Study Identifies Cost of Having a Baby in the United States

There are 3 goals in healthcare: (1) improved care, (2) improved outcomes, and (3) lower costs. Maternity care, which impacts approximately 85% of women during 1 or more episodes of care, provides opportunity for improvements in healthcare value, according to the authors of a recent report, The Cost of Having a Baby in the United States. The report was commissioned by Childbirth Connection, the Catalyst for Payment Reform, and the Center for Healthcare Quality and Payment Reform to highlight the need to improve the alignment of maternity care payment and quality.

Approximately 4 million women give birth in the United States each year. The current study is an update of a 2007 Thomson Healthcare report on maternity costs. The authors used maternal medical and drug claim records and estimated the costs of the first 3 months of a newborn’s life using newborn claim records identified in the Truven Health (formerly Thomson Reuters) MarketScan^® commercial and Medicaid databases.

Cost was defined as the amount that employers or Medicaid managed care plans and Medicaid programs and others pay hospitals, clinicians, and other service providers (the cost of care to the organizations and individuals that pay for the care, not the costs incurred by organizations and individuals who provide care).

The study assessed the costs for childbirth separately for vaginal or cesarean births; previous studies have shown that there are significant differences in costs between the 2 delivery methods. To address the wide variation in the rate of cesarean section across states, across regions within states, and across hospitals and physicians within regions, the researchers noted that analyzing the 2 methods separately provided more meaningful results. Additional analyses were performed for source of payment (including out-of-pocket expenses), type of service, phase of care, cost variation across selected states (maternal only), and neonatal intensive care unit costs.

Among women with employer-provided commercial health insurance, the average total cost for care for vaginal births was $32,093; the cost for care for cesarean births was $51,125. The average total commercial insurer payments for all maternal and newborn care were $18,329 with vaginal birth and $27,866 with cesarean birth.

Medicaid average total maternal and newborn care charges were $29,800 for vaginal birth and $50,373 for cesarean birth. Medicaid payments for all maternal and newborn care were $9131 for vaginal birth and $13,590 for cesarean birth.

The authors noted that both commercial and Medicaid payers paid approximately 50% more for cesarean births compared with vaginal births. For both types of births, commercial payers paid approximately 100% more than Medicaid.

For beneficiaries with commercial insurance who had vaginal births, the primary insurer paid the largest portion (87%; $15,931) of total maternal-newborn payments; on average, out-of-pocket costs amounted to 12% ($2444) of the total cost and the remaining 1% ($153) was paid by secondary insurers. For beneficiaries with commercial insurance who had cesarean sections, the primary insurer on average paid 90% ($24,949), out-of-pocket costs were 10% ($2669) of the total costs, and secondary insurers paid the remaining 1% ($267). (The numbers exceed 100% due to rounding.)

For births covered by Medicaid, Medicaid paid nearly all costs for both vaginal (99%; $9002) and cesarean (98%; $13,327) births.

Among the total average payments by commercial insurers for maternal-newborn care with vaginal births ($18,329), 59% went to facilities and 25% to maternity providers, followed, in descending order, by payments for anesthesiology, radiology/imaging, laboratory, and pharmacy services. Among total payments by commercial insurers for maternal-newborn care with cesarean births ($27,866), 66% went to facilities, 21% to maternity care providers, and the remainder for anesthesiology, radiology/imaging, pharmacy, and laboratory services, in descending order.

The corresponding percentages of total average payments for vaginal births covered by Medicaid ($9131) were 59% to facilities and 23% to maternity care providers. For cesarean births ($13,590), 65% went to facilities and 20% to maternity care providers. For both types of births, the remaining Medicaid payments covered pharmacy, radiology/imaging, laboratory, and anesthesia services, in descending order.