With the House's recent vote to repeal the health reform law, the financial burden of healthcare remains in the spotlight. Even though data from Standard & Poor's shows the growth rate for healthcare costs has slowed significantly, the expenses continue to climb year after year. So, what are insurers doing to make healthcare more affordable in the new reform environment?
CIGNA's Vice President of Product Development Wendy Sherry shared some insights with FierceHealthPayer on her company's efforts to rein in healthcare costs, while maintaining the relationship between insurers, providers and customers.
FHP: As healthcare costs in the U.S. continue to rise, what do you consider the most promising areas for cost savings?
Sherry: I would start with health, wellness and prevention: Identifying health risks early on and engaging in programs that mitigate future health issues, such as smoking cessation, weight management, stress reduction and preventive care.
Second, engagement with programs to help manage chronic conditions like health coaching, case management and disease management programs.
Third, identification and utilization of high quality, cost efficient physicians and hospitals: Physician and hospitals that deliver care in a quality and more efficient manner as measured by lower costs and better health outcomes like reduced hospital readmissions.
Fourth, consumer engagement: Provide incentives for individuals to do health risk assessments, biometrics or participate in health and wellness programs. Insurers can also design programs that encourage individuals to shop for cost-efficient care and supply transparency tools to enable smart choices such as generic vs. brand name drugs and selecting appropriate levels of care.
Last year, our annual study of CIGNA health plan customer claims experience found that when individuals engage in these health-smart behaviors and choices, their total medical costs went down 15 percent--an average $358 per person in the first year--with cost savings totaling 26 percent over five years.
FHP: How do you think the technology-related aspects of health reform will impact payer costs?
Sherry: Technology improvements will play a significant role in helping to streamline costs and improve company-wide efficiency. We are making better use of technology to improve customer engagement and reduce costs while improving our service delivery and investing in programs key to our future effectiveness. These investments include systems to better identify health risks, better manage individuals' health and foster engagement.
Other technologies already in place that help reduce costs include our eVisits and myConsult. We have offered eVisits for several years now, which enables our customers to conduct an "office visit" with their physician through a secure website at reduced cost. The myConsult program allows individuals with serious illnesses to receive a second opinion from national specialists.
FHP: Looking back on CIGNA in 2010, which costs rose and which fell?
Sherry: CIGNA Choice Fund CDH plans reduced costs without compromising care. We recently issued the results of our five-year CIGNA Choice Fund study of nearly one million customers, which compared those individuals in incentive-based Choice Fund programs to traditional HMO or PPO programs.
Our study shows Choice Fund participants are more likely to use our preventive care coverage, complete a disease management program, switch from brand name medications to generics, and elect to use an urgent care facility, their doctor's office or convenience clinic rather than take a trip to the emergency room unnecessarily.
The specific results are powerful. Choice Fund customers experience 15 percent lower costs in the first year and 26 percent savings by the fifth year, without sacrificing care or shifting costs.
FHP: What are the two most effective actions your organization has taken to improve your relationship with providers?
Sherry: Being a partner of choice for healthcare professionals is a strategic imperative of CIGNA's. We've had our share of success, including being the industry leader in lowest claim denial rates and highest in having claims approved in the first pass.
But we're not content to sit on our laurels as two recent initiatives demonstrate. First, we launched the CIGNA Cost of Care Estimator tool that assists healthcare professionals in reducing patient bad debt and improving their revenue cycle. Second, we opened up our call centers 24/7/365 to service calls for both customers and healthcare professionals.
The Estimator provides real-time pre-care and point-of-care itemized cost estimates for medical treatments, including an explanation of estimate the physician can share with their patient detailing the total cost, how the covered individual's benefits are applied, the anticipated payment from an individual's health account, and any out-of-pocket costs for which the individual is responsible. This can serve as the basis of pre-care financial discussions to help avoid after-the-fact financial surprises, as well as help prevent potential point-of-care over-billing.
Looking ahead we are further strengthening partnerships with physicians, hospitals and their patients through accountable care organizations. Today, we have more than 120,000 individuals and more than 1,000 physicians in ACOs spanning 11 states. Recent results from one of our pilot programs are encouraging and show gaps in care, which account for more than half of the errors and complications in medical care in the U.S., are 10 percent better for those individuals who are part of an ACO.
FHP: What is the single most effective action your organization has taken to retain members?
Sherry: That would be our commitment to improve the health of our customers, which helps keep healthcare affordable. As I've described with our Choice Fund experience, individuals are able to reduce their healthcare expenses without sacrificing care.
A significant portion of those savings come from participating in health improvement programs such as health coaching and disease management programs. Choice Fund customers are up to 19 percent more likely to participate in a health coaching program compared to those enrolled in a traditional plan. Individuals with chronic illnesses covered by our Choice Fund plans are 21 percent more likely to participate in their plan's disease management program.
As a result of our commitment, year-over-year enrollment in Choice Fund continues to increase--from 1.07 million customers at Sept. 30, 2009, to 1.36 million at Sept. 30, 2010. This growth comes from both employer clients buying these plans and employees "voting with their feet" during enrollment and electing these plans to improve their health and reduce their healthcare costs.
This interview was condensed and edited.