Mark Bertolini on the State of Healthcare in America

CHRISTIANE AMANPOUR: Next, Mark Bertolini used to be known for his bear knuckled leadership, but now the former CEO of the health insurance giant Aetna has swapped dollars and markets for the public good. His new book, “Mission-Driven Leadership: My Journey as a Radical Capitalist” chronicles the wake-up call he needed to change his capitalists ways. So, what did change his tune? He told our Hari Sreenivasan.

HARI SREENIVASAN: Should health care be a basic human right?

MARK BERTOLINI, FORMER AETNA CEO: Yes.

SREENIVASAN: That was an easy answer. All right, I mean, I’m saying we have somewhere around, what, 28-ish million people uninsured. We’ve got our private sector that spends three times as much as comparable counties; governments in other countries spend half as much as we do. Why do we have these outcomes?

BERTOLINI: Well, I think we have a confusion between the investment decision and the financing decisions. So, if you look at the OECD nations, the United States is 34 out of 34 of the OEC nations in value for quality rendered in health care. When you look at the overall spend of health care and social costs and you add the two together, we are 12th in the OECD nations. And when you look at the split between health care and social, we are the only country that spends more than 42 percent on health care, everybody else spends less and they spend the rest on social programs. We spend 62 percent on health care. So, what you’re seeing is the collision of a social experiment failing into the health care system in things like the opioid epidemic.

SREENIVASAN: Right now, political season is continuing, you’ve got presidential candidates talking a lot, several of them propose on the Democratic side, a Medicare For All type of system. Will that fix the challenges that you’re talking about? If not, why not?

BERTOLINI: I won’t and here’s why. First, let’s define what Medicare for All is, for a single payer. And when I ask that question, most people can’t answer it. And when I ask people, well tell me a country that has it, they usually offer the U.K. or Canada. Neither of those countries is a single-payer system. They’re socialized medicine. It includes not only the financing of health care but the provision of health care. If that’s what we want, then we have a much bigger lift. But, we should be talking to people about what matters to them about their health care. What is it about my health that gets in the way of the life I want to lead? And I would introduce this notion that the opposite of health is poverty and the opposite of poverty is health. It’s not wealth. It’s, I can live a life in a way that is comfortable to me. And what we’re finding now is that 10 percent of people’s life expectancy related to the clinical care they get, 30 percent is related to the genetic code they have and 60 percent is related to where they live. So, your zip code is now more determinant of your health and longevity in life than your genetic code or the health care system itself. Oh, and by the way, on that 10 percent we’re spending $3.2 trillion, because we’re catching all of the stuff coming out of lifestyle. So, until we fix that social determinant model, we’re going to continue to have sicker and sicker people and they system will fail because they’ll be overburdened with things they can’t deal with.

SREENIVASAN: When the Affordable Care Act came around and you were running Aetna. You were in, I want to say, 15.

BERTOLINI: Seventeen.

SREENIVASAN: 17 marketplaces, by the time you left, you’d left almost all of them. You called these marketplaces death spirals. Why?

BERTOLINI: What was happening was — and the whole model of insurance is to manage large populations of risk. And when you price the product, in particularly in the Affordable Care Act, we had to price 18 months before the period actually began, by the way — by virtue of the way the government built the program. And I remember sitting with President Obama having the conversation, give us time to stabilize the markets, look at this as a three year investment. And we did. And we had a set of metrics that we were monitoring and what it would take. And what kept happening is, because of the political dialogue in the Senate and the House over what, quote, unquote, Obamacare meant. Nothing got solved politically, which it needed to be. We needed legislation to change the things that would stabilize the markets. They kept playing with the risk pools and the risk adjustment and the — and — and the systems in a way that didn’t allow us to stabilize the market. And so for us, it was when you get the market in shape and you’re ready to play by rules, and rules of law, then we will be willing to come back in.

SREENIVASAN: Let’s talk about kind of the business side of healthcare, the merger, the acquisition of CVS and Aetna, you’ve the Cigna Express Scripts deal that also happened, you’ve got other ones kind of in the pipeline. Now these mergers seemed good for shareholders, but how are they good for consumers?

