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Center for Health Literacy Promotion Blog

Maternity care costs up 41-49% since 2004 Where is the value?

The greatest opportunity to make healthcare more affordable and improve
the health status of the population is to improve the way we deliver and pay
for maternity care. Investigations of the cost of maternity and newborn care
usually report charges made by providers. But charges are routinely discounted
at widely varying rates, so the figures are not very informative re actual cost. 
A new report shows actual payments made  in 2010 (latest figures) by employer
-based commercial insurers, Medicaid and parents.
Cesarean delivery payments vary by state, by regions within states, by hospitals
within regions,  and by providers within hospitals, so vaginal birth and cesarean
(surgical) delivery are reported separately. A summary of findings in the table
below suggests where to focus advocacy efforts.

Item                  Employer Insurance +        Public Insurance
Vaginal              Out of pocket                    Medicaid
Average Total
CHARGES                      $                                         
Vaginal                         32,093                  29,800                                                                                  
Cesarean                      57,125                  50,374
Average Total
Vaginal                        18,329 + 2244         9,131                   
Cesarean                      27,860 + 2669        13,590
Prenatal Care
Vaginal                        3,180  (25%)           2,405 (39%)
Cesarean                     3,580  (21%)           2,859 (36%)
Maternal Care
in hospital
Vaginal                        9,048 (72%)            3,347 (55%)
Cesarean                     12,739 (76%)          4655 (58%)

Newborn Care
in hospital +
3mo postpartum
Vaginal                        5,809 + 558           3,014
Cesarean                     11,193 + 721         5,607
Vaginal                       30,875 + 1241        13,875
Cesarean                    45,496 + 1351        19,971

Cesarean delivery costs are 50% greater than vaginal birth for all payers. 
And cesarean delivery payments by commercial insurers increased 41%
between 2004 and 2010. In addition, parents’ out-of-pocket costs increased
The best outcomes for women and babies appear to occur with cesarean
section rates of 5% to 10%. Rates above 15% seem to do more harm than
good (Althabe and Belizan 2006) Despite the evidence and the costs, the
US cesarean rate for 2010 was 32.8%.
The table suggests one explanation for the high cesarean rate is that surgical
birth is more lucrative than “the regular way”.  Commercial payers paid
clinicians an extra $1464, and paid hospitals an extra $7518 for cesarean
vs vaginal birth. Those incentives are hard to ignore.
Further, the table shows that 70-84% of all maternity payments went to
in-patient care. But the vast majority of mothers and newborns are healthy
and the vast majority of births are routine.  Prenatal care and support 
have been shown to reduce  preterm birth, failure to thrive, and other
factors that land babies in Neonatal Intensive Care Units where costs were 3.7
to 5.6 times those for other babies. More investment in prenatal care and support
would reduce the need for  cesarean, and could help re-align financial incentives.
Truven Health Analytics (2013) The Cost of Having a Baby in the United States.
Childbirth Connection, Catalyst for Payment Reform,Center for Healthcare Quality
and Payment Reform. 
Althabe F, Belizan JF. Caesarean section: The paradox. The Lancet 2006;368:1472-3.
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