One of the biggest opportunities for reducing healthcare costs is improving the quality of maternity care. For most businesses, childbirth and newborn care is the largest or second largest (after heart care) category of hospital expenditures, and it's by far the largest category of hospital expenditures for state Medicaid programs, so even small improvements can result in large savings.
The place to start is with the most common hospital procedure in America - the Cesarean section. A C-Section is a surgical delivery of a baby, rather than a normal, vaginal delivery. Not only does a C-section typically cost significantly more than a vaginal delivery, it is more likely to result in infections, injuries, and other complications for both mothers and babies. Yet today, nearly one-third of all babies in the country are delivered by C-Section. Fifteen years ago, only 20% of babies were delivered by C-Section, and in the 1960s, the C-Section rate was under 5%.
The Cost of Having a Baby shows that the high proportion of babies delivered by Cesarean section costs commercial insurance plans and state/federal Medicaid programs thousands of dollars more per birth than vaginal births and the differences in costs is growing over time. The report also shows there is significant variation in costs within and aross states for each type of birth, indicating that there are additional opportunities for savings.
A major reason that the rate of C-Sections is high and growing is not because they're necessary, but because they're convenient. Babies often take longer to arrive than their mothers or doctors might like, and C-Sections often are used to shorten labor or to make babies adapt to the busy schedules that their mothers and doctors have. Yet that temporary convenience can harm both babies and mothers, sometimes permanently.
C-Sections are particularly problematic when they're used to deliver babies too early. The desire for convenience has resulted in a growing number of cases where doctors use drugs or procedures to induce labor rather than let the pregnancy take its natural course. About one-fourth of deliveries are now electively induced before the baby has reached full term (39 weeks). Yet research has shown that even babies born a few days too early are more likely to have problems such as developmental delays. Moreover, labor inductions before 39 weeks are more likely to result in expensive and risky C-Sections, and the baby is more likely to spend time in an expensive neonatal intensive care unit (NICU).
These unfortunate trends can be reversed. For example, a team of physicians and nurses at Pittsburgh's Magee Womens Hospital, using "Perfecting Patient Care" training they received from the Pittsburgh Regional Health Initiative, reduced the rate of early elective inductions by 64% and reduced the frequency of C-Sections in elective inductions by 60%. They won the Fine Award from the Jewish Healthcare Foundation in recognition of their cutting-edge work.
There are additional opportunities for even greater savings in maternity care. For example:
A major contributor to all of these problems is the way health plans and Medicaid typically pay for maternity care. Hospitals are paid more for C-Sections than for vaginal deliveries, creating an incentive to do more C-Sections, and doctors are often paid similar amounts for both types of delivery, even though vaginal deliveries typically take longer and occur at inconvenient times. Doctors and hospitals make more money when mothers and babies have complications or when babies spend time in NICUs, rather than being rewarded for achieving better outcomes and reducing costs. An explanation of the problems caused by current payment systems and the types of maternity care payment reforms that would solve them are described in a detailed presentation available from CHQPR.
Some health plans and hospitals are changing this; for example, the Geisinger Health Plan in Central Pennsylvania pays for maternity care based on outcomes, and the Geisinger Health System has significantly reduced C-Sections and improved the quality of maternity care as a result. More health plans should begin paying for maternity care in ways that enable physicians to deliver higher quality, lower cost care. They would not only save money, but help their communities have healthier babies and mothers as a result.
The most comprehensive information about opportunities to improve maternity care is available at Childbirth Connection's Transforming Maternity Care website.