Aetna Inc. SWOT & PESTLE Analysis

Strength

1. Strong market positioning: One of the most recognizable names in the industry, Aetna Inc. is the third largest insurer in the U.S.A. offering dental, disability and prescription coverage along with general health insurance. It is the leading health financing platform with targeted tailored solutions to improve people's health and wellness. The Company has a 9.9% market share and medical membership totaling 22.2 million as of Dec, 2017. Over 70% of the Fortune 100 employ Aetna for their health insurance services. It is currently the 3rd largest publicly traded managed care organization. Aetna members are projected to use approximately 225m Adjusted Rx in 2017 and serves a record 44.6M (Unique members include Group Insurance) Unique Members. It has a world class consumer health and engagement model with innovation plan offerings. Aetna is the 2nd largest group Medicare Company and one of the fastest growing Medicare franchises. It has enrolled the biggest percentage of Medicare Advantage customers in 4+ star plans amongst publicly-traded competitors. This healthcare behemoth houses best-in-class next generation capabilities which include top notch digital and analytics capabilities, suite of clinical decision support assets and ramified across-the-board provider network.

2. Cost advantages due to size: Aetna Inc. believes in providing quality care at a low cost. Their health system is about saving money and keeping people healthy. They work with doctors and hospitals to align the economic incentives for everyone to stay healthy.CMS (Centers for Medicare & Medicaid Services)awarded4 (out of 5) Star Rating in 2017, for Aetna's Medicare Advantage PPOplans for helping members stay satisfied with their plans (97% of survey respondents said they were very satisfied with their plan), stay healthy and manage their long term health issues. 17.3 million retirees have chosen to stay with this plan since its launch in 1997 as it provides great cost savings to them. Aetna's Medicare Advantage plans provide a lot of added benefits not provided by Original Medicare.

3. Strong all pervasive next generation provider network: In the domestic markets, Aetna has very strong networking base. As per factsheet of Aetna Inc. it has alliance with over one million professionals in the industry. Its strong clinical assets include over 5200 nurses, over 300 doctors on staff, with a reach to over five million doctors, and specialists and covers more than 5700 hospitals nationwide.Aetna's vast provider network include 1.3 million participating health care providers, 7 lacs primary care specialist physicians. The healthcare giant operates on a high touch, high tech member service model with a huge global network of providers with a strong focus on improving consumer health and engagement. Its holistic consumer focus is a well-knit fabric of managing risk, servicing members and unwavering clinical focus.

Weakness

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Opportunity

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Threat

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Political

1. Growing public policy influence in health care insurance: Increasing federal and state policy proposals and changes are increasingly influencing the business performance and operations of health care insurers. The policy influence is seen in areas beyond the Affordable Care Act (ACA). Medicare and Medicaid Services’ (CMS) MA payment-rate updates, risk-adjustment changes, and health plan ratings are some other business critical areas which is having consequences on the sector. Further, the federal mid-terms to be held in November 2018 will also impact political consensus on the ACA.

Economic

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Social

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Technological

1. Blockchain having a strong potential in health insurance industry: Blockchain is basically a distributed ledger which allows data to be collected and stored in decentralized manner securely. Health insurers deal with patient data which is highly confidential and needs to be transferred between providers and payers and there have been many instances of breaches in the past. Aetna was involved in a data breach in which information of 12,000 individuals who had ordered prescription HIV drugs was visible in letters sent to them. This has led to a class-action lawsuit against the company. Blockchain platforms can prevent such incidents and also possess high degree of fraud prevention capabilities. Blockchain based smart-contracts can be used by insurers such as Aetna to eliminate third-party dependency, reduce costs and transaction time and ultimately make the process customer friendly.

2. Regulations such as Affordable Care Act (ACA) or Obamacare changing market dynamics: The Affordable Care Act (ACA) or Obamacare which was signed into law in 2010 has been one of the most significant regulatory overhaul and expansion of coverage since 1965. This law basically resulted in the reduction of the amount of uncompensated care the average U.S. family paid for health insurance by mandating everyone to have health insurance else pay a tax penalty. The people in the lower income bracket were entitled to ACA subsidies to make insurance affordable. However, for insurers such as Aetna who had 255,000 Obamacare policyholders in 2017, the Obamacare customers were proving to be costlier as the premiums including the government subsidies received from them were less than the payouts. Thus Aetna withdrew its Obamacare offerings from many states in the US in the public exchange marketthough it resulted in reduced business.

Legal

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Environmental

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