Aetna’s Bertolini: ‘We Can’t Afford It’
Antiquated systems and out-of-control health care costs in the United States are not sustainable, according to the chief executive officer of Aetna, one of the nations largest health insurers. In the opening keynote at HIMSS14, Aetna CEO Mark Bertolini painted a grim picture of health care in the U.S. that is plagued by inefficiency and waste.
Antiquated systems and out-of-control health care costs in the United States are not sustainable, according to the chief executive officer of Aetna, one of the nations largest health insurers. In the opening keynote at HIMSS14, Aetna CEO Mark Bertolini painted a grim picture of health care in the U.S. that is plagued by inefficiency and waste.
Citing a study by the Institute of Medicine, Bertolini said that about 30 percent of U.S. health care spending is wasted--more than $800 billion annually--on unnecessary services, hidden administrative costs and other waste. Were the nation to solve this costly problem, the U.S. could pay back half of its debt over the next 10 years, he argued.
"Half of it solved [$400 billion] does what Simpson-Bowles tried to accomplish in their deficit reduction plan," remarked Bertolini. "Just 20 percent pays for the Affordable Care Act without cutting any fees and increasing taxes. This should be the focus of our efforts. This should be the focus of our policy decisions, of our solutions, and of our IT."
Compounding the problem is the increase in the nation's health care costs as a percent of gross domestic product, the forecasted growth in chronic care populations, and the fact that health care premiums are growing at four times the rate of inflation, Bertolini observed.
"It can't keep increasing. We can't afford it," he said. "It's unsustainable. Pretty soon it will consume all of our personal disposable income. Currently, today, employees are paying 41 percent of the health care dollar. And, if the trend line continues, in another three to five years employees will be paying more than half."
What is required, Bertolini asserted, is a change in the current mindset around health care, a system that was designed in 1945. "Because of the way we started in 1945, we haven't come very far along," he said. "We cannot solve our problems with the same thinking that we used to create them."
Bertolini gave three prescriptions for America's ailing health care system: aligned incentives (payment reform), changing the way chronically ill are cared for, and investing in wellness for the next 25 to 30 years. He acknowledged that investing in wellness is a "long payoff" but "if we never start it, we will never get there."
Changing the payment model is critical to transforming health care in the U.S., advocated Bertolini. "If we really want to take care of people, we should align incentives around keeping them healthy, which makes them productive, economically viable, and satisfied."
When it comes to taking care of the chronically ill, Bertolini said that recent data compiled by Aetna found that the top 5 percent of Medicare patients consumed 43 percent of the Medicare dollar, spending on average $108,000 a year per person. "Let's not keep sending these people around with 25 different prescriptions and all these different doctors and hospitals. Let's get them to the right place."
For the wellness component, Bertolini argued that engaging people can only be accomplished by making it simple. He said wellness needs to be made relevant to consumers by "putting it in the palm of their hands."
Towards that end, Aetna purchased the mobile app iTriage, one of the most popular health and fitness apps with more than 8 million downloads that allows users to research their symptoms, find a medical provider that best serves their needs, and book appointments all from their smartphone.
"The new definition for quality is convenience," said Bertolini.
Citing a study by the Institute of Medicine, Bertolini said that about 30 percent of U.S. health care spending is wasted--more than $800 billion annually--on unnecessary services, hidden administrative costs and other waste. Were the nation to solve this costly problem, the U.S. could pay back half of its debt over the next 10 years, he argued.
"Half of it solved [$400 billion] does what Simpson-Bowles tried to accomplish in their deficit reduction plan," remarked Bertolini. "Just 20 percent pays for the Affordable Care Act without cutting any fees and increasing taxes. This should be the focus of our efforts. This should be the focus of our policy decisions, of our solutions, and of our IT."
Compounding the problem is the increase in the nation's health care costs as a percent of gross domestic product, the forecasted growth in chronic care populations, and the fact that health care premiums are growing at four times the rate of inflation, Bertolini observed.
"It can't keep increasing. We can't afford it," he said. "It's unsustainable. Pretty soon it will consume all of our personal disposable income. Currently, today, employees are paying 41 percent of the health care dollar. And, if the trend line continues, in another three to five years employees will be paying more than half."
What is required, Bertolini asserted, is a change in the current mindset around health care, a system that was designed in 1945. "Because of the way we started in 1945, we haven't come very far along," he said. "We cannot solve our problems with the same thinking that we used to create them."
Bertolini gave three prescriptions for America's ailing health care system: aligned incentives (payment reform), changing the way chronically ill are cared for, and investing in wellness for the next 25 to 30 years. He acknowledged that investing in wellness is a "long payoff" but "if we never start it, we will never get there."
Changing the payment model is critical to transforming health care in the U.S., advocated Bertolini. "If we really want to take care of people, we should align incentives around keeping them healthy, which makes them productive, economically viable, and satisfied."
When it comes to taking care of the chronically ill, Bertolini said that recent data compiled by Aetna found that the top 5 percent of Medicare patients consumed 43 percent of the Medicare dollar, spending on average $108,000 a year per person. "Let's not keep sending these people around with 25 different prescriptions and all these different doctors and hospitals. Let's get them to the right place."
For the wellness component, Bertolini argued that engaging people can only be accomplished by making it simple. He said wellness needs to be made relevant to consumers by "putting it in the palm of their hands."
Towards that end, Aetna purchased the mobile app iTriage, one of the most popular health and fitness apps with more than 8 million downloads that allows users to research their symptoms, find a medical provider that best serves their needs, and book appointments all from their smartphone.
"The new definition for quality is convenience," said Bertolini.