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Dissecting Aetna’s surprising single-payer stance

Aetna chairman and CEO Mark Bertolini speaks during the Fortune Global Forum on November 3, 2015 in San Francisco, California.
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Aetna chairman and CEO Mark Bertolini speaks during the Fortune Global Forum on November 3, 2015 in San Francisco, California.

Aetna chief executive Mark Bertolini told employees in a private meeting Thursday that he thinks the United States "should have" a debate about single-payer.

"Single-payer, I think we should have that debate as a nation," Bertolini said in a video tape of his remarks provided to Vox by an attendee at the meeting.

You can read his whole answer in my story — but here in VoxCare, I want to catch you up on what has happened since the video leaked this morning.

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Bertolini had a previously scheduled earnings call with health care analysts on Friday, where he gave more detail about the type of single-payer system he thinks is worth debating. He gave the example of Germany, where the government contracts with private companies to provide a standardized set of benefits to all residents.

"If you look at Germany, they have four big funds that start with the base benefit from the German government and sell base buy-ups beyond that as a public private partnership," Bertolini said.

Here is the rest of Bertolini's answer to investors:

The discussion, which actually in an employee meeting got leaked to Vox and Sarah Kliff, which was on my Twitter feed — that's why I read my Twitter feed before I go for Q&A — was a comment by an employee that said people keep calling for single-payer.

Right now, the debate is a group on the left saying, "We must have single-payer and a group"; on the right saying, "The government should get the heck out of health care; there is nowhere in the Constitution that says we need to supply people health care."

I think instead of shouting back and forth across the stage, let's discuss what single-payer means. Is it a single source of financing, which does not yet get at the cost structure? Is it a health care system where the government owns the doctors and hospitals and operates them as well, like the NHS in the UK? What is that? So that when we start yelling single-payer back and forth, let's discuss that.

Right now, in this country, the government doesn't run anything in health care other than the ACA, and they're doing a poor job of that. Aetna was the first financial intermediary for Medicare. We have the first check somewhere in my office to Hartford Hospital. We ran Medicare. The government didn't. So what is single-payer, what does that mean? Let's be clear when we say that, so that as the American public hears this comment about single-payer, they know what we're talking about.

This is a good point: Single-payer systems can come in all shapes and sizes. There are some, like England's, where the government both finances all health care and owns the facilities. There are others, like Canada's, where all citizens enroll in a government-financed plan but the doctor offices and hospitals remain privately owned.

And there are still others, like Germany, where citizens are required to enroll in nonprofit "sickness funds," which offer a government-mandated set of health benefits. There are actually way more than four funds, as Bertolini suggests. One recent brief estimated there are 200.

Germany actually isn't traditionally thought of as a single-payer system; most health experts would consider it a multi-payer system, because you have multiple, competing health insurance plans. But the German system has many of the efficiencies of a single-payer system because all of its sickness funds band together to negotiate and set prices. You can read more about the German health care system (exciting Friday night, I know!) in this great brief from the Commonwealth Fund.

You don't have to look to Germany for this type of single-payer. Just look at Vermont.

When Vermont was working on its now-failed bid to build a single-payer system in the early 2010s, it settled on a model that sounds a whole lot like what Bertolini is describing.

The architects of the Vermont single-payer effort planned to run the state's universal coverage program. They figured the bidding process would bring in experienced and efficient health insurers who were steeped in the business of providing medical benefits.

And there was some politics involved too: Insurers were less likely to oppose a system that wouldn't put them out of business. William Hsiao, a Harvard professor who helped design the program, wrote:

Preserving a role for private insurance would also reduce opposition to the plan from this sector, especially because the dominant insurance company in the state, Blue Cross Blue Shield of Vermont, would be a natural contractor for the single-payer system.

Vermont's single-payer system never got off the ground; the state backed off when it recognized the significant tax hikes it would need to finance such a system. Still, it's notable that both Bertolini and the Vermont architects saw a similar path toward how a single-payer system could become a reality in the United States.