Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

[Music]

Mark Masselli: This is Conservations on Healthcare, I am Mark Masselli.

Margaret Flinter : And I am Margaret Flinter .

Mark Masselli: Well Margaret , the President has announced a number of measures
aimed at reigning in the high cost of prescrip tion drugs in the country, a blueprint for
bringing down the nation’s high drug price s .

Margaret Flinter : The President’s blueprint is focusing on a few key issues . Most
notable among them is the high prices set by manufacturers and clamping down on
wha t they call as foreign governments, and this is a “free riding off of American
innovation.” Well Mark , as we know the drugs that are sold here at extremely high
prices are much cheaper in other industrialized countries. So, how he plans to exert
control over those other countries and their prices will be extremely interesting to see.

Mark Masselli: One thing the President has said he would not do is to allow Medicare to
negotiate drug prices. The administration says it plans to create different incenti ves for
addressing drug cost for Medicare recipients including industry and centers for offering
lower drug prices.

Margaret Flinter : Well , this speaks to a number of changes that we see emerging
across the healthcare landscape being touted as waste terr ain in health cost and that
brings us to our guest today , Karen Lynch is President of Aetna which plans to merge
with CVS. The thinking behind this merger of the nation’s largest pharmacy retail chain
and the nation’s third largest insurer is that the two entities can work together to bring
accessible healthcare into neighborhood settings and they say that can help bring
insurance cost down.

Mark Masselli: The $ 6 9 billion deal is still awaiting federal approval, looking forward to
that interview , Margare t .

Margaret Flinter : And Lori Robertson will stop by , the Managing Editor of
FactCheck.org, but no matter what the topic you can hear all of our shows by going to
chcradio .com or find us on iTunes.

Mark Masselli: And if you have comments , please email us at [email protected] or
find us on Facebook or Twitter . We love hearing from you.

Margaret Flinter : We will get to our interview with Karen Lynch, the President of Aetna
in just a moment.

Mark Masselli: But first, here is our producer , Marianne O' Hare , with this week's
headline news.

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

[Music]

Marianne O'Hare: I’m Marianne O'Hare with these healthcare headline s. Another
outbreak of Ebola in Africa. The outbreak recently confirmed in a remote village area of
the Democratic Republic of Congo . Unli ke the epidemic in West Africa a few years ago,
public health officials have quickly sprung into action to contain the threat. From 2014
to 2015, the Ebola epidemic spread across several West African countries, infecting
almost 30,000 people with more tha n 11,000 deaths, many of them frontline clinicians
treating the outbreak. In a short time since that epidemic, scientists have created an
Ebola vaccine that has proven effective in preventing infection at least in a short term.
They are rushing some 4 , 00 0 doses of the vaccine to the affected region. And m edical
response units are also being deployed to effectively contain the threat. The World
Health Organization has issued a global call to end the use of trans fat s in processed
foods distributed around the world by 2023. Trans fats have been added to process ed
and snack food for decades but have since been identified as a key contributor to
obesity, heart disease and early death. The WHO believes a ban will save a half a
million lives per year.

Drug prices are going to remain nonnegotiable for the Medicare program for the time
being , the President announcing plans to reign in the high cost of pharmaceutical prices
but skipped a key element that many observers felt was necessary overriding Federal
Poli cy preventing the Medicare program from negotiating drug prices for the tens of
millions of seniors on the program.

The President did single out pharmacy benefits managers, the so - called middle men
who negotiate drug prices between companies and payers. O ne in four Americans in
the meantime had said they cannot afford the cost of their prescription drugs. An
asthma control is hard to manage and even harder to track in real time settings, but a
recently completed study shows that the so - called smart inhale rs may hold some
promise. What they found is pretty impressive. Overtime, the smart devices led to a
78% drop in rescue inhaler use and a 48% increase in symptom free days. In addition
to the improved health outcomes for individuals, the study led to a number of
recommendations for Louisville which had been named one of the 20 most challenging
cities for people with asthma. The study author suggests improve d tree canopy, zoning
regulations to create air pollution buffers and new truck routes and also su ggested a
creation of a community asthma notification system.

I am Marianne O'Hare with these healthcare headlines.

