’ experience, Joe Flower has emerged as a premier observer on the deep forces changing healthcare in the United States and around the world. As a healthcare speaker, writer, and consultant, he has explored the future of healthcare with clients ranging from the World Health Organization, the Global Business Network, and the U.K. National Health Service, to the majority of state hospital associations in the U.S. You can find more of Joe’s work at his website, imaginewhatif.

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So what are we going to do about Insurance companies. Doctors and Hospital that lie and cover up botch surgeries and deny proper medical review for those patients, I’m sure their are those in the medical system that know what I’m talking about. Like this one, (((( Robert W Roninson vs Cigna Health Care , Dr Gary Gartsman of the Fondren Orthopedic Group , The Texas Medical Board , Dr Angela McCain , Aetna Health Care , The Texas Insurance Board. ))) Now these people can deny this all they want and like they always have been. But this one… Read more »

Joe Flower

> health care will ultimately command that percentage of (a much higher) GDP

What’s interesting is that the trend seems to be reversing, and many economists seem to feel that the drift downward is a long-term trend.

See this article from the NY Times:

And this from the NEJM:
Slower Growth in Medicare Spending — Is This the New Normal …

Maggie Mahar

Yes, as Bertolini suggested, insurers who hook up with ACOs will be
in the business of trying to keep large groups of people healthy– so that
they don’t need as much intensive, aggressive care.

Kaiser Permanente has mined its data bases to figure out how to do this– reducing heart disease in Northern California, for instance. And I I suspect Aetna will do the same. (Aetna already has figured out that
it costs less to cover hospice care rather than leaving patients to die in hospitals–even though patients who wind up in hospices live longer.)


What we’ve had since the 1980s is more like pre-paid health care, especially for group coverage.

It stops being “insurance” when people start thinking in in terms of getting their money’s worth for that premium. Nobody thinks of auto insurance this way.

Something had to give.

Richard Weisberger

Great piece. This is the way I see it. 


The most important thing private insurers do is stump up monies for medical care above and beyond what can be raised by taxation. My guesstimate, base on the fact that health care seems to consume 25% of any increase in GDP (making it the ultimate example of what economists call a “superior good”) is that health care will ultimately command that percentage of (a much higher) GDP before it becomes a “normal good” economically. There is simply no way to raise such sums via taxation without a V.A.T.

Erick Kinuthia

Nice piece.Just like insurers,doctors can also borrow a tip from this piece.Online marketing of services can increase the number of patients who seek medical attention to a certain doctor.

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bev M.D.
bev M.D.

It’s about time. I have been saying for awhile that the traditional mindset of an insurance company is incompatible with health care. Let them use their peerless information systems and databases to perform the functions you describe above – now THAT is constructive, not obstructive, to care.