Next.

Mark Bertolini used to be known for his bare knuckle leadership, but now the former CEO of the health insurance giant Aetna has swapped dollars and market 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 capitalist ways.

So what did change his tune?

He told Hari Sreenivasan.

Should health care be a basic human right?

Yes, that was an easy answer.

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 countries.

Governments in other countries spend half as much as we do.

Why?

Why do we have these outcomes?

Well, I think we have a confusion between the investment decision and the financing decision.

So if you look at the OECD nations, the United States is 34 out of 34 of the 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 and we always see these nations.

And when you look at the split between health care and social, we are the only country that spends more than 42% on health care.

Everybody else spends less and they spend the rest on social programs.

We spend 62% on health care.

So what you're seeing is the collision of a social experiment failing into the health care system.

And things like the opioid epidemic.

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?

It won't.

And here's why.

First, let's define what Medicare for All is or a single payer.

And when I ask that question, most people can answer it.

When I ask people, tell me a country that has it, they usually are for the UK or Canada.

Neither of those countries is a single payer system.

There's 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 left.

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% of people's life expectancy is related to the clinical care they got.

30% is related to the genetic code they have.

And 60% 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.

And by the way, and that 10% 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 the system will fail because they'll be overburdened with things that can't deal with it.

When the Affordable Care Act came around and you were running Aetna, you were in, I want to say 15, 17, 17 marketplaces, by the time you left, you'd left almost all of them.

You called these marketplaces death spirals.

Why?

What was happening was the whole model of insurance is to manage large populations of risk And when you price the product, and particularly in the Affordable Care Act, we had a 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 on what it would take.

And what kept happening is because of the political dialog 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 the payment 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.

Let's talk a little bit about kind of the business side of health care, the merger and the acquisition of CVS and Aetna.

You've got the Cigna Express Scripts deal that also happened.

You've got other ones kind of in the pipeline.

And these mergers seem good for shareholders, but how are they good for consumers?

Well, if we're going to solve the social determinant problem, we need to get into the home.

We now have 60% of the American public who are $400 away from a financial disaster.

That's less than most of their deductibles.

The next 20% were within $45,000 of a financial disaster.

And the current system is so costly by the virtual the way it's constructed and operated, the health care system that we have to get closer to the home in the 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 placemaking.

So that mean as 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 I don't have to go to a hospital.

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 I always have that fear of free falling 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?

Now, you personally have experience with rare disease.

Your son had one.

What did that teach you about the health care system?

It's not a system.

It's not a system.

It's a bunch of rifle shots by people who are really talented marksmen.

But aren't necessarily looking at the whole person.

Tell us about what your son has.

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 ever got 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 can chase the T cells away, we could cure the cancer.

But that means we need to do a bad 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 Wow.

Right.

Six months or graft versus host disease.

So we chose the graft versus host disease, Rob.

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.

So he wasn't getting he wasn't getting good information.

The residents would show up at 2:00 in the morning and look over their shoulder to see how are you doing the renal dosing math right at 2:00 in the morning after you've been up for 24 hours.

But most people do not have an advocate like you living in their hospital room.

Right.

But we need to allow for that.

So one of the things we did at Apnea 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 were sick or in crisis could do it without losing pay.

So he was going to get a secondary disease from the treatment.

Yes.

And that's what destroyed his kidneys, which then I gave him my left kidney in 2000 75 years later because the that that cure went after his kidneys.

Now, he's 33 years old.

He's got a beautiful daughter and another one on the way.

And I couldn't be happier for him.

How much do you think that medical care cost him?

Oh, I know it was was over $2 million In the end analysis, some of which we had to pay out of pocket.

How good was his insurance?

It was good.

It was good.

It was very good.

Yeah.

You know, you personally also have had an experience with the health care system that or the rifle shots, as you call it, that most people wouldn't.

Tell us about what happened.

I you know, 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 in the tree, hit me in the cracks of my neck on my left shoulder.

I snapped my scapula in half.

I macerated my brachial plexus.

I pulled the nerve root from my left arm, otherwise spinal cord.

And then immediately unconscious.

And I slipped head-first backwards down into water where the water ran behind my neck for 2 hours while they tried to figure out how to get me out of there.

And that saved my life.

So I broke C to see three C5, C6, and T one.

So the cold water was what freezing you 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 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 on pain meds.

No yoga, meditation, baby chanting.

I'm assuming that yoga and meditation is not what the doctor ordered.

What did they prescribe you?

