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Medical Maze

Top Five Questions About Health Care Reform—Answered

Jimmy Magahern | Oct 3, 2012, 9:47 a.m.

Plese points to the electronic record keeping systems that were implemented throughout hospitals and health care centers during the first phase of the reforms.

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Under a new pilot program Phoenix’s St. Joseph’s Hospital and Medical Center has already tracked a reduction in inpatient costs of about 19 percent and ER costs of around 12 percent.

“It’s also a complete revision of the insurance system as well,” she adds. “It’s so intricately connected, that to be able to de-couple it and unravel all that right now would be nearly impossible.”

Further, hospital administrators are enjoying the upgrades. Arizona has received more than $30 million in grants to improve health information technology and facilitate more efficient exchanges between hospitals, private physicians and insurers, and some providers are already seeing savings.

“We are innovating and finding new ways to deliver health care at lower cost,” says Suzanne Pfister, vice president of external affairs at St. Joseph’s Hospital, which, under its ACA pilot program, has already tracked a reduction in inpatient costs of about 19 percent and ER costs of around 12 percent.

“It’s an important effort, and something we’re very committed to.”

Bill Harris, chief operating officer of the Medisun Advantage Plan at Banner Healthcare (recently absorbed by Blue Cross Blue Shield of Arizona Advantage), says most of the larger health care deliverers are already deeply entrenched in the new system.

“An organization like Banner has invested millions of dollars in these new care models, and regardless of what may happen politically in Washington, I don’t see this path changing a lot,” he says. “What could change is how it’s financed. But the actual model, I think, we’re all working very hard to make sustainable.”

2 Will my premiums go up, and my choice of doctors go down?

“The act greatly expands access to health insurance, which is clearly a good thing,” said ASU economist and health care expert Marjorie Baldwin in a recent online chat hosted by the Arizona Republic. “But when people have health insurance coverage, they consume more health care services, which will drive up the costs of health care, and health insurance, for everyone.”

Fortunately, much of the increase in costs to provide more services to the sick is expected to be subsidized by the significant increase in already healthy enrollees in the 18-to-29 age group that will be brought into the system under the ACA. And providers will have to be more transparent, so that rate increases will only pass if insurers can demonstrate that 80 to 85 percent of their revenues will go to improving the quality of the health services provided, with administrative costs and profits limited to 15 to 20 percent. If they can’t show that, patients get a rebate. Already this summer, close to a quarter million Arizona families with private insurance received an average of $118 in rebates from insurance companies due to this provision. Opponents predict such penalties to providers will inevitably drive up costs, but proponents say the restrictions will effectively lower annual premiums by nearly $2,000 per family by the year 2019.

Additionally, the ACA emphasizes more preventive care and wellness options, like free cancer screenings, vaccinations and annual wellness visits, to help people get their health conditions under control without going to the ER, which can cost five to 10 times more than primary physician care.

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