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Aetna CEO Mark Bertolini on Healthcare & Capitalism


  • Aetna's Mark Bertolini and David Kirkpatrick during their interview session. Photo Credit: Paul Sakuma Photography


Mark T. Bertolini
Chairman and CEO, Aetna Inc.


David Kirkpatrick
Founder and CEO, Techonomy

A conversation with Mark Bertolini of Aetna and David Kirkpatrick. An excerpt of their talk can be found below. The full transcript can be downloaded here.

Kirkpatrick: This is one of the most thoughtful CEOs in the world of a large company. Mark is CEO of Aetna, which is, you know, a giant health insurer plus and really a company that has essentially, as he’s described at Techonomy on several occasions in the past, really aiming at converting itself into a technology company in many ways. It’s a health insurer that is skeptical about health insurance’s future, in effect.

Bertolini: Yes.

Kirkpatrick: And a deep thinker about the future of healthcare and really the nature of capitalism and even maybe has some interesting observations on the conversation we just had. But so maybe—do you, before we get started on the health stuff?

Bertolini: About the last conversation?

Kirkpatrick: Yes.

Bertolini: I mean, privacy is a big deal in healthcare and I think if we can turn it to an advantage knowing some of this stuff about people that—about their health, about their practices. I’ll give you an example. We just did a deal with—a partnership with Meals on Wheels and Ellie Hollander is the CEO and she saw me at one of my talks and said, “You know, I can help you.” So we spent $100,000 and we built an app that all two million volunteers at Meals on Wheels will have and they will have a set of questions to answer every time they’re in someone’s home, which is four to five times a week. And the reason they go to homes is ostensibly to deliver meals but actually what they’re doing is to socialize. It’s more about the conversation than it is about the meal. And they’ll give us a crowdsourced view of social determinants of health in the home so that we can make investments in heating assistance, food, transportation, ramps, other things in the home that will actually be cheaper than one ER visit. So you know, is that good information to have?

Kirkpatrick: Yeah, of course it is.

Bertolini: I think it is. I mean, who wouldn’t want in finding—we’re actually doing this with his holiness, the Pope, in trying to create a million volunteers in Africa, community health workers.

Kirkpatrick: Working with the Pope?

Bertolini: The Vatican.

Kirkpatrick: Who’s we?

Bertolini: It’s a group of CEOs.

Kirkpatrick: All right.

Bertolini: And so we’re trying to get a million community health workers in Africa. Do we need to train up 750,000 people or do we need to give them technology to do the work that a community health worker would do, which is I have the situation, these people need these things, how can I get it? So identify demand and by identifying demand create a sourcing opportunity by gathering the data and sourcing. Which is really I think a good use of technology and a good use of that kind of information.

Kirkpatrick: It is. Well, that was a very interesting thing to say. And I want to—before we finish, I want to get to something that I think relates to our previous discussion at a macro level, which is how capitalism dovetails with all this. But before we get to that, let’s stick with health for a little while, because you have this very thorough way of thinking about what’s really happening in healthcare in the United States and this idea that social determinants is so much more important than we normally give it credit for. So talk about that for a minute.

Bertolini: So if you look at life expectancy, 10 percent of one’s life expectancy is determined by the clinical care they received throughout their lives. Only 10 percent.

Kirkpatrick: Wow.

Bertolini: And that’s where we spend $3.2 trillion dollars a year. Twenty percent is related to social determinants, the environment that you’re in, 40 percent is related to behaviors which are driven by your environment, and 30 percent is related to your genetic code. So your zip code, where you live, actually has more to do with your life expectancy than your genetic code or any clinical care you receive. And you can see it in Baltimore, in the Bronx, in Detroit, my hometown, there are zip codes where people have 15 to 20 years less life expectancy than the zip code next door. So we have this huge problem around how we invest our funds. A big driver of that, particularly after 2008, which has exposed it even more in the rise of the opioid epidemic, is this notion that we are not socially taking care of people and it’s showing up inside the healthcare system as a loss of hope and a giving up on the future. So if we’re to attack that issue—

Kirkpatrick: Which makes people less healthy.