[Music]

Mark Masselli: We are speaking today with Karen Lynch, President of Aetna where she
overse e s more than 22,000 employees in Aetna ’s commercial government and
specialty business. Ms. Lynch joined the company in 2012 as Executive Vice President
of Local business. Prior to joining Aetna, she served as President of Magellan Health
Services , a manage d care company focused on behavioral health services. Before that
she served as President of Dental Services at CIGNA. She was named to Fortune

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

magazine ’s list of 50 most powerful women in business as well as Modern Healthcare ’s
top 25 women in healthcare. She earned her Bachelor’s Degree in accounting from
Boston College and her MBA from Boston University. Karen, welcome to
Conversations on Healthcare.

Karen Lynch: A lots of pleasure to join you both today.

Mark Masselli: Yeah , you know , you recently noted that if you wanted indicati on of
where healthcare is headed, you should look no further than your own company and
Aetna is one of the nation’s largest health insurers and has been engaged in a number
of high profile merger efforts. Recent merger with the drugstore giant CVS appears
poised to move forward and it is almost $ 70 billion deal that most analyst s agree signals
a significant shift within the industry and I am wondering what this merger will mean for
the healthcare industry as well as for America’s health consumer.

Karen Ly nch: Well clearly, this is a transformation on merger and it gives us the
opportunity to reshape the healthcare industry. You know, the way I think about it for
too long and far too often , we have been practicing sick care , not healthcare and the
potenti al of a CVS Aetna merger is really to organize around the consumer and around
the consumer experience. It will allow us to be in the local communit ies to create
another gateway to access healthcare and it also gives Americans a go to destination
for their healthcare services and their healthcare needs.

Margaret Flinter : Well Karen , you ’ve made the point clearly about the importance of
meeting these consumers , where they are in their neighborhood s and communities , you
have close to 50 million health insur ance customers. CVS 10,000 stores across the
country. I think most of us think every corner in America has a CVS and operates even
more of their walk - in clinic s , quick care clinic in other locations. So, how do you
envision this merger on the ground fac ilitating improved access to care.

Karen Lynch: Oh Margaret , you are absolute right. CVS has over 10,000 stores across
the United States which means that 70% of American s live within 5 miles of a CVS. I
think what is important to recognize, you know , h ow this will help facilitate improved
access is really to understand what we have been saying for a longtime now that your
ZIP code is more important than your genetic code and what that means is your
individual behaviors and your environment clearly have meaningful impact on
healthcare cost. So I want you to imaging a local CVS being an interactive hub where
individuals can come in and learn more about their healthcare where they can access
healthcare services and they can have further assistance in navig ating the overall
healthcare system s where we might point people to different provider s and more
importantly point them to social services in their communities to address the social
determinants of care and our overall goal is to achieve affordable high qu ality care for
the individuals that we serve.

Mark Masselli: You know , I think cost is actually manic with our healthcare system ,
18% of the nations GDP is spent in the healthcare area and your company is already

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

forging into this new territory , other en tities are on the horizon , Amazon Berkshire
Hathaway and JP Morgan Chase partnership was announced recently and wondering
how do we continue to support a robust healthcare industry that employees so many
Americans while getting our arms around healthcare c ost?

Karen Lynch: Oh , what’s interesting Mark is that we spent more on healthcare cost
than any other country in the world. In 2025 , healthcare cost will be at 25% of the GDP
and as you can see that is growing at an unsustainable rate and that ’s the pro blem
we ’re really trying to solve with this merger. You know, today 30% of Americans suffer
from diabetes. In the 1950s , it was less than 1%, 40% of adults today are considered
obese , 20% of children are considered obese today which you can imagine gener ates
strain on our overall healthcare system. I think the other thing that you have to
recognize with cost is over $ 900 b illion or one in three dollars is waste in our healthcare
system. We need to understand people’s health ambitions and we need to supp ort
them in their individual behavior s , we need to provide better access and we need to
give them more affordable and more transparent healthcare in America to really dry
down overall healthcare cost.

