Katy B. Kozhimannil, PhD, MPA

Katy B. Kozhimannil, PHD, MPA, is an associate professor in the Division of Health Policy and Management at the University of Minnesota School of Public Health and Director of Research at the University of Minnesota Rural Health Research Center. Her research applies health policy and health services research to the field of women's health, with a focus on maternal and child health. Dr Kozhimannil conducts research to inform the development, implementation, and evaluation of health policy that impacts reproductive-age women and their families. Twitter @katybkoz. E-mail kbk@umn.edu

 as part of a collaborative research partnership with 

 supported by the Robert Wood Johnson Foundation's 

Interdisciplinary Research Leaders Program.

Birth is the transformative, creative process by which we evolve as a society. It feels nearly impossible to put a value on this most precious human experience.

 in order to reimburse clinicians and facilities for the care they provide during pregnancy, labor, and childbirth. In order to incentivize the best possible outcomes of care, we need to 

 and pay well for evidence-based care, including care provided in 

Current trends and inequities in maternal health show that we’re not doing a good job of financing a system that supports high quality, equitable care during pregnancy and childbirth. Maternal 

 are on the rise in the United States, and we face terrible 

 disparities in maternal and infant health. 

There are 2 main components of payment for pregnancy and childbirth related care: 

. Facility fees for childbirth are paid to the hospital or birth center where a birth occurs; facility fees are not applicable for babies born at home. Physician fees are paid to the clinician for the clinical services and time spent caring for a pregnant patient before, during, and after childbirth. But “physician fees” apply to other maternity care clinicians, as well, including midwives.

For many years, midwives were paid a lower fee than a physician for doing the same work. Pay equity for midwives was broadly achieved for public programs with the Affordable Care Act, which ensures that Medicare and Medicaid pay clinicians the same amount for providing the same services, but the same equity is not required for private health plans. Furthermore, there is no similar type of pay equity for facilities, and there should be. CMS has 

, but this proposal provides a policy framework in which to understand payment parity for birth centers. 

 (approximately 98.5%) occur in hospitals, but 

. Data show a high degree of variability across hospitals in the quality of maternity care they provide—including 

. Quality also varies by patient demographics, with 

minority-serving hospitals providing worse quality

 of maternity care, overall. Clearly, there’s work to be done to better align financial incentives to support consistent and high-quality hospital-based maternity care.

 occur outside of the hospital, including at home (planned and unplanned) and at freestanding birth centers. A 

 is a healthcare facility that uses a midwifery model of care to provide services during pregnancy, labor and delivery, and the postpartum period. Freestanding birth centers are not connected to or affiliated with hospitals. They provide care for low-risk patients, and they refer or transfer to higher acuity services patients who develop clinical complications or who desire or need medical services that are not available in birth centers (for example, epidural pain relief or cesarean delivery). 

as well, but capacity is not keeping up with demand. 

report that they would use a birth center if one was available locally, if it accepted their health insurance, or if they shared a racial, language, or cultural background with the birth center’s clinicians.

Freestanding birth centers provide many of the same services that are provided for low-risk pregnancies in hospitals, and there is evidence of 

. Yet, freestanding birth centers are paid less than hospitals for doing the same work. That should change. 

 for freestanding birth centers were $2277, while hospitals charged an average facility fee of $10,166 for an uncomplicated vaginal birth. In addition to differences in facility fees for maternity services, there are facility fees for the infant. Birth centers can only charge for a facility fee related to maternity services, not for infant care. In other words, not only are there dramatic differences in fees between birth centers and hospitals, but hospitals can charge for services that birth centers provide but for which they cannot bill.

Another financial challenge for birth centers is the way that money flows when a transfer is required during labor. 

For approximately 20% to 30% of birth center patients,

 transfer to a hospital will be necessary, either before, during, or after birth. The facility fee payment is paid based on where the baby emerges, not where resources were expended during labor. Some health plans will pay a partial facility fee in cases of transfer, but generally, birth centers get little compensation when transfer occurs. So, transfers—which are sometimes necessary&mdash;can nearly bankrupt a birth center if many clients in a given month require hospital care. Yet, the birth center still needs to pay its bills.

Financing challenges are made more acute by payer mix. 

which finance nearly half of all births nationally among lower-income families, 

 the amount that private health plans pay for childbirth-related expenses. With payments already being lower for freestanding birth centers than hospitals, payer mix tilted toward Medicaid adds to the math challenge of staying in business. Birth centers can provide 

 but keeping the doors open is not easy, and 

analyses showing birth centers as a low cost option

 are frequently premised on a continuation of the current inequitable payment model. 

To be sure, some birth centers can make money by offering care to private-pay clients who can afford out-of-pocket costs of thousands of dollars for a custom-tailored birth experience. But birth centers with a commitment to taking clients from a range of socioeconomic backgrounds and that have a mission to contribute toward greater equity in childbirth struggle to make ends meet. 

excellent health outcomes for people who give birth at birth centers, and health plans ought to pay birth centers the same facility fee for the same services that they pay to hospitals. Doing so would go a long way toward incentivizing and expanding access to this evidence-based model of care.

