Looking out at the transition to retail insurance and inward to its own efforts to develop consumer-focused services and technology, Aetna is investing in its own private benefits exchange.
Aetna has agreed to purchase bswift, a Chicago-based developer of insurance exchange and employee benefits administration technology, for approximately $400 million.
The company's benefits shopping and administration technology "is an excellent fit," said Mark Bertolini, Aetna chairman and CEO. "With more employers giving employees their choice of benefits via private exchanges, bswift's technology platform will provide Aetna with the capability to deliver a new private-exchange offering for employers of all sizes."
bswift was founded by the current CEO, Rich Gallun, in 2000, evolving out of an earlier company created in 1996 that set out to create the first web-based consumer-driven health plan and discovered a demand for online, automated benefits administration.
Now, the company has approximately 380 employees on staff, working on both private and public exchanges, including Connecticut's marketplace, and serving both large and small employers. It's owned by a number of employees and investors, one of the larger ones being private equity firm Great Hill Partners.
"Aetna will help expand the reach of our technology and benefits services with a goal of creating a true consumer marketplace for healthcare," said Gallun, a former VP at a physicians practice management firm.
Once the transaction is complete, following regulatory approval, bswift will operate as a separate business within Aetna and under its existing leadership structure, the companies said.
For Aetna, the addition of bswift offers a new way to keep or garner new employer clients looking to provide health benefits on a defined-contribution model, rather than the traditional group plan. It also offers a way to operate a single-insurer private exchange option, as Cigna and numerous Blue Cross insurers are doing.
"Selecting a health plan is an important decision and bswift's consumer shopping, buying, enrolling and decision-support features will help simplify what can be a confusing experience," said Dijuana Lewis, Aetna's executive vice president for consumer products and enterprise marketing and a former Walmart executive.
The deal suggests that insurers are preparing for changing health financing models among employers and expectations among consumers -- with the end result potentially being many state and regional individual markets, in effect, if more large groups adopt private exchanges.
In tandem with that, Aetna is trying to develop new insurance plan benefits, services and technologies for members.
"We're launching a new consumer business in 16 or 18 months that's going to be very focused on consumerism in all things for the health plan," Michael Palmer, Aetna's chief innovation and digital officer, recently told consultant David Williams, in the Health Business Blog podcast.
Employer adoption of private exchanges is well underway -- one reason why Aetna is buying bswift, no doubt. But other approaches to health insurance are kind of experimental and moreso on the minds of companies "who have workforces that are younger or more digitally savvy," Palmer said.
In various wellness and lifestyle intervention pilots, Aetna is working with employers open to such experimentation and who can offer a group of at least 500, as a sort of study population.
Aetna's own workforce turned out to be just that kind of group for one of its more ambitious pilots targeting metabolic syndrome, the precursor condition to diabetes and cardiovascular disease, marked by high blood pressure, blood sugar, cholesterol and waist circumference.
With about 500 of its own most at-risk employees, Aetna is testing a personalized, online weight loss program in a partnership with a Toronto-based startup called Newtopia, which uses information from tests measuring genes linked with obesity, appetite and behavior to support coaching on healthy eating and activity.
So far, Palmer said, that pilot is showing some promise, both in terms of engagement -- getting employees to consider the future risks of their present conditions -- and results. More than half of the employees who signed up and continued participation, and the 280 who finished the program have on average lost about seven percent of their bodyweight.