Aetna, one of the largest healthcare insurers in America, recently raised the minimum base hourly wage for its approximately 5,700 US employees to $16/hour. It also launched a medical benefits program for 2016, to help lower the health care expenses for its approximately 7,000 US employees. The low-earning workers in healthcare customer service, claims administration, plan sponsor eligibility, and billing are set to get financially and medically secure from these two initiatives. Aetna’s CEO-Mark Bertolini, calls the two initiatives an investment in the future of healthcare service.
“We’ve flipped the paradigm and said, “Let’s invest in husband or scarce resource, which is talent — a motivated, engaged, present worker. And let’s put at risk some of our capital to do it.” Because, if people can’t make ends meet at home with food, benefits, health, and health care in particular, how can they be present, engaged, knowledge workers when they come to work? [This is our way of telling the employees] If you take care of us, we’ll take care of you. If you take care of our customers, we’ll make sure that you earn a fair living, so that you can engage in your communities and can take care of your families.” Is that a good deal for us? I think it has got to be a good deal,” said Bertolini in an interview to PBS.
When a company like @Aetna raises wages, it is a sign of respect for employees. http://t.co/hOsYsLvLDJ #FightFor15 pic.twitter.com/Nti7O55f0m
— Jobs With Justice (@jwjnational) May 9, 2015
Aetna CEO is betting that bringing yoga, meditation & higher wages to his employees will be good business. http://t.co/wjeVmMd0ey — Medio Waldt (@mediowaldt) May 30, 2015
Earlier, Aetna’s low-wage workers were largely dependent on public assistance, like food stamps or Medicaid for their children. When Bertolini came to know of this fact he was shocked.
“Here we are a Fortune 50 company and we’re about to put these people into poverty, and I just didn’t think it was fair,” he said in January during a “Squawk Box” interview from the World Economic Forum in Davos, Switzerland.
He wanted to boost the compensation but the cost was significant – about $27 million a year. Then he thought the potential benefits (low-paid workers provide unsatisfactory customer service, quit more often, and the turnover is expensive; higher-paid workers offer better customer service, stay longer with the company and improve a company’s profits in the long run) could offset the $27 million cost. Aetna spends about $120 million in expenses associated with rehiring and retraining each year.
“We wanted people at the front lines who took care of our customers to not have the kind of stress associated with being able to provide health coverage for their families and food for their families, worrying while they were on the job. To make sure that they were bringing their best selves to work every day,” he said.
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