Standardizing Payments For Childbirth

Although the World Health Organization has long stated that cesarean section rates over 15% do more harm than good, the US currently has a c-section rate of more than double the ideal limit.

There are many reasons for the dramatic increase in c-sections over the last couple decades.  Too much medical intervention, a legal system that pushes doctors towards c-sections at the first sign of a hiccup in the birth, parental requests, ACOG’s recommendation against VBACs, etc.  Some have also pointed out that doctors make a lot more money for doing a c-section, and can do one a lot faster than it takes to wait for a laboring woman to give birth on her own.

It seems like that last one should be relatively easy to fix, if reducing the c-section rate is indeed a priority.  To make the math easy, let’s say that a surgical birth costs $20,000 and a vaginal birth costs $10,000 (these are completely random numbers.  The real numbers vary dramatically from one state to another, and from one health insurance network to another).  If we say that the goal should be no more than 15% c-sections, we can say that for 100 births there should be 85 vaginal deliveries (amounting to $850,000) and 15 c-sections (amounting to $300,000).  Add those two amounts ($1,150,000) and divide by 100 to get the average price of a delivery if we were to achieve a c-section rate of 15%:  $11,500.  In reality, the math would be much more complex than I’ve made it here, but the basics would remain the same.

Now that we have the average cost of delivery if no more than 15% of deliveries were surgical, that could become the standard payment for all births, regardless of whether a c-section were performed or not.  There would be no financial incentive for doctors to opt for c-sections, as they would no longer receive higher compensation for doing so.  The tough medical malpractice environment that OBs practice in would likely provide more than enough motivation for them to continue to do c-sections when there was a true medical emergency, despite the fact that they would know there would be no additional compensation for the birth.

The rising c-section rate is driven by a variety of factors, and obviously the problem needs to be confronted on many levels.  But it seems counter-intuitive to expect doctors to reduce their c-section rates when we’re paying them more to perform them.

About Louise Norris

Louise Norris has been writing about health insurance and healthcare reform since 2006. In addition to the Colorado Health Insurance Insider, she also writes for healthinsurance.org, medicareresources.org, Verywell, Spark by ADP, and Boost by ADP, and Gusto. Follow on twitter and facebook.

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