CIGNA Choice Fund(R) Members Spending Less Out-Of-Pocket, Continuing to Receive Recommended Care

New Study Measures Impact of CIGNA’s Consumer-Driven Health Plan on Costs, Quality and Consumer Decision-Making

BLOOMFIELD, Conn., Nov. 8, 2006 /PRNewswire-FirstCall/ — The results emerging from a year-long analysis of first-time users of CIGNA HealthCare’s consumer-driven health care plans indicate that these members are becoming more cost-conscious, but are not sacrificing recommended care to save money and are also benefiting financially. Key findings from the analysis show that:

 -- CIGNA Choice Fund is helping to control costs -- Costs for CIGNA Choice Fund HRA and HSA members decreased and were about 16 percent lower than costs for those enrolled in traditional plans;
-- Cost-shifting did not occur -- Member out-of-pocket costs decreased for CIGNA Choice Fund HRA members when compared to the prior year;
-- Members continued to receive appropriate care -- CIGNA Choice Fund HRA and HSA members increased their use of preventive care services, health care quality was maintained on hundreds of measures of evidence-based medicine, and use of medications that support chronic conditions increased, signaling that members are not foregoing needed care;
-- Consumers are becoming more engaged -- Consumers report increased awareness and engagement in managing their health care as compared to two years ago.

“Our experience illustrates clearly that when structured and implemented effectively, consumer-driven health plans offer a viable approach to addressing the critical challenges facing our health care system – improving quality and managing costs,” said H. Edward Hanway, chairman and chief executive officer of CIGNA Corporation. Hanway referenced some of the key findings of the CIGNA study during a keynote address today at the Second Annual Consumer-Centric Healthcare Congress in Washington, D.C. He also urged health benefits providers to become “health advocates for consumers” and called for an industry-wide commitment to providing quality and cost information that builds consumer knowledge and fosters consumer engagement in health care.

Earlier this year, CIGNA HealthCare released the first phase of findings based on six months of data in one of the largest consumer-driven health care studies to date. The latest findings based on 12 months of data show accelerated medical cost savings with CIGNA Choice Fund — a difference of about 16 percent — when compared to the traditional plan population studied, validating the initial analysis.

Members reduced their share of health care expenses

The data show that cost-shifting did not occur. Total out-of-pocket expenses for CIGNA Choice Fund Health Reimbursement Arrangement (HRA) plan members fell from 19 percent of total health care costs to 16 percent, excluding the costs of premiums, after their switch to a consumer-driven plan. Premium contributions are typically 10 percent to 20 percent lower for consumer-driven plans, meaning the overall cost saving to members is likely somewhat higher than the study result indicated. Many members also benefited from the employer-financed reimbursement account. The average total cost share of 16 percent would have been 27 percent without the availability of the reimbursement account.

Member out-of-pocket costs for those enrolled in the HRA plan are similar to those of members enrolled in a traditional plan. Cost savings were seen across varied levels of health care consumption as well, with approximately 92 percent of CIGNA Choice Fund HRA members experiencing lower out-of-pocket costs than if they had remained in a traditional plan. At the lowest spending level (claims less than $1,000), member share of costs declined from 39 percent to 16 percent. At the moderate spending level (claims of $1,001-$7,999), member share of costs declined from 28 percent to 26 percent. And at the highest spending level (claims of $8,000 and higher), member share of costs remained stable at 11 percent.

“These findings counter the perception that consumer-driven plans simply move more costs to consumers or can only benefit the healthy. The results show that a thoughtful plan design can remove costs from the system, not just shift them elsewhere,” said Michael Showalter, senior vice president of health care strategy and marketing for CIGNA HealthCare. “And more importantly, the right plan design also helps promote quality improvement.”

Members continue to receive recommended care

In an evaluation of compliance with 302 evidence-based measures of health care quality, for example, women having a mammogram in the past 24 months or diabetes patients having a physician visit in the last six months, CIGNA Choice Fund members continued to receive recommended care at the same or higher levels as those enrolled in traditional plans for approximately 96 percent of the measures studied. In addition, preventive care visits for CIGNA Choice Fund members increased by eight percent over the prior period, with these members receiving preventive care at higher rates than those enrolled in traditional plans by 12 percent.

