Aetna at Morgan Stanley Healthcare Conference Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“When you look at our first half 2013 performance, on the positive side the story really was the commercial business and that was really a function of the medical cost trend environment being fairly stable and benign during the first half of the year, so commercial was the real story.”

“I’m under no illusion that it’s going to be a high margin business, but I think we will be able to earn a fair margin. Really there’s a lot of different forces whether it’s consumerism or the cost of healthcare that I think are going to make [exchanges] a place that more and more people will go to get their healthcare. My only concern all along is getting from A to B, right? There inevitably will be operational bumps in the road as these things get off the ground but they will be worked through and I think that’s really – the only question is, is when do we get there.”

“Well, I think Medicare Advantage is going to be a fine business long term. I’ve always thought that…We’ve been preparing for a long time that we were going to get to revenue that was at a 100% of fee-for-service. Some of these announcements just accelerated that process a bit for us.”

“the buying decision used to sort of be do you have every hospital and every doc in the network and if you did not, then that was a problem. Clearly now it’s not only a cost issue but I think the ability to managed care in a more effective way can happen in a smaller system.”

“If you think about it in a very simplistic sense in an exchange sort of consumer-oriented world, the consumer does not care as long as they’re doc and hospital is in the network, right? So they don’t necessarily even may not put a lot of value on a broad network. ”

“So both of those things I think are things that are narrowing sort of the network footprint size. I think we’ve said in the past our exchange networks are pretty meaningfully smaller than our standard commercial networks I think is good evidence of that.”

“So I view it sort of in the DNA of the company almost how we think about the business is all about care management and care management models and always making those better year-after-year.”

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