Aetna chairman and CEO Ron Williams on healthcare reform:
Millions of Americans can look forward to gaining access to health insurance, a significant milestone for this country. The challenge unmet by this bill, however, is how to effectively deal with the critical issue of affordability, which has become a burden for so many people, particularly individuals and small business owners.
I’d say it a slightly different way. This legislation is mostly about expanding coverage, and that’s a necessary first step toward reforming the U.S. healthcare system. Now comes the far harder task of bending the cost curve. At best this legislation “nudges” (Jonathan Cohn’s word) us in the right direction. But we have a long way to go — and a lot of difficult choices to make.
Williams goes on to say:
Aetna plays a significant role in helping our members – both employers and individuals – meet the cost challenge. Our role won’t change with this legislation. But, as a nation, we need to come together to bring greater focus on addressing the many underlying factors that are driving soaring health care costs. When the nation inevitably turns to finding ways of reducing this alarming trend, we stand ready to help.
And that’s really the challenge for health plans in this brave new post-reform world. Can the industry deliver on the promise of truly managing care, i.e., improving quality while at the same time reducing costs. Now is the time for health plans to prove that spending 10% to 15% of premiums on administration isn’t a waste.
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“Now is the time for health plans to prove that spending 10% to 15% of premiums on administration isn’t a waste.”
Managing care can certainly improve the quality and improve outcomes, however most of the cost drivers are outside of the control of health plans. The underlying costs rest with the providers, facilities, pharmaceuticals and device manufacturers.
The other important component is individual responsibility. A significant amount of health care costs are the result of preventable issues. Individuals need to take responsibility for their role in their own health with proper diet, exercise and reducing or quitting smoking and substance abuse. Modification of these ingrained behaviors is going to be difficult.