In 2014, Aetna (AET) made substantial investments in growth initiatives mainly in the government-sponsored and Healthagen business and consumer engagement technology.
To increase the exposure of its business portfolio to the fast-growing government-sponsored business, Aetna aggressively invested in Medicare, Medicaid, and dual eligible programs. From 2010 to 2014, Aetna made key acquisitions—like Coventry Health, Prodigy Health, and the Medicare supplement business of Genworth—to increase its MA (Medicare Advantage) and supplemental Medicare member base.
Aetna also expanded its Medicaid network. It provides services to 2.1 million members spread across 17 states in the US. The company ventured into the market of dual eligibles—people who are eligible for both Medicare and Medicaid benefits—by participating in demonstration programs introduced by state governments. Aetna has been contracted by four states—Ohio, Illinois, Michigan, and New York—to provide insurance services to dual eligibles in 2015.
The health insurance industry (XLV) has been focusing more on health technology solutions to improved health provider payment models and the overall quality of care. Healthagen is Aetna’s portfolio of health technology offerings—like ACS (Accountable Care Solutions), Medicity, and ActiveHealth. Combining the data analytics and electronic data exchange capabilities of ActiveHealth and Medicity, respectively, Aetna deployed ACS services in collaboration with health providers.
Health insurance companies—like Aetna, Cigna (CI), Wellcare Health Plans (WCG), and Anthem (ANTM)—enter into contracts with groups of health providers called ACOs (accountable care organizations). They provide quality services in a cost-effective manner. These ACOs are rewarded for improved performance by being paid part of the savings they created through the reduced use of medical resources.
Consumer engagement tools
Aetna invested capital to improve its iTriage application. It helps users select the appropriate healthcare facility based on their needs and geographical location through mobile and Internet applications. In 2014, the company also acquired bswift—a private exchange platform—to improve the buying experience for members purchasing Aetna’s plans.