They try me.

Pain meds.

So I was on seven different narcotics for the first year.

I was on Neurontin, comprar Vicodin, OxyContin, Fentanyl patches, and Dilaudid for breakthrough pain.

Yeah.

And and it never stopped the pain.

I just didn't care.

And so high all the time.

Not.

Lucky for me.

And given my experiences in high school, in 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, I was like, wah, wah, wah.

Everything was just really weird.

Right?

And and so, you know, it was recommended to me by by my wife that should you get cranial psychotherapy.

And so we looked for creating a single therapist, find one and going, how does this help?

And And I went for the first visit.

It was okay.

Taught me something about breathing and managing neuropathic pain by the fourth visit, I was like, oh, my gosh, this is amazing.

I started coming off my drugs, and over a period of six months, I was off all my drugs.

What does that tell you when on the one hand, your day job is talking about figuring out the prices for all the very drugs that 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 health care companies in the country.

That's why I brought it to work.

I said, oh, my gosh, that's amazing.

I was doing the cranial psychotherapy and then I started doing yoga because I couldn't run every morning.

And then I got into yoga.

The the the spiritual side of it, you know, read the Upanishads, the biography, Geeta, 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, the times of let's do yoga meditation for everybody.

And they're like, you know, he's really hit his head pretty hard.

Yep.

The CMO, the chief medical officer, comes to me about an hour later and goes, Yeah, this is voodoo medicine, right?

Everything's crazy.

I said, Well, Lonnie, let me respond to this name.

What do you think, Lonnie?

I mean, 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 categorize people by stress quintile and the highest quintile stress in our company, and people are spending 1500 dollars more a year than on health care than anybody else.

The more stressed you are, the more likely you are to spend on health care.

Right.

And now it's dollars and cents, 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 in heart rate variability of all the employees, but even more so, the people in the top quintile And it paid for itself.

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?

We offered it to all of the people so people would have to want to pay for it.

If they buy it.

They have to understand the the tradeoffs which we offered it to everybody.

The biggest problem with the program for a lot of our employers where 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 because it paid back our health care costs dropped 7% the next year, which dropped 7%, not a reduction in trend.

They dropped 7% the next year.

So that's what, 50,000 people?

Yeah.

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 and 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?

Here's the issue.

We have two economies in the United States, not 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 and if you're in the wage economy, you haven't gained anything you actually have lost.

Right.

Right.

Because cost of goods have gone up, everything else.

And for those in the wealth economy, they've 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 1972 to 2008, it was called the middle class because they thought they had an asset that was a wealth asset was called their home and they use it like a wealth asset and it wasn't.

And when it went away, a vast swath of our population fell into that class of just a wage economy.

Look what the people are going to say.

Listen, clearly, you know that you're part of the wealth economy, right?

Since in those past 40 years the average raise has been about 11% for the average line worker.

Average CEO compensation has gone up roughly 900%.

Right.

Right.

Your exit package out of Aetna is rumored to be around a half a billion dollars right.

How.

How do we reconcile this?

I mean, yes, the stock of your company is four times as big when you walked in and you've increased performance for shareholders etc.

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.

And that's what we did with our employees.

When we raise minimum wage from 12 to $16 an hour and wiped out health care costs for 7000 of our employees.

We said, You know what, we've got to transfer and we're going to pay more.

So I paid 62% of all my health care costs, including my premium.

We're going to not take raises my senior team to 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 comp for the for the front line.

So we did that.

We made that tradeoff Does that help become a more profitable company?

Because going to look at this and say, I don't know about all this, all I want is my shares to go up every quarter and January 2nd 20, 15 I announce the roll out of this program.

I was in front of the JPMorgan conference where 250 million of our 370 million shares were there.

And I said you know, we're doing this.

I didn't get one pushback from our shareholders.

I got, I got applause from people and and it was the beginning of a whole lot more things like the PTO bank.

We now pay student loans as a company.

We now doubled our tuition assistance yes, 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, you know, rumored more than half a billion dollars I got, it was all stock that I never sold.

So I never traded in the stock.

My compensation based salary didn't increase until the last year.

So it was flat the whole time, although it was very handsome.

Yeah, right.

But my stock that I got priced into what my compensation was set in the company coffers and never moved until the deal closed.

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 and social and economic ecosystems that are so big that they can't do it, they can't move, they just argue with one another and get back to local community and make investments there.

Marc Morial, anyway, thanks for joining us.

Thank you.

Good to see.