BGCOLOR="WHITE">
Filed by Anthem, Inc.
(Commission File No. 001-16751) pursuant
to Rule 425 under the Securities Act of
1933 and deemed filed pursuant to
Rule 14a-12 under the Securities Exchange
Act of 1934
Subject Company: Cigna Corporation
Commission File No. 001-08323
Prepared Statement of
Joseph Swedish, President & CEO, Anthem, Inc.
Before the
United States House of Representatives Judiciary Committee
Subcommittee on Regulatory Reform, Commercial and Antitrust
Law
On
September 29, 2015
Thank you, Chairman Marino, Ranking Member Farenthold, and
members of the Subcommittee, for the opportunity to testify today.
I am Joseph Swedish, President and CEO of Anthem, Inc., and it is
my honor to appear before you today to provide an overview of the
highly complementary nature of the proposed Anthem-Cigna
combination and the value that would result for individual
consumers, employers, providers and our health care system. The
goal of this transaction is to provide a better product to these
stakeholders in our ever-changing, increasingly competitive health
care market a product that promotes affordability, increases
accessibility, and enhances quality by focusing on innovation and
collaboration.
Since joining Anthem in March of 2013, I have witnessed the
continued transformation of our health care system. Having spent
more than 40 years of my professional life in health care
leadership the majority of those years serving as a hospital
administrator and CEO for several major hospital systems, including
Trinity Health, a faith-based health system I am excited and
hopeful about the future of health care.
Health care in our country is rapidly evolving, driven by the
needs of consumers, who demand change from all sectors providers
and payers. Neither payers nor providers alone can bring about the
change necessary to close the gap between consumer expectations and
the outcomes that the health care system has historically
delivered. Nor can this change be achieved by Anthem or Cigna
alone. No longer is it enough for health insurers to serve as
financial stewards in the health care delivery transaction; we must
now assist consumers as they interact with the health care system,
not just in choosing the health care options that best meet their
needs, but also in helping them decide how and where to access
care. Likewise, we must go beyond paying claims, instead partnering
with providers by offering human and financial resource support,
actionable data analytics, and tools that further their efforts to
focus on the health of their patients, while shifting from volume-
to value-based payments. And above all, we must help all
stakeholders providers, consumers, employers and brokers change
from a system that has historically focused on sick care to one
that promotes optimal health. Anthem has taken this need for change
head on by focusing on three strategic areas, which are the pillars
of our proposed acquisition of Cigna: 1) a better consumer
experience; 2) cost containment to improve affordability; and, 3)
strong collaboration with providers.
My testimony today will focus on the following areas:
Value of an Anthem-Cigna Combination to Consumers
The combination of Anthem and Cigna will bring together the
complementary platforms of both companies in a way that will
uniquely benefit consumers. For instance, Anthem recently opened
its new Innovation Studio in Atlanta, GA with the goal of
accelerating the pace of R&D and creating the tools, solutions
and capabilities that will improve the experience of our consumer
and provider partners. Through this program, we were able to launch
our first pilot last month, a two-minute Welcome SmartVideo to new
and renewing individual plan members in California. Anthem also
brings an extensive network of providers, leading care coordination
programs in Medicare Advantage and Medicaid, 24/7 access to
licensed providers via telehealth, and more than 75 years of
experience in commercial insurance. Cigna through its Go Deep, Go
Global, Go Individual strategy brings its own distinctive
strengths, including: consumer-centric technology platforms, highly
regarded wellness programs, substantial expertise in the
international market, and leading specialty capabilities like
dental, vision, behavioral, and life and disability coverage.
Consumer engagement and data transparency
As health care evolves, consumers are demanding more information
from a variety of trusted resources in order to make more informed
decisions. When making health care decisions, many consumers look
to their health plans, as they are the only entity with visibility
across the entire health care system. We know that consumers want
more transparency when it comes to their expected costs and the
quality of health care provided by their doctors and hospitals.
More importantly, we have seen that making this information
available to consumers and providers leads to better outcomes and
cost savings to the health care system. Anthem is responsive to
consumer demands for transparency, which is why the company
launched Anthem Care Comparison nearly a decade ago to provide
consumers with price, patient experience and quality ratings for
common, non-emergency medical services ranging from tonsillectomies
to knee replacements, with the aim of empowering consumers to seek
out the highest quality medical care in the most cost-effective
setting. Anthem Care Comparison now includes approximately 400
medical procedures and services.
Anthem is also partnering with third party transparency vendors
like Castlight Health and Health Care Blue Book to make sure
consumers have clearer line-of-sight into the price variations that
exist, oftentimes within the same geography or network. To
encourage greater cost and quality competition among providers, and
to help consumers make better informed decisions about where to
seek health care services, we implemented a reference-based pricing
program in partnership with CalPERS, the California Public Employee
Retiree System. In coordination with CalPERS, we took on the
problem of significant price variation across California providers
for knee and hip replacements by utilizing reference-based pricing.
