States are turning to alternative payment models to improve outcomes and reduce health care expenditures, representing a critical step forward specifically for the US maternal health crisis.
There is a maternal health crisis in the United States. We have the highest rate of maternal mortality among 11 developed countries, and rank 33rd out of 36 in infant mortality according to the Organization for Economic Co-operation and Development (OECD). For a nation that boasts some of the best health care providers and institutions in the world—a country that spends more on health care than any other—we have a responsibility to ensure our mothers receive the best care possible.
Worse yet, recent studies show that newborn outcomes are disproportionately affected by a woman’s race.
The source of our maternal health crisis is largely embedded in the fee-for-service chassis. The current payment infrastructure in the United States incentivizes higher revenue over better health outcomes. In fact, and perversely in maternity care, worse outcomes lead to higher revenue. For example, a low birth weight baby will lead to significantly higher revenue for the facility caring for that baby. There are, however, solutions that can be deployed within health plans that can align payers and providers around better outcomes and reduced costs for pregnant mothers and infants.
Bundled payments, or episodes of care, are a proven, evidence-based solution for maternity care being implemented within state health plans across the country. Health plans should look to states like Washington and Connecticut, where maternity-focused episodes are being deployed to improve health outcomes while reducing systemic costs to their Medicaid and state employee health plans.
Episodes for Maternity Improve Outcomes and Reduce Costs
The rate of C-sections is increasing rapidly in the United States, while decreasing in other countries. There is no clear scientific evidence for this increase, according to the American College of Obstetricians and Gynecologists. Rather, it is incentivized by the fee-for-service payment system: Cesarean sections are reimbursed at a higher level than vaginal deliveries, even though they put women at high risk of adverse health events. This results in the majority of C-sections being performed on women with low-risk pregnancies.
A Signify Health analysis of over 55,000 deliveries found the costs of C-sections are staggeringly higher than vaginal deliveries, with the average combined cost of a C-section totaling $40,739, and the average combined cost of a vaginal delivery totaling $22,044.
The disparity in cost becomes exacerbated when taking neonatal care into account. As the rate of C-sections rises, so too do neonatal complications. Newborns delivered by C-section are statistically more likely than those delivered vaginally to be put in a nursery level higher than 1. This is almost always a decision driven by the newborn’s birth weight, and the difference in cost between these care settings averages $100,000.
Episodes of care for maternity are driven by the best evidence-based practices and set a fixed price for all phases of care for the mother and the baby, resulting in the reduction of up to 20% of overall costs. While this is happening in some commercial plans, states are leading the way by leveraging the purchasing power of their Medicaid and public employee health plans.
In the state of Washington, for example, the Washington State Health Care Authority administers both Medicaid and the public employees’ health plan—cumulatively, about 30% of the state’s population. The state agency, under the advisement of The Bree Collaborative, has implemented a bundled payment model for maternity that includes prenatal care, labor and delivery, postpartum care, and pediatric care.
In Connecticut, the state’s employee health plan and the Connecticut Partnership Plan have embraced episodes of care for maternity as part of the Office of the Comptroller’s partnership with Signify Health. This program encompasses total care for expectant mothers from pregnancy to delivery and postpartum care, empowering providers with the freedom to provide the best possible care while reducing overall cost of care.
Episodes Incentivize Wraparound Services, Holistic Care
Episodes encourage a more preventive, proactive, and patient-centered maternal care experience. Patient outcomes are the ultimate measure of success in an episodes-based model. This allows providers to embrace a variety of innovative wraparound services that exist outside of the fee-for-service system.
The Commonwealth Fund notes that some of the highest-income countries with the best maternal outcome rates and lowest costs have integrated midwifery-led care into their health care systems. To this end, some states are embracing doula services within their Medicaid programs. Doulas provide continuous physical, emotional, and behavioral support to mothers before, during, and following childbirth.
Evidence suggests that pregnant mothers who receive doula care from professional, certified doulas are more likely to have a healthy birth outcome and a positive birth experience. When coupled with the episodes-approach, these improved outcomes create potential for cost savings for Medicaid programs. One analysis shows doulas reduce C-sections on average by 28%.
This evidence has led states such as Oregon, Minnesota, and New Jersey to seek federal authorization to provide pregnant Medicaid beneficiaries with the option of receiving doula services under Medicaid programs. Maryland is the most recent state to introduce reimbursement for doula services within its Medicaid program in hopes of increasing access to care, improving baby birth weight, and reducing C-sections.
States Can Lead the Way
States are increasingly leveraging their role as some of the largest purchasers of health care and, as such, are able to battle rising health care costs via alternative payment models and value-based benefit designs. By aligning the purchasing power of both their Medicaid and public employee programs, states have an opportunity to set the standard for how we care for pregnant mothers and newborn babies.
François de Brantes, MS, MBA, is senior vice president, episodes of care, Signify Health.