Aetna 2004 Annual Report Download

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The Challenge
of Leadership
AETNA ANNUAL REPORT 2004

Table of contents

  • Page 1
    The Challenge of Leadership AETNA ANNUAL REPORT 2004

  • Page 2
    ...Inc.'s 2004 Annual Report, Financial Report to Shareholders. Balance Sheets 39 Consolidated Statements of Cash Flows 40 Board of Directors 41 Management 42 Shareholder Information 44 Information About the Effectiveness of Health Care 21 THOUGHTFUL CHANGE: LEADERSHIP AT WORK 23 New Financing Tools...

  • Page 3
    ... Aetna's balance sheet, Rebuilt our management strength, Developed a superior capacity to control medical costs through an intense clinical and quality focus, Upgraded the quality of service we deliver to our members and participating physicians, Regained the confidence of customers through product...

  • Page 4
    ...make betterinformed decisions about their benefits and their health care. We've also pioneered the new AexcelSM network, which reflects growing national interest in "pay for performance." Aexcel uses information about medical specialists' cost-effectiveness in the delivery of care and their clinical...

  • Page 5
    ... provider of national specialty pharmacy services, will expand our pharmacy benefit management capacity. We'll work to improve the quality of care and service our members receive, and better manage the fastest-growing facet of pharmacy costs. Our recent acquisition of Strategic Resource Company...

  • Page 6
    ... health care. Two important trends have emerged: Employers want to improve the effectiveness of their health benefits spending in the face of rising costs, and consumers want more involvement in influencing their own health and financial security. The consumerism trend involves more than a new plan...

  • Page 7
    .... In 2004, Aetna introduced portable Health Savings Account (HSA) plans, giving members the option of saving health care dollars for future use. We also introduced the Aetna HealthFund Retiree Reimbursement Account, helping to fund post-retirement health care expenses. For individuals and families...

  • Page 8
    ...'s small group portfolio of products for employers of 50 or fewer employees includes a wide range of plan choices to meet different employees' needs. By combining choice with simple administration and information tools to help employees make sound health care decisions, Aetna's plans offer access to...

  • Page 9
    ... registered Aetna Navigator users Our Simple Steps to a Healthier Life program uses the power of information to help members make healthful changes in their lifestyles. Our educational resources and telephonic outreach touched 36,660 registered users in 2004, and we doubled the number of customers...

  • Page 10
    ... their families - understand how to better choose and use their health benefits. The planforyourhealth.com Web site features: â- The health care system often falls short when it is time to face the toughest of issues - appropriate end-of-life care. The new Aetna Compassionate CareSM program takes...

  • Page 11
    ... Clinical programs that integrate traditional medical with other health care services create significant opportunities to improve care. We are able to make connections that result in more targeted, effective outreach to our members and more meaningful information for their physicians. â- Our new...

  • Page 12
    ... and Houston. More than 95 percent of Aetna's clinical professionals have completed a cultural competency training program to increase awareness of cultural disparities. â- Thoughtful Change: Leadership at Work In addressing the most pressing issues confronting our health care system, Aetna once...

  • Page 13
    ... engaged in managing costs and care. Employers and health plans are smoothing the way by providing access to existing networks and online information tools. They also are instituting new programs to provide better coordinated care for those with chronic conditions such as diabetes, heart disease and...

  • Page 14
    .... Similar programs emerged in Boston around the same time. In 2003, Aetna and five other insurers began paying an estimated $50 million per year in bonuses to California physicians for improving quality. In general, these pay-for-performance contracts target three key areas. Clinical quality goals...

  • Page 15
    ... M.Sc. Chief Medical Officer Centers for Medicare and Medicaid Services As Americans take increasing personal responsibility for health care decision making, it becomes essential for patients and their physicians to have reliable information about the risks, benefits and costs of their clinical...

  • Page 16
    ... affects over 6 percent of Americans at any one time, and at least 16.6 percent of the population experiences depression in their lifetime. Depression costs the nation over $43 billion annually through absenteeism, reduced job productivity, related health care costs, premature death and suicide...

  • Page 17
    ... have seen what happens when government takes over health care. All we need to do is look at Medicare and Medicaid. These deteriorating programs are structured in a way that alienates physicians; rewards participants who game the system; sets irrational reimbursement rates that generate low-quality...

  • Page 18
    ... own health care needs because it makes clear the deficits in the system. Similarly, we found that persons with new diagnoses of high blood pressure were usually not counseled to exercise or modify their diets; these actions can help patients with mild problems avoid taking medications. Medications...

  • Page 19
    ... making better choices among treatment options. It is the way people connect together across a fragmented health care delivery system - from physicians' offices to hospitals to nursing homes and even to the consumer's home. It is putting consumers in control of their health status and customizing...

  • Page 20
    ... per common share data) Revenue: Health care premiums Other premiums Administrative services contract fees Net investment income Other income Net realized capital gains Total revenue Benefits and expenses: Health care costs Current and future benefits Operating expenses: Selling expenses General and...

  • Page 21
    ...provided by (used for) investing activities Cash flows from financing activities: Deposits and interest credited for investment contracts Withdrawals of investment contracts Repayment of short-term debt Common shares issued under benefit plans Common shares repurchased Dividends paid to shareholders...

  • Page 22
    ... Chief Compliance Officer Robyn S. Walsh Vice President Aetna Workers' Compensation Access John J. Webb Vice President Select Accounts Elease E. Wright Senior Vice President Human Resources *Retiring effective March 31, 2005 BOARD OF DIRECTORS Michael H. Jordan Chairman and Chief Executive Officer...

  • Page 23
    ... Investment Program: Click "buy stock direct" and search by ticker symbol "AET" to view or print the plan materials and/or to open a new shareholder account completely online. Other Shareholder Inquiries Office of the Corporate Secretary Aetna Inc. 151 Farmington Avenue, RE4K Hartford, CT...

  • Page 24
    ...for Medicare and Medicaid Services, visit its Web site at www.cms.hhs.gov. Grace-Marie Turner, contributor of the essay New Financing Tools Give Consumers More Power and Control over Health Care Decisions, is Founder, President and Trustee of the Galen Institute, Inc., Alexandria, Virginia. For more...

  • Page 25
    31.05.900.1-04