Aetna HealthFund First-Year Results Validate Positive Impact of Health Care Consumerism.

HARTFORD, Conn. -- New study of 13,500 members shows lower medical costs and increased utilization of preventive care 

Aetna (NYSE:AET) announced today the results of a research study of first-year members in its Aetna HealthFund(R) Health Reimbursement Arrangement (HRA) plan. The study of 13,500 HealthFund members, analyzing claims and utilization data for the full 12 months of 2003, provides further validation that the consumer-directed plan encourages active engagement in health care decision-making. Among the key findings, employers offering these plans as an option experienced low medical cost increases of 3.7 percent, while a full replacement plan sponsor experienced a medical cost decrease of 11 percent. These savings were driven by lower member utilization of physician and facility services. At the same time, member utilization of some preventive care measures increased by as much as 23 percent, and diabetic members either maintained or increased the frequency with which they received important tests and screenings.

"Aetna continues to break new ground by studying the impact of health care consumerism on members of our Aetna HealthFund family of products, and publicly releasing our results," said Aetna President Ronald A. Williams. "We're pleased to see that the full-year findings for our Aetna HealthFund members are consistent with the preliminary results released earlier this year. In short, these early indicators show that the consumer-directed elements of the plan appear to have a positive impact on controlling health care costs, while at the same time enabling members to access the care that they need for both routine and certain chronic health care conditions."

This study is consistent with Aetna's February 2004 review of nine months of 2003 claims and utilization data for Aetna HealthFund members, following substantially the same population through their first full year of experience in the plan. The study included employees from 19 different employers and compared 12 months (January through December) of 2003 claims and utilization data, to 12 months of experience for the identical group of members in 2002 (prior to their joining Aetna HealthFund). For comparison purposes, the members were also benchmarked against 338,000 similar members (based on demographics, coverage, health status, health severity and geography). Risk-adjusted modeling techniques that reviewed population characteristics based on demographics, clinical indicators and severity of illness were used to validate conclusions.

Key study findings show that:

    --  Aetna HealthFund members are seeking increased preventive care
        in most cases, and are maintaining their level of care in
        others.

        --  General adult preventive exams increased by 23 percent,
            compared to an 8 percent increase for a similar population

        --  Gynecological exams increased 4 percent for both Aetna
            HealthFund members and a similar population

        --  Child preventive exams for three to four year olds
            increased 4 percent, comparable to a 5 percent increase
            for a similar population; for five to nine year olds
            preventive care increased by 8 percent, compared to a 6
            percent increase for a similar population

    --  Aetna HealthFund members with diabetes either maintained or
        increased the level of care they received on important tests
        and screenings.

        --  Based on four HEDIS measures for diabetic care - glycated
            hemoglobin testing, lipid screening, micro albumin
            screening and retinal eye exams - members were found to be
            either maintaining or increasing their level of care. For
            example, on a year-over-year basis the percentage of
            diabetic members receiving at least one glycated
            hemoglobin test increased by 6 percent and the percentage
            of those receiving at least one micro albumin increased by
            4 percent, while the other two screenings were comparable
            to previous levels.

    --  Aetna HealthFund appears to be effectively controlling health
        care costs.

        --  Employers experienced a 3.7 percent medical cost increase,
            compared to double-digit increases for a similar
            population

        --  For the one full replacement plan sponsor in the study,
            medical costs decreased by 11 percent

        --  The low medical cost increases for all members in the
            study were driven by two major factors: a reduction in
            certain physician visits, including an 11 percent
            reduction in primary care office visits, and a modest 3
            percent increase in specialist visits; and a reduction in
            utilization of facility services, including a 3 percent
            decrease in emergency room visits, a 14 percent decrease
            in outpatient cases, and a 5 percent decrease in inpatient
            admissions

    --  Aetna HealthFund is helping to control pharmacy costs and
        encouraging the usage of generic medications.

        --  Members experienced a 5.5 percent decrease in pharmacy
            costs driven by a 13 percent decline in overall
            prescriptions and a 7 percent increase in overall generic
            utilization

"As a business facing intense competition and cost pressures, Logan Aluminum chose Aetna HealthFund because we saw its potential to help hold the line on a disturbing cost trend. But we also made this decision for the benefit of our employees," said Howard Leach, head of human resources, Logan Aluminum, Inc. Logan Aluminum is among the 19 plan sponsors included in the 12-month study, and is the only full replacement plan included. "Now, with more than a year's experience in a consumer-directed plan, I am confident that we made the right call based on the fact that we've been able to reverse unsustainable health care cost increases, while at the same time not negatively impacting our employees' use of preventive services and the care needed for serious medical issues."

The 12-month study is the second in an on-going series of studies that Aetna is undertaking to determine the impact of health care consumerism on Aetna HealthFund Health Reimbursement Arrangement members. Aetna is committed to researching the impact of the plan over time, including taking a closer look at utilization patterns, further reviewing the health status of members, studying a population that has been in the plan for two years, examining member behavior before and after the deductible is met, and further reviewing maintenance care for members with chronic conditions. All Aetna HealthFund research is conducted by Aetna Integrated Informatics, Aetna's in-house data measurement subsidiary.

Aetna launched its first-generation Aetna HealthFund HRA product in September 2001. Since that time, the Aetna HealthFund family of products has expanded to include a wide variety of fund and account options meeting the unique needs of employers of all sizes. These choices include the Aetna HealthFund Health Savings Account (HSA), Aetna HealthFund Retiree Reimbursement Account (RRA), Aetna HealthFund Flexible Spending Account (FSA) and Aetna HealthFund First Dollar. Aetna HealthFund leverages Aetna's unique resources, including one of the largest networks of physicians, dentists, hospitals, pharmacies and health professionals; its extensive experience in claims payment and administration of innovative health benefits; and the company's powerful online resources and self-service tools.

As one of the nation's leading providers of health care, dental, pharmacy, group life, disability and long-term care benefits, Aetna puts information and helpful resources to work for its approximately 13.3 million medical members, 11.2 million dental members, 8.1 million pharmacy members and 12.4 group insurance members to help them make better informed decisions about their health care and protect their finances against health-related risks. Aetna provides easy access to cost effective health care through a nationwide network of more than 618,000 health care professionals, including over 370,000 primary care and specialist doctors and 3,783 hospitals. For more information, please visit www.aetna.com.