As I wrote last week, one of the nation's biggest employers -- Boeing -- is pioneering a concept in providing health care benefits to its employees that eliminates insurance companies as middlemen.
What
Boeing is doing represents a seismic shift in health care financing and
delivery that potentially will have more far-reaching effects than
Obamacare, primarily because it is coming from the private sector, not
the government. It is a shift that the big health insurers have been
anticipating and preparing for since long before the Affordable Care Act
was enacted.
We tend to think that insurers with well-known
brands like Aetna, Blue Cross, Cigna and UnitedHealthcare have been
around forever and likely will always be with us as they are currently
structured.
But the large corporations dominating the health
insurance landscape bear little resemblance to the companies they were
when they first appeared on the scene. Their current metamorphosis is
just a continuation of a corporate evolution.
I'm not suggesting
they will disappear, but I am willing to bet that in a few years, they
will not be providing our health insurance coverage -- at least in the
way they do now. Instead, they will have transformed into companies that
make most if not all of their profits in non-insurance lines of
businesses.
You only have to look back a few decades to see just
how dramatically the big insurers remade themselves as a result of
pressure from both Wall Street and the marketplace.
Take Humana,
where I used to work, as an example. Humana began as a nursing home
company in 1961. When I joined the company 27 years later, it had sold
all of its nursing homes and become the world's largest hospital
company. A few years later, it sold all of its hospitals and became
Humana the managed care company.
I left Humana to join Cigna in
1993. Cigna, which started out as a fire and marine insurance company,
had by then morphed into one of the world's largest multi-line insurance
companies. Its peers were Aetna -- which initially was just a life
insurer -- MetLife, Prudential and Travelers. All were selling health
insurance by this time. But within a year or so after I joined Cigna,
Wall Street decided that multi-line insurers were dinosaurs and insisted
that the companies divest some of their businesses so they could focus
on just one or two.
MetLife, Prudential and Travelers all sold
their health care business and Aetna and Cigna decided to get out of the
property and casualty business to focus on health care.
Over just
the last 25 years, all of these companies had changed dramatically to
concentrate on businesses that were deemed to be more profitable than
other business lines that once defined them.
As for
UnitedHealthcare and WellPoint, few people had even heard of them 25
years ago. But thanks to cash generated by the divestiture of their
original non-insurance businesses, they were able to buy their way into
managed care. They quickly ballooned in size to become the nation's
largest health insurers.
Now that the profit margins of those big
companies' core health insurance businesses are under intense pressure
because of Obamacare and changes in the marketplace, you can rest
assured that their top executives are at work on new transformation
blueprints.
If you look at their websites, you'll be hard pressed
to even find the word "insurance." They all are in the process of
redefining their missions -- and looking outside of the U.S. for new
opportunities. Rather than describing what they sell in any explicit
way, they use vague language that seeks to describe what they have
become or aspire to be and do.
Humana says its primary focus "is
on the well-being of its members." Aetna says it is "transforming health
care to create healthier communities, a healthier nation and a
healthier world." How? By "creatively destroying the current business
model to enable a new one," said CEO Mark Bertolini at a health care
technology conference earlier this year.
Cigna CEO David Cordani
says his team "is proud to serve as a catalyst for change in the more
than 30 countries in which we operate around the world."
According
to UnitedHealth Group's website, it is "the most diversified health
care company in the United States and a leader worldwide in helping
people live healthier lives..."
WellPoint says it is "working to transform health care with trusted and caring solutions."
Even
the nonprofit Blue Cross plans are reinventing themselves. Florida's
largest insurer, Florida Blue, earlier this month unveiled its new
corporate parent, GuideWell. Said CEO Pat Geraghty at the Medifuture
conference in Tampa: "We're not here to be the best plan in Florida.
We're here to be the best health solutions company in the United
States."
Wendell Potter
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