Aetna 2013 Annual Report Download - page 71

Annual Report- Page 65
Coventry acquisition, including the cost of integrating our and Coventry’s information and other technology
systems, will increase our general and administrative expenses over the next several years. Given the foregoing, we
can provide no assurance that we will be able to manage our general and administrative expenses to competitive
levels, which may reduce our membership, profitability and operating results and adversely affect our business and
future growth potential.
We are dependent on our ability to recruit, retain and develop a very large and diverse workforce. We must
transform our culture in order to successfully grow our business.
Our products and services and our operations require a large number of employees, and a significant number of
employees joined us during 2013 upon the closing of the Coventry acquisition. Our success is dependent on our
ability to transform our culture, engage our employees and inspire our employees to be open to change, to innovate
and to maintain consumer-focus when delivering services to our customers. Our business would be adversely
affected if we fail to adequately plan for succession of our executives and senior management, effectively recruit,
integrate, retain and develop key talent and/or align our talent with our business needs, particularly given the
current environment, which is rapidly changing. While we have succession plans in place and we have employment
arrangements with a limited number of key executives, these do not guarantee that the services of these or suitable
successor executives will continue to be available to us. In addition, as we expand internationally, we face the
challenge of recruiting, integrating, educating, managing, retaining and developing a more culturally diverse
workforce.
Our business success and operating results depend in part on effective information technology systems and on
continuing to develop and implement improvements in technology.
We have many different information and other technology systems supporting our businesses, and we have more
systems supporting our businesses as a result of the Coventry acquisition. Our businesses depend in large part on
these systems to adequately price our products and services; accurately establish reserves, process claims and report
financial results; and interact with providers, employer plan sponsors, members and vendors, including our PBM
services suppliers, in an efficient and uninterrupted fashion. Certain of our technology systems (including software)
are older, legacy systems that are less flexible, less efficient and require a significant ongoing commitment of
capital and human resources to maintain, protect and enhance them and to integrate them with our other systems.
We must re-engineer and reduce the number of these systems to meet changing consumer and vendor needs and
improve our productivity. We also need to modify certain of our technology systems or develop new systems to
meet current and developing industry and regulatory standards, including with regard to minimum MLR rebates,
Public Exchanges, administrative simplification and other aspects of Health Care Reform, and Private Exchanges,
and to keep pace with continuing changes in information processing technology and emerging cybersecurity risks
and threats. If we fail to achieve these objectives, our ability to profitably grow our business and/or our operating
results may be adversely affected.
Our business strategy involves providing customers with differentiated, easy to use, secure products and solutions
that leverage information to meet customer needs. The types of technology and levels of service that are acceptable
to customers and members today will not necessarily be acceptable in the future, requiring us to anticipate and meet
marketplace demands for technology. Our success therefore is dependent in large part on our ability, within the
context of a limited budget of human resources and capital and our existing business relationships, to timely protect,
integrate, develop, redesign and enhance our technology systems that support our business strategy initiatives and
processes in a compliant, secure, and cost and resource efficient manner. Integration of our recent acquisitions,
including Coventry, increases these challenges, and we may not be successful in integrating various systems in a
timely or cost-effective manner.
Information technology projects are long-term in nature and may take longer to complete and cost more than we
expect and may not deliver the benefits we project once they are complete. If we do not effectively and efficiently
secure, manage, integrate and upgrade our technology portfolio, we could, among other things, have problems
determining health care cost and other benefit cost estimates and/or establishing appropriate pricing, meeting the