Take away the incentives for too many c-sections
The state performs 11,000 unneeded caesarean births each year, in part because of insurance incentives. A measure passed by the last Legislature could help change the pattern.
By Carolyn McConnell
August 06, 2009.
Quick, what’s the most common reason for hospitalization in America? And what’s the most common surgical procedure? If you answered heart attack, appendicitis, cancer, diabetes, car crashes, and any of their associated surgical remedies, you’d be wrong, because the most common cause for hospitalization isn’t a disease or even an injury. It’s childbirth. And the most common surgical procedure is C-section.
C-section rates have been rising rapidly for several decades, a major contributor to the spiraling cost of childbirth in the U.S. Yet maternal and baby outcomes have been stagnating or worsening. The U.S. ranks dead last among industrialized nations for maternal mortality and second to last for infant mortality.
All of which should make childbirth Exhibit A in the Obama administration’s insistence on containing American health care costs while providing better care. It also suggests that an obscure measure buried deep in Washington’s new biennial budget could become an important model for national health reform.
Beginning this month, the state of Washington will pay hospitals the same amount for an uncomplicated C-section as for a complicated vaginal birth when it reimburses them through Medicaid. Almost half of all births in Washington are paid by Medicaid, so this measure will have a significant effect on the economics of birth in the state.
“C-section rates are trending up and there’s no medical necessity for that trend,” says Dr. Jeff Thompson, the state’s chief medical officer for Medicaid. C-section rates vary wildly between hospitals in the state, from as high as 48 percent down to 14 percent (Thompson won’t say which hospitals those are). When the Department of Health studied that variation, it found that it remained even when risks that make it more likely for women to need C-sections — such as maternal age, obesity, and diabetes — were factored out. Your chance of having a C-section depends a lot on what hospital you give birth in and where in the state you live.
Currently, the rate of C-sections in Washington is just under 30 percent. Nationwide, the rate is almost 32 percent, more than double what both the World Health Organization and the Centers for Disease Control say it should be. In many cases, C-sections save mothers’ and babies’ lives. But, like any surgical procedure, C-section causes harm as well as benefit. When the rate at which they’re performed rises above 10 to 15 percent, the WHO and CDC have found, the harm outweighs the benefits to mothers and babies.
It comes down to this: at least half of the approximately 22,000 C-sections performed each year in Washington are not only unnecessary, but harmful.
C-sections are major abdominal surgery, explains Dr. Jane Dimer, a Group Health obstetrician who chairs the regional chapter of the American College of Obstetricians and Gynecologists and co-chairs with Thompson the state’s perinatal advisory committee. C-sections bring with them, for the mother, a longer recovery time and heightened risk of infection and from anesthesia. In a first C-section, these risks are small, she says, but one C-section makes it highly likely a woman will deliver any subsequent babies by C-section. The risks to the mother go up with each surgery, and a woman who has several children by C-section faces heightened danger of placental complications, hemorrhaging, and ruptured uterus.
Babies born by C-section face greater risks of complications, including respiratory issues. “Costs for neonates are really what’s clogging the system,” Dr. Dimer says.
This is one clear example of what Atul Gawande has famously described in a recent article in The New Yorker (which President Obama ordered his aides to read and cited in meetings with members of Congress): “Americans like to believe that, with most things, more is better. But research suggests that where medicine is concerned it may actually be worse.” Gawande contrasts McAllen County, Texas, which has the nation’s highest per capita health costs, with Rochester, Minnesota, dominated by the Mayo Clinic, with vastly lower health spending and better health.
After ruling out other explanations for the discrepancy, Gawande concludes that the reason for the difference is the profit motive — doctors and hospitals in McAllen County have too many financial incentives to provide more medical care and none for providing better care. At the Mayo Clinic, the incentives push the opposite direction. Its doctors, for example, are salaried, so they have no incentive to perform more tests or procedures, and pay no financial penalty for spending more time with patients. With per-person Medicare spending (a useful proxy for overall health spending) $1,500 below the national average, Washington state is more a Rochester than a McAllen.
There are many reasons for this. The West Coast generally has somewhat lower costs, in part because of the presence of nonprofit HMOs like Kaiser in California and Group Health in Washington. Group Health, with its salaried doctors and a C-section rate near the lowest in the state, is Washington’s version of the Mayo Clinic. Group Health, which delivers 10 percent of the babies in the state, recently was featured in a New York Times article on health care reform, as a model for good yet cheap care. (Full disclosure: I gave birth to my first child at Group Health and remain insured by Group Health.)
