Session 37 Consumerism: Carrier Results vs. Employee Perceptions

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Session 37 Consumerism Carrier Results vs.
Employee Perceptions
Dave Tuomala CIGNA HealthCare October 24, 2006
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Agenda

• Background on CIGNA CDHP study
• Medical trend results
• Pharmacy trend results
• Trends by service type and episode categories
• Quality of care results
• Risk selection results
• Cost share results

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CIGNA CDHP Experience Study

• Study of 38,211 continuously enrolled pre-CIGNA
  Choice Fund and post-CIGNA Choice Fund enrollees
  
• Trend comparisons are made to control populations
  of 231,680 HMO PPO enrollees from the same
  employer populations
• Pharmacy analysis is based upon 2,319 CIGNA
  Choice Fund members who had a combined medical
  and pharmacy deductible
• Twelve-month experience period (January
  December with run out through March) in both 2004
  and 2005
• One of the largest CDH studies to date with
  nearly 270,000 total study participants
• Study assesses both HRA and HSA performance
• Study drew upon 44 CIGNA Choice Fund client
  groups
• Analysis excludes catastrophic claims in excess
  of 50,000 from all populations to reduce random
  variation within smaller sets of data
• Analysis based on discounted charges observed
  differences are not the result of changes in
  benefit or increases in consumer cost sharing

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Source of Membership
Members switched to CIGNA Choice Fund in
relatively even fashion from both HMO and PPO
programs
Choice Fund program shows broad appeal based upon
previous plan experience
From HMO/POS
CCF HRA
CCF HSA
From PPO/OAP
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Average Age by Study Population
The CIGNA Choice Fund CDH population was slightly
younger than the traditional plan population
Average age is nearly identical between CIGNA
Choice Fund the HMO population within the
Traditional population
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Raw (Unadjusted) Trend Values
Unadjusted trends demonstrate small savings but
include potential for random variation.
CIGNA Choice Fund HRA, HSA and Total Trend vs.
Traditional Plans
-1
-3
-9
HRA
HSA
Total
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Adjusted Trend Values
Adjusted trend exclude catastrophic claimants and
effects of capitation. Results are more
comparable.
CIGNA Choice Fund HRA, HSA and Total Trend vs.
Traditional Plans
-10
-6
-5
HSA
Total
HRA
8
Differences By Claim Category All Medical
We observed savings across all spending
categories, but magnitude varies substantially.

Medical Cost Trend By Claim Categories CIGNA
Choice Fund (HRA HSA) vs. Traditional Plans
-19
-19
-11
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Differences By Claim Category HSA Medical Only
HSA trend appears to be lower for lowest claim
cohort. Small sample size, so limited
credibility.
Medical Cost Trend By Claim Categories CIGNA
Choice Fund (HSA) vs. Traditional Plans
-7
-14
-18
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Population Composition by Claim Costs
Differences in the mix of population by claim
level category demonstrates why standardization
is necessary to make reliable comparisons.

Membership Composition by Claim Costs
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Adjusted and Standardized Trend Values
Standardized trends adjust for differences in
claimant mix between populations.
CIGNA Choice Fund HRA, HSA and Total Trend vs.
Traditional Plans
-15
-16
-16
HRA
HSA
Total
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Pharmacy Utilization
Pharmacy costs were 11 lower than traditional
plan costs, while days supply was flat,
suggesting that members made more cost-effective
decisions as opposed to skipping medications
Pharmacy Utilization CIGNA Choice Fund vs.
Traditional Plans
-11
Generic days supply increased over 9 percent year
over year among CIGNA Choice Fund members
-9
-2
Eligible Charges/Day
Eligible Charges
Days Supply
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Differences By Claim Category Pharmacy
Pharmacy trend shows greater savings for lower
claim sizes opposite pattern vs. medical.
Small sample size, so limited credibility.