By educating and incentivizing consumers and providers through
price transparency, CalPERS experienced a 20 percent increase in
patients who chose more affordable, high quality providers for
these procedures, and at the same time, saw 20 percent of providers
lower their prices.
Cigna, through the belief that consumers should be supported
with the right tools to help them make value-based health care
decisions, offers members myCigna cost and quality transparency
tools. The myCigna portal is widely recognized as an industry
leader, providing personalized cost estimates for 1,100 medical and
dental procedures and real time pricing for medications at 60,000
pharmacies nationwide. In the last 12 months there were
approximately 24 million customer visits to myCigna, with an
additional 4 million visits to the mobile app. A primary
destination for consumers is to find a local, quality and cost
efficient doctor or facility; roughly a third of consumers visiting
myCigna utilize the technology to identify pricing for procedures
such as a colonoscopy, MRI or mammogram. Cignas focus on wellness
and consumer-centric technologies will only serve to enhance health
coverage offerings when combined with Anthems.
Improving quality and affordability
Consumers also want better value in the form of higher quality
and lower costs for their health care. To that end, Anthem and
Cigna are investing in several initiatives that focus on improving
the value of health care for consumers, evolving beyond the
traditional insurer role as a payer of claims to a personal health
care coordinator for consumers. For example:
The combined reach of Anthem and Cigna would go even further by
providing these kinds of programs and expanding access to care and
choice for consumers through a more extensive network of hospitals,
physicians, service providers, and health care professionals,
including a combined network of more than 1,600 Centers of
Excellence proven to produce higher quality and lower costs in a
number of surgical areas, such as cardiology, orthopedics,
oncology, and obstetrics.
Together, Anthem and Cigna would also be able to leverage
complementary expertise in serving Medicare beneficiaries with
chronic conditions. For example:
Provider collaboration and value-based reimbursement
Among the challenges impeding the needed change to our health
care system is an antiquated fee-for-service payment system that
rewards volume over quality while restricting provider
collaboration. This challenge is equally recognized, and is being
prioritized, by health insurers, providers, the Administration, and
Congress.
In January 2015, the U.S. Department of Health and Human
Services announced (during an event attended by Anthems chief
medical officer, Dr. Samuel Nussbaum) a historic timeline for
shifting 50 percent of Medicare payments from fee-for-service to
quality- and value-based through the adoption of alternative
payment models by 2018. In addition, Congress, through passage of
the Medicare and CHIP Reauthorization Act of 2015 earlier this
year, reformed Medicare physician payment by setting a course
for consolidating quality reporting requirements and creating a
new reimbursement structure for physicians based on medical
outcomes, instead of the volume of services provided in the
previous SGR methodology.
Anthem and Cigna are also committed to aligning incentives to
encourage smarter, collaborative decision-making that fosters
healthier outcomes and a better patient experience. More than $50
billion (53 percent) of Anthems total health care reimbursement is
tied to value-based contracts, with 150 accountable care
organizations (ACOs), 787 hospitals, and 106,000 network
physicians. In fact, through our new Enhanced Personal Health Care
arrangement with participating providers where the emphasis is on
value-based payments rewarding high quality and efficiency, the
exchange of clinical information, and a mutually-shared commitment
to patient-centered care Anthem is able to serve 4 million of our
members. This focus has allowed us to get more care provided under
the value-based umbrella a number that will only grow as a result
of the proposed deal, having a more immediate impact on our ability
to bring down the total cost of care. Anthem also has a
first-in-the-nation partnership with seven of the top 30 competing
hospital systems in Los Angeles and Orange County, that enabled us
to launch Vivity, an integrated health system that moves away from
traditional fee-for-service and towards a structure that
financially rewards activities that keep patients healthy, both
simplifying access and making costs more predictable.
Meanwhile, eighty percent of Cigna-HealthSprings Medicare
Advantage membership is tied to value-based reimbursement. In
addition, more than 35 percent of Cignas total commercial health
care reimbursement is being tied to value-based contracts,
primarily through its aforementioned Cigna Collaborative Care (CCC)
initiative, which includes arrangements with 134 large physician
group practices, more than 30 specialty groups, and over 80
additional arrangements covering more than 240 individual
hospitals. CCC works to bridge the gaps in information and care by
creating a model that rewards for quality outcomes and gives health
care professionals the information and the support they need to
achieve those outcomes. And the results speak for themselves:
By integrating the complementary expertise of the two companies,
the combined organization would operate more efficiently, reduce
overall operational costs, and enhance our ability to manage the
cost drivers that negatively impact affordability for
consumers.
Complementary Nature of the Proposed Deal
As the health care system continues to change, insurers must
change along with it. From delivery to payment to how and where
consumers interact with their care, the health care landscape has
undergone a dramatic shift one that will only continue as we move
further down the road towards a more fully integrated, value-based
health care system.
The health insurance industry has adapted along with this change
and will continue to reshape the role it plays in consumers
lives...
More