Washington’s relatively low medical spending may also owe something to earlier efforts Thompson has led to make state health care better and leaner, including creating a medical technology review board and implementing a preferred drug list, which pushes doctors to prescribe the cheapest drug from among equally effective treatments. All of these steps seek to match the practice of medicine with scientific evidence about what works best.
With childbirth, the incentives all go the other way. On average, Medicaid pays $5,000 more for a C-section than for a vaginal birth, and private insurance pays a far greater premium. You don’t have to be a cynic to wonder if that could have something to do with the rise in unnecessary C-sections.
Thompson explains that there’s no good way for the state to pick out which C-sections are unnecessary. “Medicaid won’t pay for an unnecessary C-section, so hospitals have to code every section as necessary,” he says. But equalizing the amount hospitals get paid for vaginal and C-section births eliminates a financial incentive to perform C-sections. That should mean that the only reason for a doctor to perform a C-section will be that it is medically necessary, and in fact doctors and hospitals will have every financial reason to avoid C-sections — letting money sort out the necessary from the unnecessary. Policy wonks call this “realigning incentives.”
“We are choosing to improve quality mostly by using carrots rather than sticks,” says Dr. Dimer.
Dr. Elliott Main, chair of obstetrics at California Pacific Medical Center and principal investigator for the California Maternal Quality Care Collaborative, says childbirth care is a great place to start realigning incentives in medicine. “It’s a pretty good opportunity to put these concepts into action, because it’s circumscribed, not an all-your-life event like diabetes or hypertension,” he explains. “It has a beginning and an end. It’s packageable.”
He considers Washington’s move very promising. The size of the financial incentive is crucial, he says. That’s because there are such powerful incentives pushing for C-sections. Dr. Dimer explains that the incentives for C-section go beyond money. “In nature, labor can go on for hours and is highly unpredictable,” whereas a C-section delivery is highly predictable and far shorter. “In American culture, where time is money, having something that is finite and predictable is highly desirable,” she says.
Dr. Main says that financial incentives for vaginal birth have to be enough to counteract those factors, enough to command attention. He thinks Washington’s cuts in C-section reimbursement may just be that big. The state has slashed Medicaid reimbursement for uncomplicated C-sections from about $3,600 to around $1,000. Hospitals with high C-section rates are in for a rude awakening. Thompson says that since the change in reimbursements took effect he has already received calls from hospitals asking for help revising the protocols they use to decide when a C-section is called for.
Without any powerful lobby pushing for changing the reimbursement rate, it was the state’s fiscal crisis that got the measure into the state budget. The equalization of rates is projected to save the state close to $2 million and the federal government another $2 million. That’s a conservative estimate, which assumes the C-section rate stays flat. If the realignment of incentives works, the C-section rate will fall, saving Washington’s health care system even more in complications avoided.
And, Thompson, is quick to point out, it will make women and babies in Washington healthier. “This is an opportunity for us to take a leadership role to both improve quality of obstetrical service in the community and actually to spend less money,” he says.
Washington has a history of bucking the national tide when it comes to childbirth. It has a rate of out-of-hospital birth double the national average, and the state is one of only nine states in the country where Medicaid will cover out-of-hospital birth attended by a licensed midwife. In 2008 the Department of Health funded a cost-benefit analysis of the practice. It found that paying for home birth resulted in good outcomes for mothers and babies and yielded a net savings to the government of about $250,000 per year from the reduced numbers of C-sections. (Licensed midwives have every incentive for their patients not to have C-sections, including the obvious: Licensed midwives don’t do C-sections. They get paid next to nothing when their clients transfer to a hospital and have C-sections.)
Currently, midwives from Washington state are lobbying in the other Washington for legislation to push all states to cover out-of-hospital births with licensed midwives through Medicaid. Amber Ulvenes, a lobbyist for the Midwives Association of Washington State, recently used the state’s cost-benefit analysis to come up with an estimate of how much money this would save nationwide. She says if 1 percent of Medicaid-covered births were attended by certified midwives, at least $71 million would be saved annually.
