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The following is the 'Charlie Rose Show’ Transcript:

June 16, 2009

Speakers: 
     Ronald Williams, CEO of Aetna
     Dr. Toby Cosgrove, CEO of the Cleveland Clinic
     Charlie Rose, Host

Rose: Joining me now from New York, Ronald Williams, CEO of Aetna, one of the country's largest health care providers. And from Cleveland, Dr. Toby Cosgrove. He is now the CEO of the Cleveland Clinic. I'm pleased to have both of them here at this time.

Tell me what your hope is and what your fear is about health care reform.

Cosgrove: Well, I hope that we were going to be able to drive better value for our health care dollar, and that's really about not just measuring the dollars, that's about measuring the quality that goes with it. And there are a number of things that health care organizations can begin to do across the country, and that's begin to put quality metrics to the delivery of health care. And ultimately, that drives better quality, and that drives better value for your health care dollar.

Rose: What's your fear?

Cosgrove: Well, my fear is that we are going to reduce the quality of the care by reducing the reimbursement for what is done.

Right now, 50 percent of the hospitals in the United States are running in the red.  That's a concern.  If we begin to reduce payments to those, I think ultimately, it begins to affect the quality of care.

Rose: Your hope and fear?

Williams: I think my hope is, really, that we find a way to bring the 45 million-plus uninsured into the insurance system so they can have a relationship with a physician and really get access to health care services the way that you or I would get access to health care services.

Rose: And your fear?

Williams: I think my fear is that we have to do it in a way that builds on the strengths of the employer-sponsored health care system and really takes the innovations that the employer-sponsored system has really been responsible for and makes that available to those individuals.

Rose: You know what the president wants to do. Are you at one with him?

Williams: Yes. I think that the objective that the president wants to accomplish, I'm very supportive of. I believe that we need to get everyone covered, and we need to make some fundamental changes in terms of improving the quality of the health care system.

Rose: In reaching that objective, you disagree with what?

Williams: Well, I think the issue that we're trying to better understand is really this whole question of the public plan, and I think that what we're trying to do is keep our eye on, really, the prize, which is really making certain that we get people covered and we do make fundamental improvements...

Rose: And you have been called in, and Ron Williams has too, to offer your advice and opinion on the part of the Congress, and I'm sure the president has reached out to you or your colleagues. What are you telling the president? And what are you telling the Congress?

Cosgrove: Well, we want to talk about the things that we had actually done that had helped us drive quality and drive down costs. We're now recognized as one of the high quality, low-cost providers in the country, and one of the ways that we got there is by our model of care, which really drove quality, and that is all of the physicians are employed. They are salaried. There is no financial incentives for them. There's therefore no incentive for them to order unusual or unnecessary tests or procedures.

And we are a totally integrated system. That means that the clinics, the hospital, the physicians, the medical school, the research institution are all one, and therefore are all reporting, and all report to, a physician, and therefore, all go in the same direction and coordinate care.

Those things drive quality. They drive efficiency. And when we bundle those together with our electronic medical record across the entire organization, we begin to connect to the patients and begin to drive the quality and the efficiency that we hope we would get from an integrated health care system.

Rose: Do you fear that the reform that may be coming will morph into a single-payer system?

Williams: I think that's one of the concerns that many people have. I think what I've tried to do is listen to the points of view of the different parties. There have been many proposals about the so-called government-sponsored plan. I'm not sure I really understand yet what it is, and I think I have been reassured that people are committed to a level playing field, and a level playing field essentially means that that entity does, in fact, have its own balance sheet, that it has its own capital base, that it is regulated by the insurance entities that regulate us, it has a credit rating, it's subject to the insurance laws of the various states, that if the attorney generals have issues with health plans, that they would have issues with those entities.

And I think that the real focus we try to come back to is that today there are 1,300 health plans in America. Half of the membership in those health plans are in not-for-profit health plans. The other half are in for-profit health plans. The average for-profit health plan makes about 6 percent a year, and we pay about 5 percent in taxes, and we believe that the value we create in the system is really a net benefit to society.

Rose: Do you believe prevention offers the economic savings that the administration hopes it does?

Cosgrove: Yes, I am -- I am very enthusiastic about wellness. If you look at what's going on in the United States, 40 percent of the premature deaths the United States come from three things. That's inactivity, obesity, and smoking -- all behavioral entities, all of which can be improved on by prevention, and we need to put some incentive for physicians and patients to engage in preventive medicine and wellness.

Rose: The question of the last year of care always raises the question of are we rationing health care? How do you address that idea? That all this money that goes in that last year -- and how do you approach it in an intelligent and humane way?

Cosgrove: Well, if I might step in there, I don't think that this is something we're either going to legislate. I think it is something that is worked out between the family, the patient and the attending medical care individuals. Granted that the majority of the cost of the last several years of care are around chronic diseases, and it's very high, and that's where a big percentage of money is being spent, but this is -- I don't think something that you can legislate, but I think as soon as people begin to understand that life is not infinite, and I think they will be beginning to get their arms around the financial implications and manage to handle it on an individual -- on an individual basis in a very humane way.

Rose: Go ahead.

Williams: This is actually an area we have done some research, and I think what we've found is there is a huge opportunity to align the way people pass with their own preferences. We talk to our members and we talk to them to understand what changes we needed to make, in our benefits and plan designs and services, and when we asked them, what we found were people who had very serious conditions and were terminal. About 78 percent of them preferred to pass in a hospice or at home.

When we looked at what actually happened, only about 22 percent were passing in those circumstances. And so what we did was we changed the benefit design so that the member could have access to hospice services and not have to abandon curative care. We also found that if we put in place respite care for the family, and we put in place a mechanism that gave them the ability to have a case manager who could help them understand all the possible treatments and opportunities, we got the actual rate up to the 78 percent that people indicated they wanted to achieve.

I think it really is a personal decision with the family and with the family physician, but I think there are things that health insurance companies and the broader health community can do to remove some of the obstacles that maybe barriers to the family's preferences.

Rose: What do you think the debate will be back in the end -- when push comes to shove, what will be the debate in Congress?

Williams: I think.

Rose: Where is the cutting-edge issue?

Williams: I think -- I think one of the debates we're beginning to see emerge, which is the whole question of how do we pay for the various proposals? I think it's very early in the process, and I think one of the things.

Rose: And whether the administration has the cost savings built into the process they're recommending?

Williams: That is correct, and that will turn on the issue of how the CBO, the Congressional Budget Office, actually scores the different proposals in terms of costs and benefits.

Rose: As of this moment, knowing what you know, do you think it can deliver that cost savings?

Williams: I think that -- that in the president's core principles that he has articulated, there are solutions that I believe can result in a scoring where the books can be balanced. I don't know that all of the different proposals that have been proposed by the different committees of Congress will, in fact, be able to be accomplished in that way.

Rose: Toby, what do you think will be the cutting edge of the debate in Congress between Republicans and Democrats, between those who look at this from different prisms?

Cosgrove: I think it will be two things. First of all, as Ron said, I think it's going to be paying for these programs and how many can be included. I think the second issue is going to be around a government-sponsored health insurance policy. I think that is quite deeply divided now between Republicans and Democrats.

Rose: I thank you very much. Toby Cosgrove from Cleveland. Thank you, a pleasure to see you again.

Williams: A pleasure to see you.

Rose: Ron Williams from Aetna.

END