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THE BAD GUYS
AETNA
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• History / CEO
• Core Products and Services
• Bad Guys vs. Good Guys – Strengths, Weaknesses, Financial Performance
• Recent Performance
• Role of Organization
• Keys about Aetna
Overview
2Confidential, unpublished property of Cigna. Do not duplicate or distribute. Use and distribution limited solely to authorized personnel. © 2015 Cigna
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• Establish 1853 incorporates to sell life insurance • 1861 start with participation policies that paid dividends to policy holders– caught industry by
surprise • 1865 annual income tax 1M increasing business 600% over the1861 – this gave Aetna the major
driver in the industry• 1867 Aetna entered the farm mortgage insurance, by 1925 43% of assets (94M) was invested in
farm mortgages• 1891 Aetna issued its first accident policy which entered them into the accident coverage• 1899 Aetna entered the health insurance business • 1902 Aetna entered the employer liability and workers compensation• 1919 Aetna offers group disability• 1951 Aetna introduced major medical coverage• 1960 Aetna entered into international venue….Canada • 1966 Aetna paid their first Medicare claim• 1968 Aetna listed on the NY Stock Exchange• 1973 Aetna created an HMO subsidiary• 1981 Aetna re-organized from a divisional to market focus structure• 1996 Aetna merges with US Healthcare
HISTORY
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• 2003 Mark Bertoloni – Head of Aetna’s specialty products– Former Executive at Cigna
• Hired 2007 Executive VP and Head of Business Operations
• 2010 named CEO of Aetna succeeding Ron Williams – Similar ideologies to Cigna:
– Consumer centered healthcare system– Value Based Payment Design– Expansion of health information technology usage
– Similar relationship to Cigna– Direct competitor– Shared RFP business– Internal Structure – Distribution channels
CEO
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• Health Plans– Medical, Pharmacy, Dental, Vision, Health Expense Funds
• Additional Benefits– Life Insurance, Disability Insurance, Voluntary Products
• Wellness & Behavioral Health– Health and Wellness Programs, Behavioral Health Programs
• Aetna membership facts:– 46 million lives– 23.7 million medical members– Approximately 15.5 million dental members– Approximately 15.4 million pharmacy benefit management services members– 18% Medicare Advantage Membership Growth– 40% of Premiums are Government Business
CORE PRODUCTS AND SERVICES
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• Aetna health care network facts:– Our network stretches across the country and across much of the globe:– More than 1.1 million health care professionals– More than 674,000 primary care doctors and specialists– 5,589 hospitals
• Geographically:– Based out of Hartford CT– International Medical Insurance – Medical, Dental, Life, Disability, Multiple Plan
Options, STD & LTD– Asia, – Europe– Latin America– Middle East & Africa, – North America
CORE PRODUCTS AND SERVICES
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Integrity – Do the right thing for the right reason.
Excellence – We strive to deliver the highest quality and value possible through simple, easy and relevant solutions.
Caring – We listen to and respect our customers and each other so we can act with insight, understanding and compassion.
Inspiration – We inspire each other to explore ideas that can make the world a better place.
Integrity. Excellence. Caring. Inspiration.
VALUE PROP
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GOOD GUYS VS BAD GUYS
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Cigna Aetna Comments -- compared to CignaCash 1420 1420 SimilarCash Flow 1994 3372 HigherTotal Revenues 34914 58003 HigherOperating Profit 3304 3499 SimilarOperating Profit Margin 9.5% 6.8% LowerNet Profit 2102 2041 SimilarNet Profit Margin 6.0% 3.6% LowerEarnings per Share 7.83 6.2 LowerReturn on Equity 19.3% 14.7% LowerRevenue Growth 7.8% 22.6% HigherNet Income Growth 42.0% 6.6% LowerEarnings per Share Growth 51.2% 6.6%
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• Similarities Seeking to grow in global
Seeking to grow in governmental
Seeking to grow in individual
Seek to double size in next 6 years
Grow ACO's
Customer-centric
Similar product lines
Moving to value-based payments
SIMILARITIES VS DISIMILARITIES
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• Disimilarities Smaller global footprint
Aetna has a population health solution as part of strategy
Intend to grow more rapidly
Higher dividends
Higher M&A activity
Larger MC presence (Humana)
Real-time decision support
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Today: Aetna after acquisition the acquisition of Humana
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