Aetna 2014 Annual Report Download - page 72

Annual Report- Page 66
We may not be able to compete effectively in the HIT business and earn a profit. Our HIT business increases our
risk of patent infringement and other intellectual property litigation and may become subject to significant
regulation in the future.
With our 2014 acquisition of bSwift, our 2011 acquisition of Medicity and our current focus on consumer
engagement, ACOs, collaborative provider networks and optimizing our business platforms, we have increased our
commitment to HIT products and solutions, a business that is rapidly changing and highly competitive. There is no
assurance that we will be able to successfully adapt to changes to the HIT marketplace, or compete effectively and
earn a profit in our HIT business. Our technology products and solutions may not operate as intended. Moreover,
we may not have identified and mitigated, or be able to identify and mitigate, the significant risks of pursuing the
HIT business, including the risk that we will be unable to protect our proprietary rights and the risks of patent
infringement and other intellectual property litigation against us. Certain of our HIT products and/or solutions are
subject to the patent litigation, which is often associated with significant litigations costs, damages and/or
injunctions.
In addition, although the HIT industry is not currently subject to significant regulation, we face an uncertain and
rapidly evolving federal, state and international legislative and regulatory framework and certain of our HIT
products and/or solutions could be subject to FDA regulation. New legislation and/or regulation may make it
difficult to achieve and maintain compliance and could adversely affect both our ability to compete in the HIT
business and the operating results of our HIT business.
If we fail to develop new products, differentiate our products from those of our competitors or demonstrate the
value of our products to our customers, our ability to retain or grow profitable membership may be adversely
affected.
We operate in a quickly evolving industry. Our customers generally, and our larger customers in particular, are well-
informed and organized and, along with our individual customers, can easily move between us and our competitors.
This requires us to differentiate our products and solutions, anticipate changes in customer preferences and innovate
and deliver new and existing products and solutions that demonstrate value to our customers, particularly in
response to marketplace changes from public policy. Any failure to do so may adversely affect our ability to retain
or grow profitable membership, which can adversely affect our operating results.
Our reputation is one of our most important assets; negative public perception of the health and related benefits
industry, or of the industry’s or our practices, can adversely affect our operating results.
The health and related benefits industry regularly is subject to negative publicity, including as a result of the
ongoing public debate over Health Care Reform, actual or perceived shortfalls regarding the industry’s or our own
products and/or business practices (including social media activities). This risk will increase further as we continue
to implement significant increases in premium rates to price for the expanded benefits required by, and the fees,
assessments and taxes imposed by, Health Care Reform and any acceleration in medical cost inflation. This risk
may be increased as states and the federal government implement and continue to debate Health Care Reform, as
we continue to offer products (including products for people who are eligible for Medicaid or dually eligible for
Medicare and Medicaid) beyond those in our core Commercial business and as our business model becomes more
focused on consumers and direct-to-consumer sales, including as a result of us creating a consumer business and
competing for sales on Insurance Exchanges. Negative publicity of the health and related benefits industry in
general, or Aetna or its key vendors in particular, can further increase our costs of doing business and adversely
affect our operating results and our stock price by:
• Adversely affecting the Aetna brand;
• Adversely affecting our ability to market and sell our products and/or services and/or retain our existing
customers and members;
• Requiring us to change our products and/or services; and/or
• Increasing the regulatory and legislative requirements with which we must comply.