CIGNA Consumer Driven Health Plans Cut Medical Trend in Half; Member Savings Compound over Time, Two-Year Experience Study Finds.

Plan Design Key to Maintaining Health Benefits While Cutting Costs

BLOOMFIELD, Conn. -- Medical cost trend for CIGNA HealthCare consumer driven health plan (CDHP) members is less than half that of CIGNA's HMO and PPO plan members, and CIGNA CDHP members' cost savings compounded over time -- even as members used more preventive services relative to traditional plan members, according to a new two-year study of the health care claims experience of more than 430,000 CIGNA CDHP and traditional HMO and PPO members.

Key findings of the 2007 CIGNA Choice Fund Experience Study (http://cigna.tekgroup.com/images/56/CIGNA_CDHP_Study.pdf) include:

* CDHP medical trend is less than half the trend for HMOs and PPOs: Medical costs for first-year CIGNA CDHP members were more than 12% lower and were 5% lower for second year members relative to CIGNA HMO and PPO members. CIGNA CDHP medical trend for second year members was 4.4% compared with a 9.8% trend for CIGNA's traditional plan members.

* Member out-of-pocket costs were similar: First year Health Reimbursement Arrangement (HRA) cost share percentage (% of member paid costs) was similar to traditional plans while second year CDHP member cost share percentages were 4% less for both HRA and Health Savings Account (HSA) members. These out-of-pocket costs do not account for the fact that payroll contributions for HRA and HSA are generally lower, providing members with additional savings. Notably, these results were similar regardless of gender or health status.

* Use of preventive care increased: First-year member preventive visits increased and second-year member visits were significantly higher than those among traditional plan members.

* Recommended care compliance remained constant: CIGNA Choice Fund members continued to receive recommended care at similar compliance rates as traditional plan members.

* Medication compliance improved, while costs decreased: Use of maintenance medications that support chronic conditions increased while costs decreased over the period for CIGNA Choice Fund members.

"CIGNA's research based on two years of claims data adds to the mounting evidence that consumer-driven health plans offer an affordable, cost effective way to provide benefits that can save money, increase consumer engagement, and not compromise the quality of care," said Helen Darling, president of the National Business Group on Health, a non-profit organization devoted to finding innovative and forward-thinking solutions to large employers' most important health care and related benefits issues. "As we debate in earnest, at national and state levels, how to provide insurance for millions of people without protection, consumer-driven plans have to be at the top of the list of reasonable solutions."

Responsible Plan Design is Key

The sharp, sustained decline in CIGNA Choice Fund consumer driven plan and member costs - achieved without reductions in care or shifting costs to members - is a result of responsible consumer driven plan design, according to CIGNA HealthCare President David Cordani.

"This two year study of actual claims experience provides solid evidence that consumer driven plans can improve costs for both employers and members while providing needed care - when the plan is properly designed," said Cordani. The key elements to successful CDHP plan design include:

1. 'Actuarially equivalent' design (e.g. benefit levels that are comparable to previous traditional plans): reduces costs year-over-year without shifting costs to members by featuring employer-funded accounts - such as HRA and HSAs - an approach that increases both member enrollment and satisfaction;

2. 100% coverage of preventive health services: which may improve member health and plan satisfaction;

3. Robust quality and cost decision support tools: help members make informed health choices that can improve health outcomes and cost efficiency;

4. Proactive health coaching: All CIGNA Choice Fund members are automatically included in the CIGNA Health Advisor program, and receive clinician coaching to promote enhanced consumer engagement on key health issues, wellness and at risk conditions.

Member Health Care Savings Compound

Significantly, the data show that cost-shifting did not occur. Out-of-pocket expenses for first year CIGNA HRA members were similar to those of traditional plan members - and cost share percentages were 4% less for both HRA and HSA members in the second year. These results were similar for both men and women and regardless of health status. The increase in second-year member out-of-pocket savings reflects the result of fund rollovers. Notably the study's findings do not include the cost benefit of lower premiums that are typically 10 percent to 20 percent lower for consumer-driven plans.

These findings counter the misperception that consumer-driven plans simply move more costs to consumers or can only benefit the healthy.

"The reality is thoughtful plan design can remove costs from the system, and those cost savings can be sustained and actually compound over time," said Michael Showalter, senior vice president of health care strategy and marketing for CIGNA HealthCare. "Even more importantly, the right plan design also helps promote health improvement."

Members Continue to Receive Recommended Care

CIGNA Choice Fund members continued to receive recommended care at the same or higher levels as those enrolled in traditional plans in an evaluation of compliance with more than 300 evidence-based measures of health care quality. Preventive care visits for CIGNA Choice Fund members were 12% greater when compared to traditional plans and preventive care visits for second year CIGNA Choice Fund were 14% greater when compared to traditional plans.

Pharmacy costs for new CIGNA Choice Fund members were 6% lower than traditional plan costs. Utilization was higher for new CIGNA Choice Fund members and cost per day was lower, for both maintenance and acute medications, suggesting that members were compliant with their medications while exercising lower-cost options such as purchasing their medications by mail order and electing to use generic medications.

Online Tools Offer Decision Support

Study results suggest that health care members are becoming more engaged in their health care, with increasing numbers of CIGNA HealthCare consumers turning to online information and decision support tools offered via myCIGNA.com. This secure, personalized Website was the first to: compare hospitals for treatment outcomes; provide actual prescription medication costs; provide radiology and outpatient surgery costs and real-time medication pricing according to the members' health plan; automatically input clinical test results into a member's Personal Health Record and integrate this data into an online health risk assessment.

Recently, CIGNA launched a third-generation CIGNA Prescription Price Quote tool that offers CIGNA Pharmacy members real-time, plan-specific cost comparisons for generic, brand name and available therapeutic alternative medications at 57,000 pharmacies nationwide, as well as from CIGNA Tel-Drug home delivery pharmacy.

About CIGNA HealthCare

CIGNA HealthCare, based in Bloomfield, CT, provides medical benefits plans, dental coverage, behavioral health coverage, pharmacy benefits and products and services that integrate and analyze information to support consumerism and health advocacy. "CIGNA HealthCare" is a registered service mark of CIGNA Intellectual Property, Inc., licensed for use by CIGNA Corporation (NYSE:CI) and its operating subsidiaries, including Connecticut General Life Insurance Company. Products and services are provided by such operating subsidiaries, and not by CIGNA Corporation. For more information, visit www.cigna.com.