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Aetna CEO’s advice on health care

Marketplace Staff Mar 5, 2009

Aetna CEO’s advice on health care

Marketplace Staff Mar 5, 2009


TESS VIGELAND: One of the players at the health care reform table is Ronald Williams, the CEO of Aetna Insurance. Williams has been among the most outspoken insurance executives in supporting significant changes to the health care system.
He spoke with my colleague Kai Ryssdal about some of the issues they’ll need to consider during this two-day meeting in Washington.

KAI RYSSDAL: You have said, as have many, many others, that it is time for change in the American health care system, that it’s time for a transformation. What do we do? What are the first steps?

RONALD WILLIAMS: I think it really starts with this recognition that we have an excess of 45 million people in the country who are uninsured. And the question is what types of solutions and ideas can we undertake to help bring them into the system.

Ryssdal: Well, the president has said he wants some kind of mandatory universal coverage. Are you buying that?

WILLIAMS: I have been a strong proponent of getting everyone in the system and keeping everyone covered.

Ryssdal: So the government should have the power to make us all go out and buy some kind of insurance. Is that what you are saying?

WILLIAMS: Well, I think if we’re going to have a requirement that everyone have equal access to insurance, you really have to have a way to make certain that everyone is expected to participate. There are lots of different mechanisms, and we would leave it to the legislative bodies to figure out the right answers.

Ryssdal: Who is going to pay, though, sir?

WILLIAMS: One I would say that the employer-sponsored system is a huge part. So employers will pay a big part as they do today. I think individuals would pay. And I think there are opportunities to look at the individual households and figure out what the right way to induce funding. We have tax credits we can provide. There are other things we can do.

RYSSDAL: Where does the role of the private corporation such as yours come in? Are you willing to take slightly less profit to make sure everybody gets covered?

WILLIAMS: We think we make a fair and reasonable profit. I think people dramatically overestimate the amount of profit that we make. We make about 6 percent after tax, which we think is a fair and reasonable number. And we believe we can bring more people in — that we can be more efficient — and really offer them a product at a lower price.

Ryssdal: Why is it that this time around in health care reform, 15 years after we tried it with the Clintons, the health insurance industry, companies such as yours, seem to be taking it a lot more seriously, understanding the need for some kind of change.

WILLIAMS: Well, I think what we’re looking at is a recognition that health care costs are increasing dramatically. And I think one of the things important for everyone to understand is that health care premiums are a direct reflection of health care costs. And I like to use the example that it’s as if we have a temperature of 104, we take the thermometer and it gives us a reading of 104 ,and we blame the thermometer for our temperature. The reality is our premiums are reflective. And I think we in the industry understand that unless we collaborate with physicians, with hospitals, with plan sponsors, and with the government and develop private-public partnerships that can slow down the rate of increase, we’re looking at health care costs doubling between now and 2017.

Ryssdal: To continue with your thermometer analogy there, nobody actually hates their thermometer, I’d venture to say a lot of people aren’t really thrilled with their health care companies.

WILLIAMS: It’s fair to say that we sit in a very difficult intersection. We have the employer who often purchases the health plan, and we go to the employer, and we say, “Yyou can buy good, you can better, or you can buy the absolute best where your employers will not pay a nickel for anything.” And the employer says, “You know, I wish I could buy that.” So there really are purchase decisions going on there. And then you have the member who when they select the plan thinks about their household budget and affordability and perhaps selects a plan that isn’t as comprehensive as they would if they knew they were going to be an extensive user of the system.

Ryssdal: Ron Williams the chairman and CEO of Aetna. Mr. Williams thanks a lot for your time.

WILLIAMS: Thank you.

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