Mamas on Bedrest: $5 Billion on Moms and Babies!

January 9th, 2013

$5 Billion dollars.  Yes that’s Billion with a “B”.  That is the amount of money that the United States could potentially save annually on medical costs related to maternity care according to  The Cost of Having a Baby in the United States, new study published by Childbirth Connection, Catalyst Payment Reform and Center for Healthcare Quality and Payment Reform. The study was prepared by Truven Health Analytics and released January 7, 2013.

It’s no secret that the US healthcare system is in deep trouble and if it continues in its current iteration, it could very well bankrupt the entire country in the not too distant future. With the passage of the Affordable Care Act, the federal government made an attempt at reducing costs while at the same time making health insurance more available to more Americans. But it is safe to say that no one thinks that the ACA in its current form will be the answer to all that ails our flailing healthcare system. In an attempt to see where there are potential cost savings, several different agencies (public, private and non-profit) have undertaken studies to evaluate the type and quality of care provided in the United States in different health care arenas. In this study, maternity costs were analyzed in an effort to determine where there are not only potential cost savings in maternity care, but also potential reductions in risks to maternal and fetal/infant health.

The study is presented in an 86 page document.  One of the most remarkable findings is the fact that there are roughly 4 million babies born in the US annually and now a full one third or 33% are born via Cesarean section. This represents a 50% increase in cesarean deliveries in the last decade, and many cesareans performed are not medically necessary. Unnecessary  cesarean sections have been shown to increase health complications for both mother and baby.  But what was found in this study is that cesarean sections dramatically increase the cost of maternity care. According to the study,

“For the commercially insured, the average cost of a birth by c-section in 2010 was $27,866, compared to $18,329 for a vaginal birth.  Medicaid programs paid nearly $4,000 more for c-sections than vaginal births.  If the rate of c-sections were reduced from 33% to 15% (the World Health Organization recommends a c-section rate of 15% or less), national spending on maternity care would decline by more than $5 billion.”

The study also found that the cost of care for mamas increased 40% from 2004-2010 and this did not include costs of infant care, and also noted wide variation in costs from state to state and within states.  According to Harold Miller, Executive Director of the Center for Healthcare Quality and Payment Reform (CHQPR),

“Maternal and newborn care together represent the largest single category of hospital expenditures for most commercial health plans and state Medicaid programs, so reducing maternity care costs provides a major opportunity to reduce insurance premiums for employers and to make Medicaid coverage more affordable for taxpayers.”

Another startling finding (in my opinion) is the fact that the uninsured may be charged. According to the study,

“Uninsured parents could be charged over $50,000 for a baby born by c-section and over $30,000 for a baby born by vaginal birth.  Average provider charges for a c-section in 2010 were $51,125, but commercial insurance plans only paid $27,866, 55% of what an uninsured patient could be asked to pay.”

Other startling findings:

  • Vaginal births cost $18,329; c-sections cost $27,866 (for the commercially insured, 2010) and these costs are substantially more for the uninsured.
  • Medicaid, which pays for over 40% of all births, paid nearly $4,000 more for c-sections than vaginal births.
  • If the current national rate of c-section were reduced from 33% to 15% (the World Health Organization recommends a rate of 15% or less), we could save $5 billion!
  • The cost of maternal care (not including newborn care) jumped an incredible 40% between 2004 and 2010 for the commercially insured.
  • The total commercial payments for care of newborns were $5,809 for babies delivered vaginally and $11,193 for cesarean births.  Total Medicaid payments for newborn care were $3,014 for vaginal births and $5,607 for cesarean births.  Reducing the rate of prematurity among infants could significantly reduce these costs.
  • The largest share of all combined maternal-newborn costs goes to pay for hospital or other facility costs regardless of the type of birth.  59% of total maternal and newborn care costs for vaginal births are used to pay facility fees, and 66% of costs for c-sections are for facility fees.  Similarly, the hospitalization phase of childbirth consumed from 70% to 86% of all maternal and newborn care costs, depending on payment source and type of birth.
  • There is significant variation in cost within and across states.

If the United States is serious about health care reform, obviously maternity care reform has to be at the top of its list! If pulling the US cesarean section rate in line with World Health Organization recommendations would truly result in a savings of $5Billion dollars, we should be seriously looking at ways to reduce the number of cesarean sections performed. Likewise, since hospital fees represent more than 70% of maternity care costs, it behooves us as a nation to consider increasing the availability and accessibility of birthing centers and, for those low risk women, home births. Many other countries utilize nurses and other health care providers to provided additional care to mothers and babies in their homes before and after birth (The models upon which Mamas on Bedrest & Beyond is designed!) which has been shown to greatly reduce the numbers of hospital admissions and care costs. The US has the means, the skills and expertise and the workforce (talking about A LOT of potential jobs here!) to provide such care and hence, further reduce the cost of maternity care and the burden on the US health care budget. If as a nation the US fails to implement of these recommendations, we will continue to face spiraling out of control maternity care costs, and,  more tragically, more perinatal complications, catastrophes and deaths of mamas and babies.

Childbirth Connection is a national not-for-profit organization founded in 1918 as the Maternity Center Association.  Its mission is to improve the quality and value of maternity care through consumer engagement and health system transformation.

Catalyst for Payment Reform is an independent, non-profit organization working on behalf of large employers and other healthcare purchasers to catalyze improvements in the way healthcare services are paid for and to promote better and higher value care in the United States.

The Center for Healthcare Quality and Payment Reform is a national policy center that encourages comprehensive, outcome-driven, regionally-based approaches to achieving higher-value healthcare.

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