Everybody’s been talking about contraception lately, and  I have a few questions. Is this debate about religious freedom?  Or is it about birth control being part of preventive care?  Or is the debate about some people’s desire to turn back the clock…to a time when people didn’t have sex outside of marriage?

Currently 28 states require insurers that cover prescription drugs to also provide coverage of FDA-approved contraceptive drugs and devices.

Arizona has had this requirement since 2002. But that won’t be the case for much longer, now that our Tea Party-controlled legislature is on the case. Quick as a button, our esteemed legislators have proposed a bill to allow employers to refuse coverage of contraceptives as part of their group health insurance for religious reasons.

Currently each state sets standards for what health insurance policies must cover.  For example, in 2010, only 12 states mandated coverage of maternity care in the individual insurance market, and 17 required it in the small-group market.

Arizona is one of the states where individual health insurance policies do not cover maternity, except for complications of pregnancy. And yet, young women are charged about $100 more per month than young men for the same policy.

In Arizona, if a woman without health insurance gets pregnant, she is uninsurable if she is trying to buy health insurance as an individual. That’s because her pregnancy is a pre-existing condition and she will be denied health insurance. Nationwide, 13% of women who become pregnant each year are not insured, which often results in inadequate prenatal care.

Federal law requires insurance coverage of contraceptives for federal employees and their dependents.

The health care reform law (the Affordable Care Act) provides a long list of services, including maternity coverage and contraceptives, that must be covered by all health insurance policies in all states.  Given that 99% of American women have used contraceptives, the panel of health care experts who came up with the list must have figured this was a settled issue. I guess they were wrong.

I hope the debate  continues through November because it puts a spotlight on women’s health, contraception, maternity coverage, and how bad the current health insurance system is for women. The more people talk about these things, the more they might realize the Affordable Care Act is a step in the right direction.

Growth in U.S. Health Spending Remains Slow in 2010

U.S. health care spending experienced historically low rates of growth in 2009 and 2010, according to the annual report of national health expenditures (NHE). The low rate of growth means Americans got less health care than in previous years. The report notes that U.S. health care spending grew only 3.9 percent in 2010, reaching $2.6 trillion or $8,402 per person, just 0.1 percentage point faster than in 2009.

Should the Affordable Care Act (Obamacare) get credit for this slow growth?  Or is it that Americans, so many of them with lousy health insurance with high deductibles – or no health insurance – are afraid to go to the doctor? Nobody knows the answer to this question, but the slowing growth of health care expenditures is a good thing for government budgets and employer-based health insurance premiums.

Marilyn Tavenner, acting CMS administrator thinks the actions of the Obama administration should get some credit. “We have worked hard since the passage of the Affordable Care Act in 2010 to lower health care cost growth,” said  “We believe that the tools in health reform will help keep health care cost growth low while improving the value of care for consumers.”

Findings from the report include:

• Household health care spending equaled $725.5 billion in 2010 and represented 28 percent of total health spending, slightly lower than its 29 percent share in 2007.
• Growth in total private health insurance premiums slowed in 2010 to 2.4 percent from 2.6 percent in 2009, continuing a slowdown that began in 2003.

• Retail prescription drug spending (10 percent of total health care spending) grew only 1.2 percent to $259.1 billion in 2010, a substantial slowdown from 5.1-percent growth in 2009 and the slowest rate of growth for prescription drug spending recorded in the NHE.

• The federal government financed 29 percent of the nation’s health care spending in 2010, an increase of six percentage points from its share in 2007 of 23 percent, and reached $742.7 billion. Part of that increase came from enhanced Federal matching funds for State Medicaid programs under the American Recovery & Reinvestment Act which expired in 2011.  Medicare spending grew 5.0 percent in 2010, a deceleration from growth of 7.0 percent in 2009.

• Medicaid spending increased 7.2 percent in 2010, slowing from 8.9-percent growth in 2009.

• The state and local government share of total health spending declined from 18 percent in 2007 to 16 percent in 2010 and totaled $421.1 billion, in part due to the temporary assistance in the Recovery Act.

• Hospital spending, which accounted for roughly 30 percent of total health care spending, grew 4.9 percent to $814.0 billion in 2010, compared to growth of 6.4 percent in 2009.

• Private businesses financed $534.5 billion, or 21 percent of total health spending in 2010, down from a 23-percent share in 2007.

Information in this report can be accessed at the following web location:

http://www.cms.gov/NationalHealthExpendData/02_NationalHealthAccountsHistorical.asp#TopOfPage

Accountable Care Organizations (ACO) will change the way medical services are paid for by Medicare, and they could possibly deliver savings of 40% from the existing fee-for-service Medicare payment system.  One blog I read called ACOs  ‘unicorns’ because “every one knows what they look like but no one has seen one”.

Wikipedia information on accountable care organizations (ACO) includes the following:

..a type of payment and delivery reform model that seeks to tie provider reimbursements to quality metrics and reductions in the total cost of care for an assigned population of patients. A group of coordinated health care providers form an ACO, which then provides care to a group of patients…

While the ACO model is designed to be flexible, Dr. Mark McClellan, Dr. Elliott Fisher and others defined three core principles for all ACOs: 1) Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients; 2) Payments linked to quality improvements that also reduce overall costs; and, 3) Reliable and progressively more sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through improvements in care.

…Kaiser Permanente and HealthCare Partners Medical Group are two notable examples of successful ACOs.

According to an article in Business Week:

Aetna (AET) estimates that ACOs could deliver savings of 40 percent compared with the existing fee-for-service system. The Hartford-based health insurer has spent $2 billion to become a leading player in the field. “Accountable care is one of those models we see as the future of the company,” says Dr. Charles Saunders, Aetna’s head of strategic diversification. UnitedHealth Group (UNH) has also been snapping up technology and care management companies, inking six deals in the last 18 months. Essence Group Holdings, a Maryland Heights (Mo.) company that administers a private version of a Medicare plan, estimates that setting up ACOs will be an $80 billion business. Essence, which works with Rice’s practice and others, plans to double or triple its 400-person staff over the next year to keep up with demand, says spokesman Andrew Shea.

The current Medicare payment system, where every service, test, or even a consultation, generates a separate bill, is the root problem for Medicare.  Years ago, people would get two tests to check on a heart problem. Now there are dozens of tests, and some of them are very expensive. More and more tests (some of them unnecessary) cause Medicare’s expenditures per Medicare beneficiary to climb each year. If a new way of doing business could slash Medicare’s expenses by 40%, this could put the program on a more sustainable path.

The Affordable Care Act calls for ACOs to lead the way in changing the way Medicare pays for care. Of course, there is political posturing over ACOs (Democrats are for and Republicans are against), and getting into this business could be a big risk for insurance companies, hospitals, and doctor groups. What if the Affordable Care Act is repealed? Then what happens to all the work that has gone into ACOs? Politicians should just agree that this fix to Medicare is necessary, and get on board. Medicare needs to get its financial house in order sooner rather than later, but there always seems to be one objection after another that maintains the status quo. It’s time for a change in the way Medicare pays seniors’ health care bills.  It looks like Accountable Care Organizations could be the answer.