Articles

Births in freestanding birth centers are increasing, and the number of birth centers is increasing, as well, but capacity is not keeping up with demand. Freestanding birth centers provide many of the same services that are provided for low-risk pregnancies in hospitals, and there is evidence of equivalent or better outcomes of care both here in the United States and in abroad. Yet, freestanding birth centers are paid less than hospitals for doing the same work.

Impossible Math: Financing a Freestanding Birth Center and Supporting Health Equity

 are high for everyone—for health plans, for taxpayers, and for 

. We are moving in the wrong direction, and it is well past time to change course.

Experts and stakeholders who care about maternal health have come together to publish the 

Blueprint for Advancing High-Value Maternity Care Through Physiologic Childbearing

 (hereafter called the Blueprint). Published on June 28, 2018, the Blueprint centers on access to healthy physiologic care around the time of childbirth. To do so, it lays out ideas for broad health systems changes to incent higher-value maternity care, with an eye toward improving health outcomes and experiences with wiser spending.

 focuses on 6 improvement strategies and makes priority recommendations for each. The first improvement strategy is: Improve maternity care through innovative care delivery and payment systems and quality improvement initiatives. While this is not a novel idea, the time for it is now. 

When I was a graduate student in health policy, I read a seminal book by one of my mentors, renowned health economist 

, engaged the challenges of healthcare financing along multiple dimensions. Both the title of and the concepts within that seminal text are germane here. How do we put a price on caring for people during pregnancy and childbirth in a way that financially supports the use of evidence-based practice; the safest, healthiest outcomes; and the best possible birth experiences?

The Blueprint directly engages some of the specific challenges that fee-for-service (FFS) payment models present for childbirth care. Frankly, normal birth is a process that sometimes takes a lot of patience, reassurance, waiting, and encouragement—elements of care that are not well compensated in FFS care. Paying for clinicians to “do things” works well when patients are sick and require specific services, but most pregnant people are not sick. They are healthy, pregnant people who need monitoring and support as they go through pregnancy, give birth to their babies, recover physically and emotionally, and parent their new child. We need payment models that compensate teams (including physicians, midwives, nurses, doulas, community health workers, lactation support providers, etc, as needed) for providing risk-appropriate and evidence-based services during pregnancy, childbirth, and the postpartum period. The Blueprint provides guidance on potential steps that could be taken to improve financing of maternity care.

Even under newer payment models that evolved in response to the known challenges of FFS care, the mode of delivery (cesarean vs vaginal) drives reimbursement for childbirth, financially nudging facilities and clinical practices toward greater use of a cesarean section. Indeed, data from 2010 births show that the 

 for a cesarean birth (prenatal, labor and delivery, postpartum, and newborn care) were substantially higher than payments for vaginal birth, in both private health plans ($27,866 for a cesarean birth vs $18,329 for a vaginal birth) and Medicaid programs ($13,590 vs $9131 for cesarean and vaginal births, respectively).  Clearly, the goal of such reimbursement is to compensate facilities and clinicians for the higher acuity of services that are needed to support a surgical birth when it is needed. To be clear, no clinician I’ve ever met is recommending a cesarean to a patient based solely on potential reimbursement. However, clinicians work in healthcare systems run by administrators who have to pay attention to the bottom line to keep the doors open and the books in the black, and the choices that clinicians and their patients have during labor and delivery is shaped by administrative rules, guidelines, and decisions. So, how can payment systems be changed to align incentives of health care system administrators, clinicians, patients, and families?

It is both possible and necessary to better organize the billions of dollars spent annually on healthcare services related to pregnancy and childbirth. The Blueprint offers multiple recommendations for improving maternity care payment systems, including the following:

Greater use of episode-based payment, which has shown promise in states like 

Better incorporates concepts like the maternity care home into practice by integrated financing of services, following examples set by 

 and the Center for Medicare & Medicaid Innovation’s 

Pay for high performing elements of maternity care, such as access to care from 

Implement quality improvement processes that support access to physiologic birth and high accountability for maternal support before, during, and after childbirth, including adoption of metrics based on scientific evidence such as the recent ACOG [American College of Obstetrics and Gynecology] guidelines supporting 

Other aspects of the Blueprint address crucial factors, without which improvement in maternity care is not possible, including directly and respectfully 

 inequities that haunt maternal and infant health. 

But payment matters. Organizing the financing of healthcare delivery to support improvements in maternal and infant health is possible and urgently necessary. 

In the United States, too many of our mothers are dying during and after childbirth. Costs of childbirth care are high for everyone&mdash;for health plans, for taxpayers, and for families. We are moving in the wrong direction, and it is well past time to change course.

A Blueprint for Building Better Maternity Care Payment Systems

We are failing our mothers, babies, and families in the United States. We are failing them on every level, with inadequate access to care, variable quality of care, and persistent disparities in maternal and infant outcomes of childbirth. 

 have access to needed care before, during, and after pregnancy, and access barriers include money, distance, and pervasive structural factors like racism and classism. First is money.  Healthcare is expensive, and most people need health insurance to afford access to care. Recent health policy discussions have included:

2) New restrictions on coverage of services that are central to women’s health (including 

 that require health plans to include “essential benefits” such as maternity and newborn care and mental health services 

Altogether, these changes could increase the chances of becoming pregnant while decreasing access to necessary care. 

