The Picture of Health Care

Charles Klippel, deputy general counsel of health insurance broker Aetna, outlines how strategic partnerships between health-care providers strengthens the entire industry

Modern Counsel: You’ve been with Aetna for 33 years. How has the role of partnerships between companies, organizations, or consumers changed in that time?

Charles Klippel: Traditional notions of partner, vendor, and customer are being reconsidered and, in many instances, are beginning to coalesce around a common idea: building durable, strategic alignments to achieve long-term objectives. Aetna is a much larger company today than it was three decades ago and has a much more specific focus on health. Yet, perhaps paradoxically, our success depends more than ever on our ability to build and maintain effective long-term relationships. This isn’t unique to Aetna. In an increasingly global and interconnected world, organizations—even very large organizations—are expanding their reach through an ever-broadening network of relationships.

MC: Can you give us an example?

CK: We established a strategic relationship with CVS Health for pharmacy management. CVS Health’s expertise allows Aetna to lower costs while enhancing the pharmacy experience for the populations we serve. Our relationship also allows us to connect their clinical expertise and consumer services with our own to help support our members’ health more effectively.

MC: What is the legal team’s role in that partnership?

CK: Traditionally, lawyers are brought to the table either to put a relationship together or to take it apart. The opportunity is to think about ways to maintain and strengthen the connection over the long term. Like all relationships, business alliances have ups and downs, and, inevitably, there will be difficult issues to be resolved. To the extent possible, my team and I try to get to know and spend time with our counterparts in our partner companies. By staying connected, we can help improve transparency, avoid misunderstandings, discuss potential issues, and, hopefully, anticipate changes in the relationship to keep the parties aligned.

There is a fringe benefit, and that’s the ability to share expertise. Aetna and CVS Health share accountability for compliance with a complex set of regulatory requirements. Approaching that as a shared task allows us to leverage our respective knowledge, experiences, and capabilities most effectively. Similarly, some of this country’s leading experts in IT and intellectual property law work in-house at IBM, another partner of ours. Their willingness to share insights has been invaluable to me.

MC: In his April 2014 letter to shareholders, Aetna’s chairman, CEO, and president said, “We believe health care as an industry is primed for revolutionary disruption.” What do you think he meant by that?

CK: Many components of our health-care system are extraordinary. But the system as a whole is fragmented and often difficult for consumers to navigate. Much of it remains focused on episodic intervention for acute illness, though as a nation we need to address the more fundamental challenges to population health.

One promising development in that regard is the formation of ACOs, accountable care organizations. These are groups of hospitals and doctors coming together to take a population-based focus to health care. To name just two examples, Aetna has partnered with Inova Health System in Virginia and Aurora Health Care in Wisconsin to establish ACOs. The goal of both relationships is to align financial incentives for providers who are delivering high-quality, cost-effective care. An article in Managed Care magazine praised the partnerships for “moving beyond alignment to integration.” This is what we hope to do more of, and what my legal colleagues and I are making happen.

MC: What advice do you have for other groups hoping to build strategic partnerships?

CK: Look for ways to establish and maintain long-term alliances with some of your existing counterparts that will solve common problems. We are seeing the rise of enterprise networks that, collectively, are bringing powerful new solutions to the marketplace. This isn’t just about vendors; it’s often about customers, too. Most of the people we serve today come to us on a sponsored basis through an employer, the government, or an affinity relationship. We have an aligned interest with those sponsors to promote the health of their members. We can do that most effectively through long-term collaboration with the sponsors, so we look for ways to partner with them, too.

MC: One of your customers, the United States government, is also your regulator. What’s that like?

CK: It’s challenging for both of us because of the dual nature of the relationship, but it’s also very important for both of us. In the 1960s, Aetna processed the first Medicare claim ever paid, and we’ve had a relationship with what is now the Centers for Medicare and Medicaid Services ever since. We’re also privileged to serve a number of state Medicaid programs and to provide benefits for many state and municipal employee groups. Some of these are long-standing relationships, and it is wonderful to have such continuity. Again, our fundamental interests are very much aligned with promoting the long-term health of the populations we share. The added dimension to sustaining these relationships is to be continuously vigilant with respect to regulatory compliance. Hopefully, we are also demonstrating some of the same characteristics—communication, transparency, collaboration—that help sustain our other long-term relationships.

MC: According to the Commonwealth Fund’s 2014 report, which was prepared before the Affordable Care Act went into effect, the United States ranks last of 11 nations surveyed in the quality, efficiency, effectiveness, and accessibility of its health-care system. Do you think the changes you’ve outlined will improve that ranking?

CK: That’s a complex question, but I believe so. I am encouraged by the broad consensus that is emerging around the [Institute for Healthcare Improvement] Triple Aim goals, coined in 2007 and just now starting to bear fruit. The shift in focus toward population-oriented health that is evident in ACOs and the emerging empowerment of consumers to engage more effectively in their care and health decisions are both significant trends in the right direction. It is not going to be easy, and true transformation is a generational idea. However, there are few things more important to any of us than our health, and I would not underestimate the long-term power of informed consumers to drive a fundamental realignment of the system. Hopefully, through a concerted focus on collaboration, we’ll meet them more than halfway.