BERTOLINI: Well, if we’re going to solve the social determinant problem, we need to get into the home. We now have 60 percent of the American public who are $400 away from a financial disaster. That’s less than most of their deductibles. The next 20 percent are within $4,000 to $5,000 of a financial disaster. And the current system is so costly, by virtue of the way it’s constructed and operated, the healthcare system, that we have to get closer to the home and community. And so our strategy was to be part of the CVS organization to generate a local presence in every community so that we can arbitrage the high cost health care system by offering more in the home and more in the community. It’s place making.

SREENIVASAN: So does that — so that would mean that CVS becomes a little bit more of an urgent care center, or that I’m getting not just my drugs there, but some of my medical services there so that I don’t have to go to a hospital?

BERTOLINI: Think of it as a community center, and every community is different. So I would argue in low income neighborhoods, where people are on the edge of poverty and always have that fear of freefalling into poverty in a very significant way, what can we do to help create a stronger safety net for them? If you have a significant event that throws you into poverty, try and figure out how to get child care, transportation, schooling, all those things. And so couldn’t we create a store that does that? Couldn’t we create a store that has a concierge service that says let me help you figure out what the next steps ought to be so that you don’t fall through the hole and lose everything you have?

SREENIVASAN: Now you personally have experience with rare diseases. Your son had one. What did that teach you about the system?

BERTOLINI: It’s not a system. It’s not a system. It’s a bunch of rifle shots by people who are really talented marksman but aren’t necessarily looking at the whole person.

SREENIVASAN: Tell us about what your son has.

BERTOLINI: My son had T-cell gamma delta lymphoma. Only 47 people have been diagnosed, all men, all between the ages of 17 and 35. He was 16. So he was the youngest to ever get the disease. They told me he had six months left. My wife and I took him around to see doctors, found a doctor in Boston who said, you know what, the T-cells are cancerous and those are the cells that live under your skin, if we could chase the T-cells away, we could cure the cancer but that means we need to do a bone marrow transplant, which is going to create graft-versus-host disease, which will kill the T-cells. And if we can solve the problem of him surviving graft-versus-host disease, he’ll live.

SREENIVASAN: Wow.

BERTOLINI: Right. Six months or graft-versus-host disease. So we chose the graft-versus-host disease route. I moved into his hospital room with him, because it wasn’t just the medical care, it was the food on his plate. He was allergic to legumes and they kept showing up on his plate. You know, he wasn’t getting — he wasn’t getting good information. The residents would show up at 2:00 o’clock in the morning, I’d look over their shoulder to see, you know, are you doing the renal dosing math right at 2:00 o’clock in the morning after you’ve been up for 24 hours.

SREENIVASAN: Most people do not have an advocate like you living in their hospital room.

BERTOLINI: Right. But we need to allow for that. So one of the things we did at Aetna is we created a PTO bank, all of us could donate our excess PTO to a bank where employees who needed to be with their family when they are in sick or in crisis could do it without losing pay.

SREENIVASAN: So he was going to get a secondary disease from the treatment?

BERTOLINI: Yes. And that’s what destroyed his kidneys, which then I gave him my left kidney in 2007, you know, five years later, because that — that cure went after his kidneys. Now he’s 33 years old, he’s got, you know, a beautiful daughter and another one on the way and I couldn’t be happier for him.

SREENIVASAN: How much do you think that medical care cost him?

BERTOLINI: Oh, I know what it was. It was over $2 million. In the end analysis. Some of which we had to pay out of pocket.

SREENIVASAN: How good was his insurance?

BERTOLINI: It was good. It was good. It was very good.

SREENIVASAN: You, personally, also have had an experience with the healthcare system that — or the rifle shots, as you call it — that most people couldn’t. Tell us about what happened.