Reductions in health insurance access during pregnancy

 affect access to, quality of, and outcomes of care.

Secondly, access is hindered by distance, with 

women in the most remote rural communities

 losing access to hospital-based obstetric services with each passing year. Additionally, not all rural communities are affected equally. Rural communities with more black residents and lower median incomes are 

. Also, hospitals are more likely to close down their maternity units in rural counties in states with more restrictive Medicaid policies, highlighting the intersection of vulnerability of geography, race, income, and policy. 

Among those who do have access to care, the 

quality of care during pregnancy and childbirth

 varies widely across hospitals, communities, and even 

racial and socioeconomic groups within hospitals.

 This variability in quality occurs in the context of broad 

 that shape the allocation of opportunity and resources (environment, education, housing, etc) to produce disparate birth outcomes. Indeed, 

disparities in infant and maternal outcomes

 by race are widely documented. We have long been aware of these racial disparities in birth outcomes, and—in spite of this awareness&mdash;the needle has barely budged. Truly improving equity in childbirth care requires a bold new 

 (freely available as full text until Dec 5, 2017) in 

, which describes these challenges and addresses the road ahead, with suggestions for systems-level reforms across 4 categories:

2)     Maternity care quality measurement

3)     Recognizing both medical and nonmedical aspects of childbirth

4)     Addressing social determinants of health and birth outcomes 

Transforming maternity care toward greater equity will also require actions in research, clinical care, and policy. We highlight 

 that researchers, clinicians, hospital administrators, and policymakers can take toward systems transformation across all 4 categories. Together, it is possible to take steps toward change to address longstanding problems with maternity care access, quality, and outcomes that have persisted for decades and worsened in recent years. Through innovation and collaboration across sectors, motherhood and infancy can become safer and more equitable for families across the United States. Betterment of birth is good for all of us.  

Truly improving equity in childbirth care requires a bold new path forward.

Our Maternity Care System Is Broken "Here's How We Can Fix It"

Racial bias happens everywhere; it happens, often implicitly, as decisions are made about access to childbirth care in rural America.

Both academic research and journalism have chronicled the recent rise in 

 but they sometimes ignore the fact that 

 is a person of color: 40% are African American; 35% are Latino; and 25% are Native, Asian, Pacific Islander, or multiracial. When 

a maternity care crisis hits rural America,

 it affects a portion of these people of color. 

In April 2017, my colleagues and I at the University of Minnesota Rural Health Research Center published a 

 showing that 179 rural counties (9% of rural counties) lost access to hospital-based obstetric services between 2004-2014. By 2014, more than half of rural counties had no hospitals where a woman could give birth. The media response was overwhelming, highlighting 

 of rural women who gave birth in precarious circumstances or who did not get the care they needed. The crisis is 

 are hardest hit. That is, some pregnant women are worse off than others when it comes to accessing the care they need. 

 that rural counties with more black residents are more likely to lack obstetric care, and more likely to lose it. In fact, the percentage of black residents was the strongest predictor of whether a rural county had obstetric services available in 2004, and one of the strongest predictors of whether a rural county that 

have obstetric services in 2004 would lose them over the next decade.

 in the allocation of healthcare services and the implications for health equity in the continuation of these patterns are clear. Some recent media coverage of maternity care access has zeroed in on the effects of obstetric care services loss in rural black communities in Alabama and Georgia. For example, 

, is one of two obstetricians serving a 2714 square mile area in rural Georgia, and 

, is a family physician caring for rural women in Alabama who are traveling further following each local hospital obstetric unit closure. Both of these physicians are African-American women serving socioeconomically and medically high-risk rural women in predominantly black communities. However, focusing on 

physician shortages and hospital finances alone

 obfuscates some of the broader systemic issues that pattern access—and loss of access&mdash;to maternity care services. These include, as our paper shows, state Medicaid policies as well as income and race in the community where a hospital is located.

The “traditional” narrative of rural America does not honor the long history of people of color in rural areas—like the 

changing demographics of immigration in rural America

. When attention turns to healthcare in rural communities, there is frequently 

an implicit or explicit focus on white people

 to healthcare access—including rural hospital closures&mdash;do not affect all rural residents equally. Solutions to challenges facing rural communities need to include people of color. The loss of hospital-based obstetric services is an equity issue. As such, community discussions around hospital service line closures should include representation from communities of color, and efforts to mitigate the challenges that follow closures must address clinical, practical, logistical, and cultural concerns of people of color. 

Above all, discussions of maternity care access should recognize that there are many factors that may render families vulnerable, and these include both race and geography.  

Author | Katy B. Kozhimannil, PhD, MPA

Articles

Impossible Math: Financing a Freestanding Birth Center and Supporting Health Equity

A Blueprint for Building Better Maternity Care Payment Systems

Our Maternity Care System Is Broken "Here's How We Can Fix It"

Role of Racial and Geographical Bias in Rural Maternity Care