As a Fortune 50 company, Aetna Inc.'s $63 billion in annual revenue and stock price of more than $147 per share several years ago wasn't enough for Chairman and CEO Mark Bertolini.
He wanted to make sure Aetna's frontline employees, some of whom earned $12 per hour and couldn't afford Aetna's own health insurance policies, believed in the company where they worked.
"We are in a very interesting time in the economy and the nation. Our journey (at Aetna) is how do we make us strong," Bertolini told a gathering of the Detroit Economic Club on Monday at the Townsend Hotel in Birmingham, Mich. "Our mission is to build a healthier world. But what is health?"
Bertolini talked about how companies like Aetna are investing in communities and their workforce to achieve long-term financial and human capital success.
Health is not just about the physical body, he said. It encompasses whether a person is happy, productive and feeling good.
"Two-thirds of employees (at companies) do not feel engaged," he said, quoting a recent survey. "This (hurts) our customers and our businesses."
In 2010, Bertolini said he believed it was up to government to lead the way and fix problems for the public and corporations. But with American companies sitting on $4.2 trillion in cash, more than half in offshore and overseas accounts, he said companies also have a responsibility.
"I have concluded that only corporations can lead us forward. We need to establish our credibility as leaders," he said. "I see my job as establishing that credibility. We need to make that pitch."
Bertolini, at times sounding more of a socialist than a capitalist, said the process to create value and change the world starts first with people, then with Planet Earth, and then profits.
"Profits are an outcome. We have to make a margin. Ascension (the largest nonprofit health care company) says: 'No margin, no mission.' If you don't invest in your business you cannot move forward."
But Bertolini said visits he made to Aetna offices around the country in 2013 and 2014 revealed to him that many frontline employees didn't make enough money to make ends meet.
"Some were making $12 per hour, mostly women, 75 percent of them. They have families on food stamps and can't afford health insurance. I said we can't do this," Bertolini said.
As he thought about what do do, Bertolini, who received an undergraduate degree in business administration from Wayne State University in Detroit, said he began to ponder the inadequacies of the U.S. tax code.
"As we look at how we invest in capital. We can depreciate physical capital, but not human capital," he said. "It is cheaper to invest in a machine than young people. We need to neutralize our tax law. Human capital is just as important."
So, for starters in 2015, Bertolini decided to raise Aetna's minimum wage to $16 per hour. He also spent $179,000 on a program to offer yoga and mindfulness wellness programs to workers.
"We saw dramatic returns in those populations. We saw a 62-minute per month increase in productivity," he said. Data showed employee stress level dropped dramatically, he said.
"Our health care costs went down by 7 percent" on an annual basis, he said. "We saved a lot of money, but I can't tell you how much it improved lives." He said he is convinced lives and families were saved.
But Bertolini wanted to do more.
Aetna then changed its employee health insurance benefit program to reduce out-of-pocket expenses to zero if employees agreed to an annual health risk assessment and joined a wellness and case management program.
"Our share price went from $29 to $147 per share," he said. "Our (benefit program) cost $47 million per year. ... When I announced the program (at an annual meeting), all our shareholders we happy we were investing in people."
In 2016, Aetna increased tuition assistance from $3,000 to $5,000 per employee and this year began a program to reimburse student loans $2,000 per year for a lifetime max of up to $10,000 per employee. For part-time employees, Aetna will match contributions up to $1,000 a year with a lifetime maximum of $5,000.
"Wal-Mart raised (minimum wage) by $2 per year. For every $1, it costs them $1 billion. So they spent $2 billion. J.P. Morgan raised to $16 per hour. McDonald's raised their wages. This supports economic growth," he said.
Bertolini said companies also need to invest in communities by helping fund bike paths, parks and creating urban farms.
"Detroit has great opportunity to do more with parks and urban farms, to eliminate food deserts," said Bertolini, noting that Aetna has developed a company social compact. "We as a nation should be willing to pay (if people need food assistance, housing and safe neighborhoods). Violence and health care utilization reduces when somebody gets a home."