Pharmacy Cost Trend By Claim Categories CIGNA
Choice Fund vs. Traditional Plans
-13
-19
-22
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Trend by Service Type - Standardized
Standardized trends adjust for claimant mix
between populations.
Medical Costs by Type of Service CIGNA Choice
Fund (HRA HSA) vs. Traditional Plans
-24
-19
-9
-15
Professional
Other
Inpatient
Outpatient
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Medical Trends by Health Status
Healthy members were not the primary source of
cost savings in CIGNA Choice Fund plans
Medical Trends by Health Status CIGNA Choice Fund

• Member Totals
• Remained in each health status category -3
• Switched between categories -4.8
• All members -3.5

Chronic care
Episodic care
Healthy/ Low Cost
Individuals who were categorized within the
same health status segment in both 04 and 05
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Pharmacy Trends by Health Status
Pharmacy costs declined relative to traditional
plan trends for all health status categories
Pharmacy Cost Trends CIGNA Choice Fund vs.
Traditional Plans
Overall, CIGNA Choice Fund pharmacy cost
increased .6
-11
-16
-12
Episodic Care
Healthy/No Cost
Chronic Care
Includes all pharmacy costs chronic or
episodic care for members of a category
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Medication Compliance
CIGNA Choice Fund members are more compliant with
medications that manage ongoing conditions, and
more discerning in their use of medications with
OTC alternatives
Medication Days Supply Select Drug Classes
Anti-Infectives
Penicillin - 8
Pain
Migraine - 29
Anti-ulcer - 18
Gastrointestinal
Diabetes
Hypoglycemic 33
Cardiovascular
ACE/ARB 10
Antihistamines -13 Asthma-related 21
Respiratory
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Preventive Care
Preventive care visits for CIGNA Choice Fund
members increased by 8 and were 12 greater when
compared to traditional plans
Preventive Care Visits CIGNA Choice Fund vs.
Traditional Plans
8
Preventive Care VisitsPer 1000 Members
0.6
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Medical Care Best Practice Compliance
CIGNA Choice Fund saw no statistical difference
on 94 of evidence based medicine compliance
measures when compared to traditional plans
Compliance Measure Comparison CIGNA Choice Fund
vs. Traditional Plans
302 measures of healthcare compliance were
assessed
95 confidence level
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Evidence-Based Medicine Examples
Results meet or exceed 95 confidence level
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2005 Average ERG Risk Scores
Overall positive selection for CIGNA Choice Fund
but similar in magnitude to existing HMO vs. PPO
risk selection
Within non-CCF, HMO population had a ERG 25
lower than the PPO
Selection is an expected occurrence with any
multi-option environment
-26 CCF vs. non-CCF
Episode Risk Groups (ERG) is an episode-based
risk adjustment methodology used to measure the
relative illness burden or health risk of a
population.
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Choice Fund ERG Scores by Group
Positive selection overall but considerable
variation by group.
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Member Cost Share CIGNA Choice Fund
Cost-shifting did not occur. The percentage share
of total costs paid by CIGNA Choice Fund members
declined or remained stable
Member Cost Share Percentage by Claim
Categories CIGNA Choice Fund
Total cost share declined from 27 to 16 with
the inclusion of account funding

• Excludes premiums
• Combined Medical Rx
• Unadjusted cost data includes all costs

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Average Member Cost Share Amounts
CIGNA Choice Fund average costs declined or
remained stable for all claim categories
Average Cost by Claim Category CIGNA Choice Fund
HRA
Premium contributions (not included) are
typically 10 to 20 lower for CDH plans
28
-68
-58
-56

• Excludes premiums
• Combined Medical Rx
• Adjusted using constant dollar values

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Conclusions

• CIGNA Choice Fund consumer-directed plans are
  effectively managing costs for both employers and
  consumers
• Total medical costs decreased
• Members are spending less out of pocket
• CIGNA Choice Fund members are not foregoing care,
  but appear to be making more cost-effective
  decisions
• Preventive care increased
• Changes in utilization occurred, particularly for
  preference-sensitive treatments
• Medication compliance for chronic conditions
  increased
• CIGNA Choice Fund members continued to receive
  recommended care according to evidence-based
  guidelines