Consistent with study findings published earlier this year, CIGNA Choice Fund members are also more compliant with medications that manage ongoing conditions, and more likely to engage in preventive care when compared to traditional plan members.

Changing consumer attitudes highlight ongoing need for information and support

In addition to examining claims data to study behavioral changes after enrollment in a consumer-driven plan, CIGNA HealthCare also conducted a member survey to examine consumer engagement in health care and attitudes and behaviors related to use of health care information and health care costs.

The survey showed that members polled are more engaged in their health care than they were two years ago, regardless of the type of plan in which they were enrolled. For example,

-- More than two-thirds (68 percent) of respondents reported they are more actively working to maintain or improve their health than they were two years ago.
-- Fifty-eight percent said they are more personally involved in making decisions about their health than they were two years ago.
-- More than half of respondents agreed they are more able to make informed decisions about their health care (54 percent) or ask the right questions when they talked to their doctor (60 percent) than they were two years ago.

CIGNA Choice Fund members were more likely than those enrolled in traditional plans (37 percent v. 28 percent) to agree that they used their health plan’s programs, such as a discount program or health coaching, to help them improve or maintain health.

While many consumers reported that their awareness of the costs and quality of care had increased compared to two years ago, only about four in ten surveyed agreed that they are usually aware of the actual costs of the health care services they get or have an easy way to find out how much health care services would cost. About six in ten (59 percent) respondents agreed they have an easy way to find information on health care quality.

Consumers of both plan types expressed a clear preference for quality information, rather than cost information, to help them choose doctors or facilities for care. This was true for all types of service, including selecting a facility for inpatient, outpatient or high-tech radiology services, selecting a physician for an office visit or a lab for lab tests. For example, about three-fourths (76 percent) of members indicated they would use quality comparison information to select a hospital for an inpatient procedure, such as heart surgery. By contrast, only half indicated they would use cost comparison information to do so.

“This finding reaffirms that quality comparisons are more meaningful to consumers as they make decisions on where to seek care,” Showalter said. “It also tells us that our continued strategy of providing consumers first with information on the quality of care and then information on the cost of that care, will be the approach most valued by consumers.”

“Consumer-focused approaches in health care have awakened the need for more information and support that helps consumers make informed decisions and helps them to better interact with the health care system,” said Showalter. “Though we are encouraged by the progress that’s been made, we also recognize we must continue our work to address the issues that consumers tell us would improve their experience.”

About the Study

This study examined claims and clinical data of approximately 38,200 continuously enrolled members who switched from a traditional HMO or PPO plan to one of CIGNA HealthCare’s HRA or HSA plans in 2005. The analysis compared this group’s claims for the 12-month period January 2005 through December 2005 to their claims from the same period in 2004. To examine pharmacy costs and utilization, the study reviewed the claims experience of 2,300 CIGNA Choice Fund members who had a combined medical and pharmacy deductible through CIGNA HealthCare. In addition, the study also compared this group’s health care costs and utilization patterns to those of 231,600 members enrolled in a traditional HMO or PPO plan from the same employer groups during the same January-December 2005 time period. Pharmacy analysis for the traditional population was based upon 109,000 members.

The study drew upon data from 44 different employer groups offering CIGNA HealthCare’s consumer-driven health care plans to employees. The consumer survey was based on a telephone survey of 807 CIGNA HealthCare members, 406 enrolled in CIGNA Choice Fund plans and 401 enrolled in traditional plans from among these same employer groups, fielded from August 8 to September 6, 2006. This survey has a margin of error of +/- 4.9 percent.

About CIGNA HealthCare

CIGNA HealthCare, headquartered 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” refers to various operating subsidiaries of CIGNA Corporation (NYSE: CI – News). Products and services are provided by these operating subsidiaries and not by CIGNA Corporation.

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