The Payment Reform Landscape: Maternity Care Progress And Stagnation

Improvements in the delivery of health care often stem from costly medical and technological advances, but in maternity care the evidence makes a strong argument that less is more. We can intervene less and spend less money in labor and delivery care while improving the quality of care for women and their babies. Why then is there so much unnecessary intervention and why is it so persistent?

The Example of Cesarean Deliveries

In 1985, the World Health Organization (WHO) declared there was no scientific justification for cesarean births in more than 10-15 percent of pregnancies. And the evidence continues to support that there is no improvement in mortality for mothers or infants with rates exceeding 10 percent to 19 percent depending on the study.

Even though the medical literature suggests that lower rates of cesarean delivery are better for women and children, the actual rates in the United States remain persistently high. In 2014, the Center for Disease Control (CDC) reported that 32.2 percent of U.S. births were cesareans. Even among “low risk” first time mothers (full term singleton pregnancy without breech presentation), more than one in four babies is delivered by cesarean. And large variation among hospitals suggests room for improvement.

Progress

But there is evidence that strong economic incentives to reduce unwarranted intervention can work in maternity care.

Over the past several years, application of financial and other pressures has led to relatively quick reductions in the number of early elective deliveries (EEDs). Cesarean or induced vaginal deliveries before 39 weeks without a medical indication are particularly pernicious because they are performed only for the convenience of the mother, doctor, or hospital staff, and are associated with significant risk of poorer medical outcomes for mothers and babies.

In South Carolina, under the leadership of the Birth Outcomes Initiative (SCBOI), they were able to combine the work of the State Medicaid program (DHHS) along with SC’s largest payer, Blue Cross Blue Shield of South Carolina, to implement quality improvement efforts along with a nonpayment policy for non-medically necessary EEDs. The quality improvement effort included establishing a list of The American Collegeof Obstetricians and Gynecologists’ approved indications for early delivery, utilizing two modifiers on the claims forms, tracking rates of EEDs by hospital, and providing each hospital with baseline and quarterly updates. Combining the quality improvement efforts with a nonpayment policy for EEDs, which applies to the hospital and the physician, has enabled SCBOI to reduce the EED rate among South Carolina’s 44 birthing hospitals by 72 percent between the first quarter of 2011 when the Birth Outcomes Initiative was launched, and the third quarter of 2015 (from 9.62 percent to 2.70 percent). Also, 75 percent of the hospitals now boast a 0 percent rate of non-medically necessary EEDs, based on data received from the South Carolina Department of Health and Human Services. (Updated information on this and other SCBOI programs will be available in October at scdhhs.gov under SCHealthviz).

Similar trends can be seen across the country. The rate of EEDs has been declining overall — from 17 percent nationally in 2010 to 2.8 percent in 2016. However, there is still work to be done as experts agree this number should be zero and the work on EEDs hasn’t had much if any impact on the overall rate of cesarean delivery.

Stagnation

Even in the face of compelling evidence, many commercial health insurance plans have resisted realigning their payment structures in any bold way. When they have changed their approach to payment, most have added quality measures on maternity care into a larger set of measures that they use in broad pay-for-performance programs. Many have focused their efforts on educating expectant mothers and their doctors on the benefits of full-term, spontaneous vaginal births and the dangers of medically un-indicated cesarean deliveries. But these education efforts have not had substantial impact on clinical practice.

Reducing the overall number of cesareans will be more challenging than eliminating early elective deliveries, as determining when a cesarean is “necessary” is much less straightforward. Nevertheless, payment design has done little to encourage more judicious use of many interventions. Services that are associated with higher rates of spontaneous vaginal birth and less intervention, such as doula care and delivery in free-standing birth centers, are often not covered by insurance. Despite abundant evidence that care by Certified Nurse Midwives (CNMs) is associated with less intervention and equal or better outcomes, many insurers will not contract with midwives and, of those that do, many pay them at a lower rate for the same care.

In the case of hospitals, those that bring down their cesarean rates are actually penalized financially for doing so: hospitals are paid 50 percent more when delivery occurs by cesarean rather than vaginally. Recent evidence suggests that this differential payment may prevent decreases in cesarean rates: when a single delivery rate was paid regardless of birth route, cesarean rates decreased by an average of 20 percent (from 27.2-32.6 percent to 19.5-27.2 percent) among the three participating hospitals.

Potential Solutions

We don’t know for sure what provider payment or benefit design strategies will support good outcomes while reducing the level of unnecessary and potentially harmful interventions, but there are many worth trying, including:

• Encouraging health plans to pay facilities the same blended fee for vaginal or cesarean deliveries, which would take away the economic incentive for elective cesarean deliveries. Providers would be paid more than they are today for vaginal births and less for cesarean deliveries, resulting in a reduction of the frequency of cesareans and the attendant cost.
• Contracting directly with midwives, where allowed, offering the same payment as physicians, to increase access to providers known to intervene less often.
• Contracting with accredited free-standing birth centers, providing the option for low-risk women to deliver in a safe, out-of-hospital setting.
• Steering women to designated “centers of excellence” that have the processes in place to follow current medical guidelines and have shown they can lower the number of deliveries with intervention.
• Separately bundling inpatient and outpatient costs for a pregnancy, which could stimulate innovation in ambulatory prenatal care.
• Making doula care a covered benefit, allowing more women access to a service that the American College of Obstetricians and Gynecologists considers “one of the most effective tools to improve labor and delivery outcomes.”

In the world of medicine, sometimes the most persistent habits don’t change quickly, even with data-driven arguments. Nearly 170 years ago, Dr. Ignaz Semmelweis proved that washing hands was a sure-fire way for doctors to prevent maternal and infant mortality during childbirth. Still, even today fewer than half of medical providers wash their hands as often as they should. Without strong incentives from payers, could it be another century before the overuse of cesareans catches up with what medical science puts forth today as an acceptable norm?

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