Wall Street Between You and Your Doctor: Former Goldman Sachs Exec Anointed Aetna Boss
NYC retirees staged a “die in” outside City Hall back in 2021 to protest attempts to push them into a profit-driven Medicare Advantage program. Photo by Joe Maniscalco
By Bob Hennelly
CVS Health has named Brian Kane as the Executive Vice President and President of Aetna, effective September 1. He will report to CVS Health President and CEO Karen S. Lynch. Last month, New York City Mayor Eric Adams signed a contract with Aetna as part of the administration’s campaign to strip 250,000 municipal retirees of their traditional Medicare benefits and push them into a profit-driven Medicare Advantage program.
"Brian has a track record of bringing customer-driven innovations to the market and delivering strong operating improvements," said Lynch in a statement. "His passion to simplify the health care experience will advance our strategy to improve health, lower costs and drive higher levels of engagement among our members."
Several groups of retirees led by the New York City Organization of Public Service Retirees [NYCOPSR] continue to protest the push into Medicare Advantage — an effort dating back to the de Blasio administration — citing a profit-making business model that relies on delaying and denying people care through the use of prior authorizations. Roughly 1,000 retired civil servants and their supporters rallied outside the gates of City Hall ahead of an April 11 City Council hearing to protest the Aetna contract.
Kane is one of the nation’s leading figures in Wall Street’s full court press to financialize and extract profits out of the American healthcare system as the nation continues to feel the aftereffects of a pandemic that killed 1.1 million Americans and left millions more with a wide range of symptoms from long COVID.
"CVS Health has a unique collection of assets – including the Aetna business – that provide the opportunity to improve access to quality health care for all Americans," said Kane in a statement. "My focus will be working with talented colleagues across the organization to help build on existing efforts to make health care simple, personalized and affordable."
Kane most recently worked as a strategic consultant to several leading private equity firms that are targeting the health care sector, a trend that alarms healthcare access and affordability advocates. From 2014 until 2021 Kane served as the Chief Financial Officer for Humana and focusing on its primary care businesses and joint venture physician assets.
Before joining Humana, Kane spent 17 years at Goldman Sachs in the Investment Banking division. He serves on the board of trustees of the New-York Historical Society Board of Trustees, the Board of Directors of the Louisville Orchestra and Teach for America-Appalachia’s Executive Advisory Board.
“Brian’s health insurance work concentrated on the coverage of the national and government-focused managed care organizations, and he acted as the lead financial advisor on many of the industry’s most important strategic transactions,” according to his bio on the New York Historical Society website.
Kane holds an MBA from Harvard University and a Bachelor of Arts degree, with distinction, in Economics and Political Science fromStanford University.
“The appointment of Brian Kane as Executive Vice President of CVS Health and President of Aetna validates our very real worries that the city’s decision to place us in the terrible Aetna Medicare Advantage healthcare plan is about putting profit over people,” said Marianne Pizzitola, president of the NYC Organization of Public Service Retirees. “Hedge fund managers should not be making decisions about our healthcare, doctors should. The people approving life-or-death procedures should be focused on patients' health, not profitability and cost-cutting."
“Aetna and CVS have shown what their main interest is with the appointment of Brian Kane,” said Wendell Potter, a former health insurance executive and national campaigner for single payer healthcare. “Having come from Humana, which has doubled down on Medicare Advantage-- to the point that it is getting out of the employer-sponsored health insurance business, as well as from Wall Street, we can expect Kane to focus on Medicare Advantage for profitable growth, which is what Wall Street now expects of insurers.”
Potter continued. “Medicare Advantage has replaced employers as insurers’ main source of revenue and profits. That’s because insurers have rigged the system to maximize payments from the government and their ability to keep Medicare Advantage enrollees from getting the care they need from doctors and hospitals they prefer.”
Last year, the New York Times and Kaiser Health News published extensive investigative pieces which raised alarming questions about the nation’s largest Medicare Advantage insurers including Humana and Aetna.
“Eight of the 10 biggest Medicare Advantage insurers — representing more than two-thirds of the market — have submitted inflated bills, according to the federal audits,” the Times reported. “And four of the five largest players — UnitedHealth, Humana, Elevance and Kaiser — have faced federal lawsuits alleging that efforts to over diagnose their customers crossed the line into fraud.”
“The fifth company, CVS Health, which owns Aetna, told investors its practices were being investigated by the Department of Justice,” according to the newspaper.
“A study from the Kaiser Family Foundation, a research group unaffiliated with the insurer Kaiser, found the companies typically earn twice as much gross profit from their Medicare Advantage plans as from other types of insurance,” the Times reported.
The bottom line, the Times observed, was that Medicare Advantage “a program devised to help lower health care spending has instead become substantially more costly than the traditional government program it was meant to improve.”
Several years ago, Kane as the CFO of Humana, was a key player in that company’s attempt to consolidate with another national insurance company which looked to be Aetna until the deal was challenged by the U.S. Department of Justice under President Obama over concerns it violated anti-trust laws and would greatly disadvantage consumers.
A federal judge agreed in a ruling that Deputy Assistant Attorney General Brent Snyder hailed as “a victory for American consumers.” The District of Columbia and the states of Delaware, Florida, Georgia, Illinois, Iowa, Ohio, Pennsylvania, and Virginia had joined in the effort to block the mega-merger.
“Competition spurs health insurers to offer higher quality and more affordable health insurance to seniors who choose Medicare Advantage plans and to low-income families and individuals who purchase insurance from public exchanges,” Snyder said in a statement. “This merger would have stifled competition and led to higher prices and lower quality health insurance. Aetna attempted to buy a formidable rival, Humana, instead of competing independently to win customers.”
“Humana's top brass have a lot at stake,” reported Business Insurance in 2015. “Mr. Broussard's (Humana CEO) golden parachute is valued at $31.3 million if the deal is approved, with more than 75 percent of that total coming from accelerated stock and option awards. Mr. Kane, the CFO, would receive $12.9 million. Humana Chief Operating Officer Jim Murray is slated to collect $15.3 million.”
Business Insurance described how at one point in Humana’s hunt for a suitor it observed that “claims for its Medicare Advantage business — which represents three-quarters of its revenue — and determined it was not sure if its reserves were adequate to cover spikes in utilization. Humana had sent managed-care stocks into a tailspin in April when it said it was experiencing higher-than-expected inpatient admissions from its Medicare members.”
The speculation premium was not for the faint hearted but a rush for Wall Street deal makers.
“Humana will have to pay Aetna a $1.3 billion termination fee if the agreement goes sour because Humana didn't live up to its obligations, and Aetna will have to pay Humana $1.7 billion in the reverse scenario,” Business Insurance noted. “Aetna will have to pay Humana a lesser $1 billion fee if the government puts the kibosh on the acquisition.”
Last year, the Medicare Advisory Payment Commission reported to Congress that in 2020 at least $12 billion in overpayments were made to Medicare Advantage Plans by the federal government.