Margaret Flinter : Well you know , Karen we ’ve also kno wn the very good work of the
Aetna Foundations and in fact on the show not too long ago we had Dr. Garth Graham
and he was speaking about the partnership with US News & World Report to create a
ranking system to highlight the healthiest communities in the nation. How do you
envision this data being used to improve the outcomes around the country? How do
you anticipate that you might be able to us to address that basic fact that you said that
your ZIP code may matter as much as your genetic code?

Karen Ly nch: Well , we can be more excited about our partnership with US News & World
Report and as you mentioned our report ranks communities across 10 categories from
education and public and health to infrastructure and economy and it basically assesses
which c ommunities offer their citizens the greatest opportunity to lead a healthy lifestyle
and by forging this partnership what we are expecting to do is we are not just telling
communities how they rank, we are providing them with ways to improve and our hope
i s that we inspire every city and every country in America to have a healthy community
agenda and I think that ’s what will help, you know, support healthcare cost and , you
know, help improve overall individual behavior s as we try to reckon with this
unsusta inable cost of healthcare.

Mark Masselli: We ’re speaking today with Karen Lynch , President of Aetna. Karen , I
want to take a little deeper dive into that US News & World Report healthy communities
report in creating a cultural change across communities i s a heavy lift and especially in
areas that have a high level of poverty. We know for instance in Colorado which has a
very high ranking when it comes to health , w hat can some of the communities that are
struggling to help reduce these barriers do in the way of promoting better health?

Karen Lynch: So as you know , our goal is in creating the indexes, not just to recognize
communities that are already making significant progress, but it is also to inspire that

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

change to help communities think about and pu rsu e improvement s in overall public
health and I think all communities can learn about the best practices in their own
backyard and across the country and then apply those lessons. You know, we’ve seen
healthy gardens emerge in some under privileged commu nities. We ’ve seen increase d
bike pass, walkways, and I think that those are the important kinds of activities that
need to occur. Our foundation has helped improve community health for more than 40
years and our hope is that by using the data from the h ealthiest communities’ index, the
foundation will continue to make targeted investments in these programs and our hope
is that corporations will step up to the challenge in the local communit ies in which they
work and live and support the healthy agenda.

Margaret Flinter : Karen , I know that we ’ve talked about the need for corporations to
lead by example. We read about your social compact for the companies ’ employees
offering everything from a higher minimum wage to lower out of pocket healthcare cost
to providing tuition reimbursement to help people advance in their career goals and
you ’ve even got a chief mindfulness officer of the company. Now, that’s something we
have n’t thought about doing , but we might have to think about that. We’re really curious
to hear your thoughts about the impact of these programs on your workforce , are you
using any data to look at their effectiveness?

Karen Lynch: We have seen tremendous progress , and just a reminder in 2015, we
increased minimum wage that you noted to $ 1 6 an hour, we also enhanced our overall
medical benefits and in 2017 we began making match loan payment contribution s and
as you noted, we have mindfulness programs including paying our employees to sleep
more than seven hours.

Mark Masselli: Oh. That’s great.

Karen Lynch: And so there is… I know it is kind of fun. The result is that we have seen
increased employee engagement and we measure that on an annual basis. We ’ve
experienced overall increasing productivity across our employee population and
be cause our employees are what we consider happier and healthier and more
productive our customer satisfaction rates have also increased. So, we ’re quite proud
that we have been leading the way with our social compact and we are seeing
meaningful result s wi th our employee population.

Mark Masselli: Yeah Karen, let ’s take a look at the regulatory environment and certainly
the current administrations shifting away from many of the Obama reforms , insurance
regulators struggling with some degree of uncertainly . Wonder how do envision the
health insurance industry forging new ways of doing business as the health policy
landscape continues to shift and where do you see the seam of opportunity in this
shifting landscape?

Karen Lynch: I would point to three area s. The first area is provider engagement
driving to value - based care. Aetna and providers have one common purpose and that
is truly to improve the quality and affordability of healthcare and with value - based care

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

we can demonstrate that partnership to do just that. The second area I would point to is
consumer engagement and being in the local communities and really focusing on
individual behaviors and the social determinants of care and I believe that that can be a
very powerful step in reshaping how we think about healthcare and the third thing I
would mention is just focusing on holistic health, treating the whole person both
physical, emotional and behavior al aspects of one’s health and I think that can make a
meaningful difference on the impact of hea lthcare.

