Aetna 2015 Annual Report Download - page 80

Annual Report- Page 74
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 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 regulations 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 rapidly 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 and consumer
preferences, anticipate and effectively compete with the products and solutions of new and existing competitors 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. Differentiating our Insurance Exchange products is
particularly challenging due to the standardization (for example, network adequacy and standardization of benefits
requirements) of these products. Any failure to do so may adversely affect our ability to retain or grow profitable
membership, which can adversely affect our operating results.
If we or our vendors fail to provide our customers with quality service that meets their expectations, our ability to
retain and grow our membership will be adversely affected.
Our ability to attract and retain membership is dependent upon providing cost effective, quality customer service
operations (such as call center operations, claim processing, outsourced PBM functions, mail order pharmacy
prescription delivery, specialty pharmacy prescription delivery, customer case installation and on-line access and
tools) that meet or exceed our customers’ and members’ expectations. As we seek to reduce general and
administrative expenses, we must balance the potential impact of cost-saving measures on our customer and other
service and performance. If we misjudge the effects of such measures, customer and other service may be adversely
affected. We depend on third parties for certain of our customer service, PBM and prescription delivery operations.
For example, Caremark PCS Health L.L.C. (and its predecessors, collectively, “CVS”) and Express Scripts provide
us with certain PBM services. If we or our vendors fail to provide service that meets our customers’ and members’
expectations, we may have difficulty retaining or growing profitable membership, which can adversely affect our
operating results. For example, noncompliance with any privacy or security laws or regulations or any security
breach involving one of our third party vendors could have a material adverse effect on our businesses, operating
results and/or reputation.
Our competitive position and ability to differentiate our products will be adversely affected if we cannot
demonstrate that our products and processes result in our members receiving quality affordable care.
One of the key factors on which we compete for customers is the degree to which our products and processes
(including our disease management and patient safety programs and our provider credentialing and other quality of
care and information management initiatives) result in our members receiving quality affordable care from
providers, our vendors (including our PBM services suppliers) and us. If our products and process do not result in
our members receiving quality affordable care, or if we are unable to demonstrate that our members receive quality
affordable care, then our competitive position and ability to differentiate our product and/or solution offerings from
those of our competitors would be adversely affected, which in turn could adversely affect our operating results.