Former Aetna CEO Mark Bertolini On The CVS Deal, Yoga and Employee Wellness

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We got a chance to sit down and talk with former Aetna CEO Mark Bertolini on how CEOs can improve the cost of care and employee wellness at their own companies, how he got into yoga, why the CVS deal was the right move for Aetna and more.

I said, well, what more can we learn from these journals? We synthesized that information and found out the reason people were so stressed is that we’re underpaying them. I gave everybody a copy of Thomas Piketty’s book on capitalism in the 21st century and said, “Here’s a way that people think about dealing with capitalism that’s not working. And it isn’t. What do we need to do for our employees to fix this problem?”

We ultimately, through a lot of work and pain, came up with raising the minimum wage for our employees from $12 to $16. We went $12 to $16 an hour minimum wage and eliminating out of pocket costs for our employees. And when we did that, all of a sudden an ethos inside the organization developed that said, “You mean we can take care of each other?”

So we raised tuition reimbursement. We now pay back $10,000 of student loans. We have pet therapy in our buildings where pets come in. We paid people to sleep, seven and a half hours for 15 days in a row. And we’d do all these sorts of things. And none of those were my idea. They were ideas by the employees. We share PTO with employees who need it because their families are under stress. We have a way to donate to employees who have a problem. We move our employees out of harm’s way of every natural disaster and we put them up, including their pets, at hotels. And we do all those things and it probably costs us $60 to $70 million a year. What it did is it created a whole culture inside the organization where the company was taking care of everybody and we were taking care of the company. And more importantly its customers.

You have a new book coming out, Mission-Driven Leadership: My Journey As A Radical Capitalist. What makes you a radical capitalist?

I did [ESG and the basis of the conference] when it was unpopular. Everybody looked at me like I was crazy and I actually went to Adam Posen, I’m on the board of the Peterson Institute for International Economics and said, “Can you help me with some whitepapers Adam?” Because I’m going to get attacked by other CEOs. And I did. “This is crazy. You’re going to raise wages, it’s going drive inflation, etc.”

After we started showing our results and particularly given that over that same time period, our stock went from $29.85 to $208 a share, it’s hard to argue that it hurt us. I did it in unconventional ways. I didn’t use a spreadsheet cause a spreadsheet wasn’t going to work on a lot of these things. So what we did is we used the assumptions you put into your spreadsheet, created a ladder of risks based on the most likely to the least likely and said as a team, “What do we need to believe as a team that will allow us to take this set of risks and succeed? And it was in that conversation, we came to the conclusion that we can make a difference. And so that’s what’s radical about it. We shooed away that spreadsheet and all this other stuff that traditional business people would use. We use the logic of scarce resources are our human capital and plentiful resources are our financial capital and all of that at the time was crazy talk. I’m talking to my CFO and I’m talking about stewardship and he goes, “We are a commercial enterprise. We need to make money.” And my view was if we created a strong economic flywheel of investment in employees taking care of customers, customers staying better, bottom line results will come out of the machine. It wouldn’t be something we had to manage either.

What was the mentality in taking CVS and Aetna—two established, iconic companies in different areas of healthcare—and creating a whole new enterprise?

My belief, and we’re seeing it happen today, was that the next political agenda will be “Medicare For All” or something like that. And I would argue that if we tested Medicare eligibility down to 55 and did the increase we did on Medicaid eligibility in every state, we would have never needed the ACA. We could have covered many, if not more people, cheaper. Because those systems are in place, they work and they’re economically viable.

So we’re going to go through that [debate] again. [In this environment] being a freestanding insurance company in and of itself is like standing in the middle of the road waiting to get hit. I said if that’s going to be the case, what would we need to do? Well, my belief is our social and economic ecosystems have gotten so large that the government can’t manage them. And our attempt to make the federal government or state governments larger won’t work. The notion of a new world order won’t work because we’re so diverse.

We need to get back to community and the only way to get into the community is to create place making, where people in the community can gather together like we used to in an agrarian society so nobody falls through the cracks. You had to be in the local community in a meaningful way.

So we asked, “Should we build Aetna stores?” I said [sarcastically], “Yeah I can see what people lined up to get into and out of an Aetna store.” So what could we do to build a local presence at the community level that will matter? That was the CVS deal. And what can we do to solve this notion of conflated financing and investment, move the financing to the back of the dealership instead of upfront. Build the journey and talk about the investment. Find the cheapest way to finance it. And it’s my plan. It’s not the plan the doctor devises.

Read more: Susan Salka: Boardroom Diversity Is More Than Just Filling Quotas

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