Margaret Flinter : I ’d like to envision this expansion of the Aetna CVS merger and
asking your thoughts about workforce, particularly healthcare workforce. We are very
engaged in postgraduate training of nurse practitioners, physicians, and psyc hologist s .
We have an institute to train medical assistan ts, so just about everybody, but when I
look at some of your thoughts around these neighborhood - based clinics, we’re also
talking about maybe having social workers out there or pharmacist s and I wou ld
imagine you ’ve been thinking about navigators or community health workers. So, what
keeps you and your colleagues up at night thinking about how you ’re going to develop
and retain the workforce for this expanded presence in the communities?

Karen Lync h: Oh , that ’s a really great question and I think that training our current
workforce with the changing demands of using technology will have a meaningful
impact , number 1. Number 2 is technology is really changing the way in which workers
work today and I think that we have to think beyond having people in the physical space
and leveraging tele health and tele medicine and having people have access in ways
that are unique and different and yes of course being in the neighborhood we expect to
have pharmac ist s operate at the top of their license. We do expect to transform what a
CVS store looks like and use nurse s and health navigators and at Aetna we have
thousands and thousands of nurses that are in the field and in the home and we
continue to recruit an d train and educate those nurses to fulfill or promise of meeting
people where they want to be met.

Mark Masselli: You know, I wanted to ask one final question about d ata as much as
your healthcare company , your data company , and we had Dr. Ashish Shah o n the
show from Harvard who was talking about really not having live time actionable data
and that we are often times grabbing Medicare data that ’s two years old. What are you
doing at Aetna around the issues of giving the folks who are providing care acc ess to
more actionable and timely information?

Karen Lynch: Couple things. One, we are using COG based technology so that we
have access to real time data. We have nurses in the home s with i Pads so that they
can connect back into our systems. You know , obviously you talk about Medicare two
years of data , you know we ’ve just built out a new app, Aetna health App that gives us
real time data and I think that is a crucial aspect of how healthcare will transform
because having data at our fingertip s will a llow us to remotely monitor and get
information about people where they are so that we can immediately get information
back out to them. So, for example , if you know, I am a runner, so if someone see s that I

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

have n’t been running in a few days , maybe I get an alert that says “Hey Karen, if
everything okay .”

Mark Masselli: Get going.

Karen Lynch: Or, you know, I envision a world where you might walk in to CVS and you
might be a diabetic and you know we know you are there because of our Geofencing
and you pick up a candy bar and it says “ Margaret that’s not your next step of action.”

Mark Masselli: That’s freaky.

Karen Lynch: And so I think that where healthcare will be headed and obviously , you
know, protecting information is critically important to t hat , but I do think that having real
time access can really change individual behaviors and how people think about their
health.

Margaret Flinter : We ’ve been speaking today with Karen Lynch, President of Aetna.
You can learn more about their work by goi ng to aetna.com or follow her on Twitter at
Karen Lynch Aetna as well as the company’s twitter handle at Aetna.

Karen , thank you so much for sharing your insights with us , for joining us on
Conversations on Healthcare today and we will look forward very m uch to following your
progress.

Karen Lynch: Thank you very much, my pleasure.

[Music]

Mark Masselli: At Conversations on Healthcare, we want our audience to be truly in the
know when it comes to the facts about healthcare reform and policy . Lori Rob ertson is
an award - winning journalist and managing editor of FactCheck.org , a nonpartisan,
nonprofit consumer advocate for voters that aim to reduce the level of deception in US
politics. Lori , what have you got for us this week?

Lori Robertson: As the W hitehouse has proposed rescind ing $ 7 billion in unspent funds
from a Children’s Health Program. Democratic senator , Chuck Schumer said it would
be “ taking money away from kids who need healthcare,” but congressional budget
expert s say the number of indivi duals covered would not be affected. The main point of
contention is the Trump administration ’s proposal to take $ 2 b illion from a contingency
fund , used if state s face both a shortfall and higher than expected enrolment in the
children’s health insurance program.