BERTOLINI: I was skiing with my daughter. I went to check on her, I was going at a high rate of speed, I caught my left edge of my ski, and a tree hit me in the crux of my next and left shoulder. I snapped my scapula in half, I macerated my brachial plexus, I pulled the nerve root from my left arm out of my spinal cord. And then immediately unconscious and I slipped head first down into water, where the water ran behind my neck for two hours while they tried to figure out how to get me out of there. And that saved my life, because I broke C2, C3, C5, C6 and T1.

SREENIVASAN: So the cold water was, what? Freezing you?

BERTOLINI: Yes. It was preventing the spinal cord from rupturing. I mean, I have what you would call a quadriplegic injury that should have either resulted in death or quadriplegic result, and here I am, well I’m walking around with a lot of pain in my left arm all the time. It hurts all the time. It’s hurting now. Never stops —

SREENIVASAN: You on pain meds?

BERTOLINI: No. Yoga, meditation, bit of chanting.

SREENIVASAN: I‘m assuming that yoga and meditation is not what the doctor ordered. What did they prescribe you?

BERTOLINI: They prescribed me pain meds. So I was on seven different narcotics for the first year. I was on Neurontin, Keppra, Vicodin, OxyContin, Fentanyl patches and Dilaudid for breakthrough pain. And it never stopped the pain. I just didn’t care, I was so high all the time. Now, lucky for me, and given my experiences in high school and college, I never really had an addictive personality, so I never got hooked on drugs. So I just found it to be — you know, it was like — it was like Charlie Brown’s mother in the cartoons when she talked. It was like “wah, wah, wah” — everything was just really weird, right? And so, you know, it was recommended to me by my wife to get craniosacral therapy. And so we look for a craniosacral therapist, find one and I’m going, how does this help? And — and I went for the first visit. It was OK. Taught me something about breathing and managing neuropathic pain. But by the fourth visit, I was like, oh my gosh, this is amazing and I started coming off my drugs. And over a period of six months, I was off all my drugs.

SREENIVASAN: What does that tell you when on the one hand, your day job is talking about figuring out the prices for all the drugs you were prescribed, and here are — here’s a completely different way to think about your health that’s working for you, the boss of one of the largest healthcare companies in the country.

BERTOLINI: That’s — that’s why I brought it to work. I said, “oh my gosh, this is amazing.” I was doing the craniosacral therapy, and then I started doing yoga because I couldn’t run every morning, and then I got into yoga, the spiritual side of it. You know, read about all this stuff and sort of got really deep into it, and said, you know, we should do this for everybody in the company. And so I came to work one day, I was the president of the company at the time, said, let’s do yoga and meditation for everybody.

SREENIVASAN: And they’re like, you know, he’s really hit his hard pretty hard.

BERTOLINI: Yes. The CMO, the chief medical officer comes to me about an hour later and goes, you know, this is voodoo medicine, right? Everybody thinks you’re crazy. And I said, well, Lonny — Lonny Reisman was his name — well, what do you think, Lonny, what would it take? And he said, well, we have to do a double blind study. So we did a double blind study, heart rate variability pre and post, looking at — you know, we categorized people by stress quintile. In the highest quintile stress in our company, people are spending $1,500 more a year more than — on healthcare than anybody else.

SREENIVASAN: So the more stressed you are, the more likely you are going to spend —

BERTOLINI: Yes.

SREENIVASAN: — on healthcare.

BERTOLINI: Right.

SREENIVASAN: And now it’s dollars and cents.

BERTOLINI: Right. And so I said, well let’s see what happens. And so we did this whole study. And — and 12 week program, mindfulness and yoga, and we had a huge drop of heart rate variability of all the employees, even more so the people in the top quintile. And it paid for itself.

SREENIVASAN: So if you’re a guy that can do this for his company, and you see the benefits, why not lay this out for all of the people who are on your insurance plans?

BERTOLINI: We offered it to all the people. So people would have to want to pay for it if they buy it. They have to understand the tradeoffs, which we offered it to everybody. The biggest problem with the program for a lot of employers were they didn’t have the room or they didn’t want to give the people the time off. I give them the time off during the day to do the hour of therapy. It was well worth it.

