Employees are better managing their usage of healthcare benefits when involved in the decision making process and spending their own funds, a new two-year study of 430,000 CIGNA accounts indicates.
At the same time, the study indicated that participants did not cut back on drug usage or preventative care when they swithced to plans that required them better manage how they spent their healthcare benefits.
This is good news for employees and employers as second year costs for coverage are less due to reduced claims and usage.
The massive CIGNA insurance study confirms trends spotted by Information Strategies, Inc. and other experts over the past three years as the number of Health Savings Accounts (HSAs) and Health Reimbursement Accounts (HRAs) have proliferated.
These are two of the three major components of Consumer Directed Healthcare (CDH).
The new two-year 2007 CIGNA Choice Fund Experience Study reports that usage and costs of CDH accounts is cut in half for the same benefits. Member out-of-pocket costs show similar declines in the second year, the study shows
- 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 the study
- CDH medical cost trends are 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 HRA cost share percentage (% of member paid costs) was similar to traditional plans while second year CDH member cost share percentages were 4% less for both HRA and Health Savings Account (HSA) members.
- 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.
Experts point out that 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.
The study is another indication, these same experts predict, that CDH accounts will be a major factor in employer-sponsored programs as 2008 plans are implemented.