Removing Financial Incentives for Unnecessary C-Sections

August 20, 2009

In a piece for Seattle’s Crosscut, “Take away the incentives for too many c-sections,” Carolyn McConnell makes a case for reducing the seemingly ever-increasing rate of c-sections (currently ranging from 14-48% in that state) by reducing the financial incentives that may encourage physicians to perform them more than necessary.

McConnell explains that beginning this month, Washington state, through Medicaid reimbursements, will pay hospitals the same amount for an uncomplicated C-section as for a complicated vaginal birth. She notes that “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.”

Until recently, the reimbursement policy seemed to favor c-sections; the author says:

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.

The state’s chief medical officer for Medicaid, Dr. Jeff Thompson, was interviewed for the piece. He explains that while there is no medical explanation for increasing rates of c-section, there’s no good way for the state to determine – for reimbursement purposes – which of those procedures were truly necessary. He explains that “Medicaid won’t pay for an unnecessary C-section, so hospitals have to code every section as necessary,” and that equalizing reimbursement for vaginal births and cesarean deliveries helps to eliminate the potential financial incentive to perform unnecessary procedures.

Thompson indicates that since the policy took effect, hospitals have been calling to request advice on revising protocols that help determine when a c-section should be performed – a sign that they may be changing their actions based on this simple change in reimbursement policy.

McConnell wonders what effect a similar nationwide approach might have, and concludes:

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.

McConnell also writes at the blog Rock the Cradle.

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