* Cigna Healthcare became even larger last April, when it completed its $1.5 billion purchase of Greenwood Village-based Great-West.

Great-West helped Cigna expand into the small and midsize employer market primarily in the West.

As president and general manager of Cigna Healthcare's Mountain States division, Daryl Edmonds oversees one of the region's largest health insurance providers.

Edmonds and regional Vice President Marc Neely, previously Great-West's national vice president of sales, recently sat down with Rocky Mountain News staff writer Joyzelle Davis to discuss how the merger is going and what Cigna expects on the national health care reform front from the Obama administration.

1. How is the integration of Great-West going, particularly the issue of bringing the physician networks and related billing systems on board?

Edmonds: One of the conditions of the acquisition was that we would meet with a physician advisory committee on an every-other-month basis. We started those meetings in May and I think it's gone well - we have representatives from the Colorado Medical Society, the Medical Group Management Association, the Division of Insurance and Cigna. At each meeting, we've been going through what's going on and keeping them apprised of our progress. The feedback that we've received is that there haven't been any surprises so far. It's a slow process. We're starting first with trying to integrate contracts with the larger providers - i.e. hospitals - and in 2009 we'll be addressing that with physicians.

2. At the time of the announced merger, Cigna said it didn't anticipate any staff reductions. Did that turn out to be the case?

Edmonds: I don't know the exact number, but the percentage of Great-West employees we have retained has been in the high 90s. Sure, there were some attritions, people who have chosen to leave. . . . But it has worked out extremely well.

Neely: If you go back to the basic premise of the acquisition, it was that Great-West was going to bring a platform for growth into new markets for Cigna. So the redundancies were marginal. That was one of our commitments: This entity was a critical part of the acquisition, and we wanted to retain our people and retain our customers.

Our customer retention rate is going to be a little north of 90 percent - which is a very, very good number under any condition.

3. In spite of Colorado's low rate of obesity, surveys show that the cost of health insurance for employers and individuals is higher here than the nationwide average. Why is that?

Edmonds: My opinion is there is no one single issue that is going to drive our rates in Colorado higher than the national average. There are a number of factors, not in order, that I'll just rattle off:

One is that we have seen a proliferation of free-standing radiology centers with CTs and MRIs, and the ordering of CT scans and MRIs over the past five years has probably increased by 20 percent.

Secondly, hospital systems have joined together, and they're able to negotiate higher reimbursements. When you take a look at the level of uninsured, there's going to be cost shifting - understandably - from physicians and hospitals.

Additionally, when you take a look at pharmacy expenses, it used to be 8 to 10 percent of the premium dollar. Now it's pushing 16 to 18 percent of the premium dollar. I also sit on the board of the March of Dimes. In any given year, Colorado is probably among the bottom five states in the country for births that are full term. Premature births can be very, very expensive. It's not uncommon to see expenses of $500,000 to $1 million when a baby is born at 28 weeks.

4. President-elect Barack Obama has made clear that health care reform is one of his top priorities. What forms do you anticipate that will take, and how is Cigna preparing?

Edmonds: We want to be part of the conversation on how health care is going to be shaped for the country. To that point, we have our CEO of the corporation actively involved in those discussions.

We continue to believe there is going to be an employer-funded segment, and that's not going away. One of the first areas that (Health and Human Services Secretary nominee) Tom Daschle is going to be looking at is how to expand the (Children's Health Insurance Program). When you take a look at the 45 to 46 million uninsured across the country, a third of that could be solved by getting children enrolled in the CHIP program. The ironic thing in Colorado is that there are so many children eligible for the CHIP program who just aren't enrolled. So it's not that we need an expansion, necessarily, of CHIP. It's just a matter of getting the children who are eligible enrolled.

I think when you take a look at what's going to happen with Medicaid or Medicare, will there be an expansion of those programs? It's likely. I think Medicare could expand from age 62 to 55.

Those are some of the things . . . being considered. The ingredients are being placed on the table, but the sausage hasn't yet been made.