Interuterine devices (IUDs) are now one of the two recommended forms of birth control for teenagers. This is good news on multiple fronts as IUDs are extremely reliable, relatively inexpensive, and the woman controls her reproductive choices. She does not need to worry about how long that condom had been in that wallet, whether or not he will actually pull out when he promised that he would, if she took a pill that morning or forgot or anything else. Once inserted, IUDs are effective and forgetable.
Teen girls who have sex should use IUDs or hormonal implants — long-acting birth control methods that are effective, safe and easy to use, the nation’s most influential pediatricians’ group recommends….
IUDs and hormonal implants cost more, usually hundreds of dollars, because inserting them involves a medical procedure typically done in doctors’ offices. But they’re less expensive in the long run than over-the-counter condoms or prescription birth control pills, said Dr. Mary Ott, an adolescent medicine specialist and associate pediatrics professor at Indiana University. She is the policy statement’s lead author,
Teens have to remember to use pills and condoms consistently. By contrast, IUDs typically work for three to 10 years after insertion, while implants typically last three years…..
This is excellent news, and it is illustrative of some of the problems with incentives that PPACA is working to fix.
IUDs had been a relatively rare choice of long term birth control for all women, and even rarer for teenagers pre-PPACA. Some of that was technology, some of that was fear of the Dakon Shield, but most of the avoidance was due to cost. A month of hormonal birth control could cost the individual $10 to $75 depending on their insurance, their access to a clinic and their brand. An IUD could set a woman back two years of birth control payments all at once. I remember being a teenager, and at times scraping together twenty bucks to put gas in the car and chippingg in on the twelve pack and pizza was a weekly struggle. I had it easy compared to a lot of people, but I could not readily come up with $500 or $1,000.
From a pure cost perspective, IUDs have a pay-off of birth control utilization after two to three years. Any birth control effects after thirty-six months are “free” compared to the next best alternative of paying for contraceptive pills. In most business cases, a project with a pay-off period of three years is a no brainer to implement, especially if the benefits continue to accumulate for several more years. If the project has a higher success rate (and IUDs beat perfectly used birth control pill prevention rates, and easily destroys typical usage patterns of the Pill pregnancy prevention rates) and pays off in three years, it should be quickly implemented. That was not the pre-PPACA case.
The problem is churn and benefit capture. The insurance company that paid for the IUD seldom accumulated the benefits of both lower prescription costs and fewer incremental unplanned pregnancies.
There are four policy options to address this problem of great social benefit where the payer could not recapture costs. The first was to do nothing and allow for continued market failure as there is no market for IUD loans or pregnancy prevention policies to transfer gains back to the insurers. This is a good example of the problem of expecting side payments to make everything right as the coordination problem is massive.
The second is to create insurance policies with two, three, four or five year lock-in periods. The Manhattan Insitute proposed two year insurance policies which would change some of the short term calculations to medium term financial calculations. I think in a non-PPACA counter-factual world, such as a change would lead to higher IUD utilization through lower cost sharing, but it would not be extensive. Due to non-birth control reasons, I am not sure how much many insurers would be excited to offer multi-year policies to non-underwritten communities, but this could work.
The third choice is what PPACA did, and that is require that all insurers pay for IUDs for all women. This means that there is no disadvantage for Mayhew Insurance to pay for Jane’s IUD even if she changes insurers at the next open enrollment as Mayhew Insurance could pick up Betty from Big Blue where Betty has a Big Blue IUD. PPACA removed the stable negative outcome equilibrium of insurers not wanting to pay for high value care because they could not capture sufficient benefits.
The fourth choice is to build a single payer system that can take into account both medical and social costs of decisions. Illinois Medicaid is rearranging their reimbursement and approval practices to make IUDs more available so that they can capture both medical and social benefits. The goal here is to reduce costs and reduce unplanned pregnancies:
The Illinois Medicaid payment system has discouraged doctors from offering the most effective forms of birth control, said Dr. Melissa Gilliam, chief of family planning and contraceptive research at University of Chicago Medicine. She’s been working with state officials to change the policy.
Under the new plan, the state would double the reimbursement rate for inserting IUDs and performing vasectomies. Doctors would be able to charge for two services on the same day when a woman’s medical appointment included a procedure to insert an IUD….As a researcher, Gilliam has studied the complicated lives of teenage mothers. As a doctor, she has delivered babies for many teenagers who already have other children at home…
The average cost to Medicaid per birth – for prenatal care, delivery and the baby’s first year of life – totaled $18,500 in 2012, the most recent year for which figures were available. Babies with very low birth weights, needing neonatal intensive care, cost even more: an average of about $302,000 per birth….
Illinois figures that IUDs will enable young women to have more control over their sexual health and their childbearing choices. Illinois calculates that IUDs will lead to lower prescription costs, lower birthing costs due to both the incremental decreaes in the number of completely unplanned pregancies from women who otherwise would have been on the daily Pill and had a failure and fewer pregnancies overall as IUDs are strong committment mechanisms to birth control. The side gains are on the social welfare side as women who can delay childbearing to times of their choosing tend to be better off themselves and their kids are better off. Illinois will see more medical cost avoidance gains under PPACA as they expanded Medicaid to cover a much broader population, so a woman is far more likely now to be in Illinois Medicaid for a long, continuous span of coverage than when income and asset restrictions were tighter.