Bertolini: Which makes them less healthy. I mean, we’re suffering from the malaise in our nation that is a result of people being less healthy, less hopeful about being able to move anywhere as a result of their discontinuity in their employment and their wealth. And so they’re stuck. And so what’s the best thing to do? Well, in a lot of cases, places like central Kentucky, 50 percent of the people are opioid addicted. And so they’ve given up.

So this idea of social determinants is one idea. The other idea is that 50 percent of the American population now has a chronic disease and they consume 86 percent of that $3.2 trillion dollars a year. So we now have a chronic disease problem, which has less to do with my trip to the doctor and more to do with where I live and how I take care of myself when I’m not at the doctor’s office, which in most cases is 15 minutes a couple two, three times a year. And so how do we get into the home, how do we understand the social determinants. They’re cheaper investments to make than it is to wait for somebody to show up with their warranty card, which is now called a health insurance card, at the dealership when their body breaks.

Kirkpatrick: So is the basic thing you’re trying to do to figure out how to reduce the cost of—reduce your cost, I mean, at the most elementary corporate level, and society’s cost by simply keeping people healthier, which seems to be yes. But how do we do that, how much can we get the costs down and what’s the process to get, you know, from A to B?

Bertolini: An emergency room visit runs anywhere from $20,000 to $40,000 dollars a visit.

Kirkpatrick: Really?

Bertolini: Yes, that’s the cash out the door. So why shouldn’t we do everything we can to keep somebody at home? So the idea would be, we will provide as much care as we can provide in the home, we’ll make it convenient for you, we’ll bring people to your home—it’s a supply-demand issue. We need to understand the demand in the home, ergo the issue around privacy and what goes on there. And we then have all these sources that we can bring to bear so you’re really creating an Amazon-like model of just making sure you’re sourcing demands in the home. And when it can’t be done in the home, make it as convenient and near to you as possible, which is a retail outlet.

Kirkpatrick: Oh, really?

Bertolini: So we have conversations going on with Walmart and Walgreens and CVS.

Kirkpatrick: You do have conversations with CVS.

Bertolini: We have been. With all these players about creating an in-store concept that looks more like an Apple store than it looks like a drugstore.

Kirkpatrick: Oh, really? So you think that’s going to happen one way or another.

Bertolini: It has to happen. It’s the only way to arbitrage costs out of the system. A CBC, a blood draw at an academic medical center is 50 to 100 times more expensive than doing it in a retail outlet. So you have this arbitrage of site of care where you can provide it and if it’s more convenient then people are going to continue to use it. So this idea of disrupting healthcare is not about technology, it’s about the customer experience. Customers disrupt industries. Amazon has not disrupted retail, the customers who like that model have disrupted retail. And so what is it about the customer experience in healthcare that is not being met today or people don’t know is being met, and the biggest part of it is it’s a miasma. You walk into it, you feel like a rat in a maze, you don’t know where you’re going next, how much it costs, why you went to this place versus that place, how much am I going to have to pay out of pocket at the end of it when the bills show up. If you could create a mechanism and a place where people can go and say, “How do I do this?” and you could have someone build it for them and help them through it, then they’re going to continue to use it.

Kirkpatrick: I mean, the idea of an Apple store for health is a wonderful conceptual game, but the idea that anybody could have the profits that would allow that to be available is hard to envision.

Bertolini: Well, I mean, have you been in an Apple store lately? I mean, they’ve got these long benches, you know, you’ve got the genius bar—

Kirkpatrick: Want to know how many Apple products I have? I have three Apple products on me right now.

Bertolini: Yeah, and you’ve got the genius bar, right? And you’ve got these long tables people are all sitting at. They pay for that appointment, right? They wait, they buy stuff. And if you look at the—they don’t sell anything at the Apple store. People buy stuff at the Apple store. So if you take that concept—and so it has to be a place that’s not, you know, linoleum floors and Formica counters. It needs to be a place where people want to go and it doesn’t need to be as expensive as the marble on the floor in the Apple store or the glass staircase, right?

Kirkpatrick: It really does not need to have a glass staircase.

Bertolini: No, it does not need to have a glass staircase. But it can be a better fit and finish, it can be a better, higher trained individual who can sit with somebody like at an REI store, “Oh, you’re going on a hike? Well, let me show you how that can get done, here’s all the equipment you need.” It’s the same kind of thing. You have a bad ankle from running, let me show you the kinds of devices you can use.

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