SREENIVASAN: Because it paid back.

BERTOLINI: Our healthcare costs dropped seven percent the next year.

SREENIVASAN: Which for —

BERTOLINI: Dropped seven percent, not a reduction in trend, they dropped seven percent the next year.

SREENIVASAN: So that’s what? 50,000 people?

BERTOLINI: Yes.

SREENIVASAN: Look, you’re a guy who has means and we can talk about that, but how has this process taught you from your own life, your son’s life, running a company, about all these people that don’t have the means to afford this kind of care? I mean, getting back to that first question, should health care be a basic right? How can I afford this?

BERTOLINI:Here’s the issue. We have two economies in the United States, not an economy. We have a wage economy and we have a wealth economy. And when you look at basic wages since 1970, they’ve been pretty much flat on a real basis. And if you’re in the wage economy you haven’t gained anything, because you’ve actually have lost.

SREENIVASAN: Right.

BERTOLINI: Because costs of goods have gone up, everything else. And for those in the wealth economy, have been able to invest in the market, invest in money market funds or school funds forever for the kids, they’ve done really well. And we had this one group of people that we fooled from 1970 to 2008, it was called the middle class, because they thought they had an asset that was a wealth asset, it was called their home. And they used it like a wealth asset, and it wasn’t. And when it went away, a vast swath of our population fell under that class of just a wage economy.

SREENIVASAN: Look, people are going to say, listen, clearly you know that you’re part of the wealth economy. Since — in those past 40 years, the average raise has been about 11 percent for the average line worker, the average CEO compensation has gone up roughly 900 percent.

BERTOLINI: Right.

SREENIVASAN: Right. Your exit package around Aetna is rumored to be around a half a billion dollars.

BERTOLINI: Right.

SREENIVASAN: How do we reconcile this? I mean, yes, the stock of your company is four times as big as when you walked in and you’ve increased performance for shareholders, et cetera, but where do we come to a point where we say, hey, guess what, more of my staff need to be paid better? Perhaps it’s taking something out of our C-level executive pockets and investing back into our companies.

BERTOLINI: And that’s what we did with our employees when we raised minimum wage from $12 to $16 an hour and wiped health care costs for 7,000 of our employees. We said, you know what, we’ve got to transfer and we’re going to pay more. So, I paid 62 percent of all my health care costs including my premium. We’re going to not take raises, my senior team didn’t get raises for four years, and whenever the budget doesn’t balance, we’ll take it out of the incentive comp pool for the senior team, versus taking it out of merit comp for the front line. So, we did that. We made that trade-off.

SREENIVASAN: Does that help become a more profitable company? Because shareholders —

BERTOLINI: It did.

SREENIVASAN: can look at this and say, I don’t know about all this, all I want is my shares to go up every quarter.

BERTOLINI: On January 2, 2015, I announced the roll-out of this program. I was in front of the JP Morgan conference, where 250 million of our 370 million shares were there and I said, we’re doing this. I didn’t get one pushback from our shareholders. I got applause from people. And it was the beginning of a whole lot more things, like the PTL Bank, we now pay student loans as a company, we now doubled our tuition assistance. We did a lot of things like that to improve the quality of life, because we gave the organization permission to take care of one another. And so, of the rumored more than half a billion dollars I got, it was all stock that I never sold. So, I never traded the stock. My compensation base salary didn’t increase until the last year, so it was flat the whole time, although it was very handsome.

SREENIVASAN: Yes.

BERTOLINI: Right? But, my stock that I got priced into what my compensation was sat in the company coffers and never moved until the deal close. And more than half of it is now sitting in a foundation that’s focused on education environment and community sustainability. This very model of moving away from relying on the federal government to try and triangulate on social uneconomic ecosystems that are so big that they can’t do it, they can’t move, they just argue with one another, and give back to local community and make investments there.

SREENIVASAN: Marl Bertolini, thanks for joining us.

BERTOLINI: Thank you. Good to see you, Hari.