Hospital Charges Still All Over the Map
You can get from New Jersey to Maryland in less than an hour, but despite the proximity, New Jersey hospitals, on average, charge 3-4 times more than Maryland hospitals for both vaginal and cesarean births. This is just one of the notable facts gleaned from Childbirth Connection’s analyses of the latest maternity charges data. Although the data do not show whether higher charges reflect better care, researchers who look at price variation generally find no relation between prices and the quality of care, complexity of patient care needs, or costs of actually delivering care. Such unwarranted price variation amounts to billions in wasted spending across the health care system, according to a February report from Thomson Reuters that looked at various hospital procedures.
New charts compiled by Childbirth Connection (PDF) show the significant price variation across states that report average labor and birth hospital charges to the Healthcare Cost and Utilization Project (HCUP). The chart set also includes average prices charged by birth centers, which fall well below charges for uncomplicated vaginal births in hospitals. State-by-state analyses (PDF) show charges increasing year-to-year, and reveal differences by mode of birth and presence or absence of complications.
Labor, birth, and newborn care are the most common and costly hospital conditions for both Medicaid programs and private insurers. The data in Childbirth Connection’s Charges Charts reveal four potential strategies for reining in costs:
- increase the proportion of vaginal births – Hospital charges for cesareans are about 66% higher than hospital charges for vaginal births (a difference of $5,900- $8,400 depending on complications).
- provide safer care – Complications increase charges by about 35% (a difference of $2,800 – $5,400 depending on mode of birth). Some complications are preventable with hospital safety initiatives.
- remove barriers to out-of-hospital birth for low-risk women interested in these options - Birth center charges are $6,600 less than charges for uncomplicated vaginal births in hospitals.
- reduce charges for births in facilities and states where charges exceed average - Policy makers can work to increase price transparency and align payment with quality.
We can improve the quality and value of maternity care by identifying innovations that safely and fairly achieve these goals and reduce unintended consequences.
Resources from Childbirth Connection
Thank you, Amy Romano, for this fascinating guest post on the economic side of birth. Childbirth is the most common reason for hospital admission in the United States (AHRQ, 2002). Simple changes that will improve the experience of the families, save significant money and reduce unnecessary interventions, Lamaze’s Healthy Birth Practice #4. have been needed for a long time. Midwifery care for low risk women is one step in that direction. There are many other things that can happen to achieve the goal of healthy mothers, healthy babies while reducing costs. What do you think are some steps that can be taken to reduce the spiraling and often unnecessary medical costs of having a baby? What should hospitals and health care providers be doing to get these costs under control? How can consumers play a part in that? Please share your ideas here, or programs that you are aware of that are working on this very issue!
Agency for Healthcare Research and Quality, (2005). Hospitalization in the United States, 2002 (AHRQ Publication No. 05-0056). Retrieved from website: http://archive.ahrq.gov/data/hcup/factbk6/