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Web Tools Help Cigna Tackle Ballooning Health Care Costs

Rising health care costs are a conundrum for the Western world. Attempts to manage costs have been compared with squeezing a balloon -- you may constrain costs on one end, only to have the other end inflate. The solution Cigna is seeking is to take costs out of the health care system -- without compromising care.

A critical area where this can be accomplished is in taming pharmacy costs. One step has been for health plan sponsors (employers) to shift some their pharmacy costs to employees -- but that's a classic example of the balloon-squeezing approach -- that really doesn't take costs out of the system.

Our solution is to make pharmacy costs utterly transparent: enabling people to make informed choices between pharmacies, drug brands, generics, and treatment alternatives.

Our first attempt took place about five years ago, when we provided individuals with "national average pricing" for brand name and generic prescription medications. Cigna was the first to offer this entry-level pricing transparency, which is now a standard offering among health and pharmacy plan managers.

This was a positive first step. Better than nothing, but not by that much. Why? Because "national averages" don't capture the real price of a medication to either the employer or employee. Prices will vary greatly depending on the pharmacy plan, the pharmacy benefits manager's negotiated prices, and among pharmacies.

To be effective, we would have to incorporate online pricing information for literally tens of thousands of pharmacies and medications and then drive this information to millions of individuals in a way that is relevant, usable, and accurate.

In late 2007 we upgraded the Cigna Pharmacy Price Quote tool to provide real-time cost comparisons of medications at 57,000 pharmacies nationwide. The cost comparisons showed the actual cost to the individual according to his/her pharmacy benefit plan, and provided side-by-side comparisons with generic equivalents. The site also tabulates the buyer's cost savings among pharmacies and between drug brands and generics.

As a result, the Price Quote tool is helping improve both compliance and cost for literally hundreds of thousands of Cigna Pharmacy plan participants.

Aaron Crossen is Cigna Pharmacy's IT senior director. Let him know below what you think of Cigna's effort to cut pharmacy costs.

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