If the state’s realignment of C-section incentives were to work and be implemented nationwide, the potential savings would be far bigger. With C-sections accounting for 45 percent of the $86 billion the U.S. spends on childbirth each year, lowering the C-section rate could go a ways toward paying for President Obama’s goal of getting health coverage to everyone in the country. If Washington’s realignment of childbirth incentives works, it will be one piece of evidence that Obama’s rhetoric just might be right: Not only can we afford health care reform, we can’t afford not to do it.
Comments:
Posted Tue, Aug 11, 8:30 a.m. Inappropriate
Sen. Karen Keiser, chair of the Senate Health and Long Term Care Committee, sent in this comment:
Your article was terrific, thank you very much for your good work on this issue. I had noticed the excessive c-section rate for Medicaid, and the private market for that matter, as well, and began working on ways to “level the playing field.” We have some hope that the change in hospital charges may help, but another innovation I think has more long-term potential. We are working to put “patient decision aids” into the hands of patients, giving them the power to decide, based on well researched and appropriately presented information, HOW they choose to be treated during childbirth. We have already piloted using this “patient decision aid” approach on prostate cancer cases in our state, and we are seeing very positive results.
When patients are given good solid information, they should be empowered to choose for themselves. It isn’t likely that most women would choose to have major surgery and a big scar on their abdomen, not to mention the risk of complications and bad outcomes. Right now the medical industry is making the choice for them. This is an interesting development in evidenced based medicine that you might want to look into. Both UW and Group Health are doing pilots right now.
Sen. Karen Keiser
Posted Tue, Aug 11, 9:22 a.m. Inappropriate
Carolyn and Crosscut - this is a great article - a window into what outside factors are fueling a decision so many of us perceive as personal. I read this and feel extra grateful that I had the benefit of a midwife, a doula, and a doctor all of whom let me labor way past when most women would have been getting a c-section. I think I had the benefit of the "decision aid" Sen. Keiser talks about above - because i had really good caregivers and good prenatal care. I spoke up about what I wanted, and got listened to.(I gave birth at the UWMC in Seattle).
Posted Thu, Aug 13, 1:21 a.m. Inappropriate
Dear Ms. McConnell,
Thank you for the opportunity to continue the conversation about giving mothers and babies the best start. Two points prompted me to comment.
First, You made a really great point that changing the pay structure alone will not significantly change the cesarean rate, if we assume that the majority of the primary care providers will remain surgeons. The new/old adage applies here, "When you give a surgeon a scalpel, every laboring woman looks like a cesarean." As you said, many doctors prefer knowing that a cesarean will take 45-60 minutes over the harder to predict vaginal delivery. This is why inductions happen Monday through Thursday and most especially the week before a holiday or long weekend. If we wish to change how birth happens for the vast majority of normal healthy women, we need to employ providers who are not primarily surgeons, and who do not pace labor to fit a busy clinical and surgical schedule. We need to include midwives in the care of the majority of healthy women, thereby freeing busy surgeons to do what they do best.
The second point is even more provocative, and comes from the comment by Senator Karen Keiser. Sen. Keiser makes the statement that, "Right now the medical industry is making the choice". My question is, who makes the choice on what "well researched and appropriately presented information" will be included in the "patient decision aid"? Another old adage is, "Follow the money." The institutions that have the most to gain or lose financially will always present information in the best light of the institution or the "greater good", and rarely look at what is best for the individual. For pregnant and birthing women, the best "patient decision AIDE" is a doula . An experienced doula, especially when she has been privately employed by the pregnant woman, gives the pregnant woman information about all of her choices, not just the choices preferred by the doctors, nurses and hospital administration, while helping the woman have positive communication with her doctor; supporting the woman and her doctor to be partners in her birth choices and her care.
Washington has always been on the cutting edge of birthing innovation, including the use of midwives and doulas. It is exciting to see what changes the future will bring.
Best wishes,
Corrine Flatt, midwife
Las Vegas NV
Posted Thu, Sep 3, 10:52 a.m. Inappropriate
I very much appreciated this article and have felt that birth is birth and should be reimbursed as just that--a birth. many years ago, I worked with an MD who did just that she only charged her women one fee, whether for C-Section or vaginal birth. She would say--"Its not their fault if they need a C-Section." Very progressive thinking to my mind, and a a major inner city high risk medical center in New York City, too.
One thought that crossed my mind when I read this article was that its possible the C-Section rate would increase because "time is money" and if the reimbursement is the same, then why let someone labor when you could get it over with in less than an hour for the same price............