Aetna 2013 Annual Report Download - page 75

Annual Report- Page 69
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 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 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 care, or if we are unable to demonstrate that our members receive quality 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.
Risks Related to Our Relationships with Providers, Suppliers and Vendors
If we are unable to enter into collaborative risk-sharing agreements with health care providers on satisfactory
terms, it may have an adverse effect on our ability to enhance our provider networks, contain our medical costs,
grow our business or develop alternative sources of revenue and earnings.
We are seeking to enhance our health care provider networks by entering into collaborative risk-sharing
arrangements, including ACOs, with health care providers. These arrangements may allow us to expand into new
geographies, target new customer groups, increase membership, reduce medical costs and, if we provide technology
or other services to the relevant health system or provider organization, may contribute to our revenue and earnings
from alternative sources. If we fail to attract health care providers to such arrangements, or are less successful at
implementing such arrangements than our competitors, our medical costs may not be competitive and may be
higher than we project, our attractiveness to customers may be reduced, we may lose or be unable to grow
membership and our ability to profitably grow our business and/or our operating results may be adversely affected.
While we believe ACOs and other new organizational structures present opportunities for us, the implementation of
our ACS and ACO strategies may not achieve the intended results, which could adversely affect our operating
results and cash flows.
Continuing consolidation and integration among providers and other suppliers may increase our medical and
other covered benefits costs, make it difficult for us to compete in certain geographies and create new
competitors.
Hospitals and other provider and health systems continue to consolidate across the industry. While this
consolidation is expected to increase efficiency and has the potential to improve the delivery of health care services,
it may also reduce competition and the number of potential contracting parties in certain locations. These health
systems are also increasingly considering forming health plans to directly offer health insurance in competition with
us, a process that has been accelerated by Health Care Reform, including Insurance Exchanges. ACOs,
consolidation among and by integrated health systems and other changes in the structures that physicians, hospitals
and other health care providers adopt may change the way these providers interact with us and may change the
competitive landscape in which we operate. These changes may increase our medical and other covered benefits
costs, may affect the way we price our products and services and estimate our medical and other covered benefits
costs and may require us to change our operations, including by withdrawing from certain geographies where we do
not have a significant presence or are unable to contract with providers on acceptable terms. Each of these changes
may adversely affect our business and operating results.
Our operating results may be adversely affected if we are unable to contract with providers on competitive terms
and develop and maintain attractive networks with high quality providers.
Our operating results are dependent in part upon our ability to contract competitively while developing and
maintaining favorable relationships with hospitals, physicians, pharmaceutical benefit management service
providers, pharmaceutical manufacturers and other health care benefits providers. Our relationships with providers
are affected by the rates we pay them for services rendered to our members (including financial incentives to deliver