CEO Interview: Michael McCallister of Humana

Confounded by Health-Care Reform Michael McCallisterChairman and CEO, Humana We’ve been fortunate as a company to have doubled in size [...]

November 1 2010 by Dale Buss

Confounded by Health-Care Reform

Michael McCallister
Chairman and CEO, Humana

We’ve been fortunate as a company to have doubled in size in four years, but there are clouds on the horizon. For one thing, like the rest of the nation we’re grappling to implement a health-reform law that has some good things in it. But it failed in its two main objectives: bringing down costs and eliminating the uninsured. In 2020 we still will have 28 million uninsured Americans.

The second overall thing we’re dealing with is not coming to grips with the underlying reasons health-care costs are rising; the bill didn’t help us much there. Demographics is part of it; there also are Americans’ negative behaviors and preventable diseases. One of the biggest drivers of this is the obesity epidemic.

We all know the solutions: Eat less; exercise more; stop smoking. But people don’t do that. For our company, that is the biggest challenge in terms of the role we can play in health care. There’s a long-term answer, which is a business opportunity for us.

Under health-care reform, we reorganized one-sixth of the U.S. economy. The costs of everything rise in the short term until services rise later. We’re implementing it as fast and efficiently as we can, but it’ll be a challenge to get it done. And the implications for the public are higher premiums and higher costs.

In the small-business world, employers are dropping coverage altogether. And where we have companies that are continuing customers, we can see that they’re reducing the number of employees they’re insuring.

Humana, a $32 billion company headquarted in Louisville, is one of America’s largest health-insurers.