SC saves $6 million after implementing early elective birth policy

Greenville NewsNovember 8, 2013 

South Carolina saved $6 million in Medicaid costs in the first quarter of this year by halving early elective deliveries, and it reduced infant hospitalizations in the bargain, a new analysis shows.

Under an effort called the Birth Outcomes Initiative, all 43 hospitals in the state that deliver babies agreed to stop these early elective deliveries — those before 39 weeks gestation which are often unnecessary and done for convenience — because babies born at 37 and 38 weeks can suffer health problems that lead to costly treatments.

And in January, the state’s Medicaid program, along with BlueCross BlueShield of South Carolina, stopped paying for those deliveries.

The result was a 50 percent reduction in these births as well as improved health outcomes and Medicaid savings of $6 million in the first three months of this year alone, according to Catalyst for Payment Reform.

The independent nonprofit promotes higher-value care whose members include large employers such as AT&T, 3M, IBM, Verizon as well as a handful of state agencies, including the SouthCarolnia Department of Health and Human Services.

“Early elective deliveries result in worse health outcomes for infants and higher health care costs,” DHHS director Tony Keck said.

“With the Birth Outcomes Initiative, we were able to reduce early elective inductions by 50 percent, which also means we have fewer babies spending time in the Neonatal Intensive Care Unit.”

Nationwide, early elective deliveries – either by inducing labor or by C-section – are on the rise and often done for non-medical reasons including the scheduling convenience of the patient or physician, the woman’s discomfort, or the doctor’s “perceived liability concerns,” according to Catalyst for Payment Reform.

For more than 30 years, the American College of Obstetricians and Gynecologists has recommended against these deliveries if they aren’t medically necessary, yet they account for 10 percent to 15 percent of births, Catalyst for Payment Reform reports, noting the rate in South Carolina was 10 percent in 2011 – or more than 6,000 births.

The American Academy of Family Physicians says that “elective induction more than doubles the Cesarean delivery rate,” and there’s an extra 88 days in the hospital on average for every 100 women induced, Catalyst for Payment Reform said.

Medicaid pays for half the births in South Carolina, according to CPR, while Blue Cross covers another 35 percent. And the way health care is reimbursed can influence how it is provided.

“Paying for a health care service that does not follow clinical guidelines can encourage providers – even unwittingly – to provide that service to patients,” the authors wrote.

The Birth Outcomes Initiative is a collaboration of stakeholders that includes DHHS, the South Carolina Hospital Association, BlueCross BlueShield of South Carolina and the state chapter of the March of Dimes, which led an educational campaign that helped raise public awareness.

And it engendered great buy-in from all the partners, said Dr. Amy Picklesimer, maternal fetal medicine physician with Greenville Health System and the clinical lead for the initiative.

“The biggest surprise for me was how easily this 39-week initiative was adopted across the state,” she said. “I’ve never seen this level of collaboration before.”

Picklesimer attributed the teamwork to good evidence that waiting until 39 weeks is the right thing to do.

“It’s not that anyone was necessarily intending to deliver before that, just that nobody realized how much they were drifting,” she said. “It’s easy to toe the line once it’s pointed out.”

The initiative was born out of the state’s budget woes.

“In 2011, Medicaid accounted for $5.9 billion in total state expenditures, or 27 percent of the overall $21.5 billion total state budget,” the CPR authors wrote.

“Medicaid was paying for more than half the NICU admissions in the state, and covering almost two-thirds of the cost of babies born at a low birth weight. Very low birth weight babies were costing Medicaid more than $100 million each year.”

A similar program in Louisiana, where Keck worked prior to coming to South Carolina, reduced these early elective births from 15 percent of all deliveries to 2 percent, according to Catalyst for Payment Reform. And Keck was promising reimbursement cuts to providers if it didn’t work here.

But early induced deliveries dropped from 23.8 percent to 18.3 percent across all payers, and from 9.62 percent to 5.24 percent among the Medicaid population, according to the report.

It’s too soon to say if there were higher rates of mortality among the babies in South Carolina, but research elsewhere suggests that shouldn’t have occurred, Picklesimer said.

And investigators are still looking at whether an unintended outcome of the initiative is more C-sections at 39 and 40 weeks, Catalyst for Payment Reform said.

But the initiative next hopes to tackle “non-evidence-based cesarean deliveries,” which cost more than natural births and can mean poorer outcomes, even at full term, the group said.

Picklesimer, who’s gotten calls from 16 other states about the initiative, said she expects to see continued improvements.

“I’m optimistic about the future,” she said. “It’s amazing what you can accomplish when everyone is working together to improve the cost of health care and the quality of care.”

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