CHIP which is jointly funded by the Federal Government and the state is for the children
and pregnant woman and families with low income s , but not low enough to qualify for
Medicaid. Since fiscal 2009 when this contingency fund was established, three states
Iowa, Michigan, and Tennessee have received payments from it according to a 2018

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health

report from the Congressional Research Service. The three states spen t a total of
108.6 million in contingency funding. So the states have n’t needed these fund s much.
Schumer’s office argues that the funds could be needed in the future and they are there
in case of an emergency. Congress has rescinded unspent CHIP funds before, a total
of $ 42.8 billion from fiscal year 2011 to fiscal 2017. In fiscal 2016, 1.7 billion was
rescinded from the contingency fund for the first time and earlier this year a Bipartisan
Omnibus Spending Bill rescinded nearly 2 billion from the fund. Schumer said at a
press conference that he supported the Omnibus ’s decision because the money was
used to fund “good things,” but in this case the Trump administration does n’t want to
use the money for other things and the Budget Watchdog group , the committee for
responsible Federal budget says the money “likely will not be used.” The contin gency
fund should get a fresh influx of money up to $ 4.5 billion in fiscal 2019 which starts
st
October 1 . Federal funding for CHIP will total $ 2 2 .6 billion for 2019 and that ’s my
FactCheck for this week. I am Lori Robertson, Managing Editor of FactCheck .org.

Margaret Flinter : FactCheck.org is committed to f actual accuracy from the co untry’s
major political players and is a project of the Annenberg Public Policy Center at the
University of Pennsylvania. If you have a fact that you’d like checked, e - mai l us at
www.chcradio.com , we’ll have FactCheck.org’s, Lori Robertson, check it out for you, here on
Conversations on Healthcare.

[Music]

Margaret Flinter : Each week , Conversations highlight s the bright id eas abou t how to
make wellness a part of our communities and everyday lives. When Wichita Kansas
nurse practitioner, Michael Wawrzewski learned of the harsh and often fatal conditions
that expectant mothers endure in Sub - Saharan Africa, he thought there had to be a way
to fill that need. He came up with a solution Clinic in A Can , transforming shipping
containers into fully equipped mobile clinics and operating rooms that can be shipped
anywhere in the world where there is a need.

Michael Wawrzewski : When you w alk in the inside , you ’ll think that you ’re inside your
doctor’s office for which maybe you ’re in an emergency room or an ICU unit, they look
exactly the same.

Margaret Flinter : Wawrzewski learned from his early iterations that gas power
generators could be problematic in low resource areas and switch ed all of his portable
clinics to solar power which he says was a game changer.

Michael Wawrzewski : There is no part of the world that does not have sunlight and so
solar power has become the cornerstone , so that now every piece of equipment we can
run it off a 500 watts of electricity which means six solar panel s on the top and eight
batteries is enough to run a clinic for 18 hours.

Margaret Flinter : Since its founding a decade ago, Clinics in A Can had be en delivered
to war torn Sudan, to earthquake ravaged Haiti and more recently to Santa Rosa,
California , an area decimated by the wild fires that also destroyed the main community

Aetna President Karen Lynch on CVS Merger and Goals to Improve Population Health
health center there. Santa Rosa Community Health Center CEO Naomi Fuchs say s
that the portable clinic provided a lifeline for her patients and was a godsend for her
providers.
Naomi Fuchs: These are converted shipping containers that are large fully equipped as
a medical exam room. These have been an outstanding way to respond to
emergenc ies to set something up very quickly.
Margaret Flinter : The roughly 120 square feet shipping container clinics are designed to
support workflow and to become a permanent fixture in low resource areas.
Michael Wawrzewski : A containerized cli nic is something that’s a turnkey. We are
equipped with the best equipment and we ship it as a completed project that once on
the ground within 20 to 30 minutes it’s ready to be used.
Margaret Flinter : Clinic in A Can , a professionally outfitted shipping container fully
equipped with medical and surgical equipment , solar powered , providing qualit y state -
of - the art medical facilities in a low resource area , now that’s a bright idea.
[Music]
Margaret Flinter : This is Conversations on Healthcare, I am Mar garet Flinter.
Mark Masselli: And I am Mark Masselli, peace and health .
[Music]
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