01/09/2013 10:06 am ET

Cost Of Childbirth Is Too High For Individuals And Employers, Groups Say

By: Elizabeth Palermo, BusinessNewsDaily Contributor
Published: 01/09/2013 06:30 AM EST on BusinessNewsDaily

It's common knowledge that raising kids costs money, but a new report by several leading health care organizations in the U.S. suggests that the high cost of delivering a baby is too high for individuals and employers.

The report argues that the high rate of cesarean section births in the U.S. is driving up the cost of birth for those with private insurance as well as those insured through Medicaid.

“Not only do unwarranted C-sections create great health risks for women and babies, this study shows that they also dramatically increase costs for employers and, through Medicaid programs, state and federal budgets,” said Maureen Corry, executive director of Childbirth Connection, a national not-for-profit focusing on maternal health care.

The findings were issued by several organizations, including the Childbirth Connection, Catalyst for Payment Reform, and the Center for Healthcare Quality and Payment Reform.

Corry noted that of the 4 million babies born each year in the U.S., one-third are delivered by cesarean section, which represents a 50 percent increase in this type of delivery over the past decade. Corry said if the rate of C-sections were to decrease from 33 percent to 15 percent, then national spending on maternity care could decline by more than $5 billion.

Business owners, who pay a high price for insurance for their employees, should listen closely to all this baby talk. The new report suggests that maternity and newborn care represent the largest category of hospital expenditure for commercial insurance companies. It may therefore be in the best interest of employers to support reforms of the maternal health care industry, which would significantly lower their premiums.

“With the cost of this care so high, this is a huge priority for employers and others who purchase care,” said Suzanne Delbanco, executive director of Catalyst for Payment Reform, a nonprofit employer coalition, focused on changing the way health insurance is financed.

Delbanco suggests reforming the way that physicians and hospitals are paid to reward them for eliminating procedures that drive up insurance premiums, such as elective early delivery and unnecessary C-sections.

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