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Bundles of Joy

Approximately one-third of births in the US are C-sections, a strikingly high proportion compared to similarly developed countries. Yet despite their frequent occurrence and contrary to popular belief, C-sections are riskier than vaginal births: Blood loss, heightened chances of infection, and other complications are all part of the fine print of the procedure. And although it’s widely understood that there are situations in which a C-section is medically necessary, experts caution that they are often performed in the US even when they aren’t needed. In fact, the World Health Organization estimates that C-sections should only account for around 10 to 15 percent of births, which is far less than the current rate of 33 percent.

So why are C-sections performed at such a high frequency? One reason may be the culture of risk-aversion in US healthcare. Though C-sections are more complex than traditional births, the range of possible outcomes and complications is comparatively well-understood. Performing C-sections, then, could remove liability with regards to the potential risks, such as the prolonged labor pains that are associated with a vaginal birth. Also, administrative burdens are often lower for C-sections: Studies have shown that rates of C-sections tend to increase during times when physicians may be in a rush, such as around lunchtime and toward the end of the day.

But perhaps the most significant factor contributing to high C-section rates is the financial incentive for healthcare providers. Since they are surgical procedures, C-sections are considered more labor- and time-intensive than standard deliveries, and as a result, physicians are paid an average 15 percent more for performing a C-section than a vaginal birth. As costs continue to rise for patients, healthcare providers’ incentives to perform C-sections are also on the rise, even for low-risk pregnancies. The current tendency for doctors to overperform C-sections, whether for the sake of money or convenience, represents a perverse form of outcome-based medicine, where healthcare professionals place far too little value on the well-being of new mothers.

It’s clear that something must be done to address this threat to maternal healthcare. To reduce the number of C-sections, then, one worthwhile step may be to remove the financial incentive for performing these often-unnecessary, risky procedures. Insurance companies may be able to offer a solution through bundled payments.

In the context of maternal healthcare, bundled payment plans are fairly straightforward: Rather than paying for each action that a healthcare provider performs, bundled payments group all episodes of care during the entire term of pregnancy under one umbrella and set a limit on the amount of money allotted for the expected course of treatment. Providers also typically receive a bonus for not exceeding outlined treatment costs.

Without the additional financial incentive of performing C-sections—and with the added incentive of minimizing treatment costs in order to secure their bonus—doctors are encouraged to deliver better long-term maternal care. This includes watching for preemptive signs of latent medical conditions from the onset of pregnancy and, if they appear, treating them in the first- and second-trimesters. This decreases the chance of eventually running into issues that may necessitate pricier, higher-risk procedures–such as C-sections–later on. As a result, bundled care payments present an effective solution that allows physicians to have better control over decision-making process and encourages close examination through the entire period of obstetric care, not simply at the end.

Several states have already seen promising results in implementing their own rolled-out bundled payment programs. For example, in 2012, the Arkansas Health Care Payment Improvement Initiative (AHCPII) was implemented and adopted by the vast majority of Arkansas payers, including Medicaid, commercial companies, and groups such as Walmart. AHCPII is structured by setting budget goals for both prenatal and postpartum care. Healthcare providers participating in the obstetric care receive incentive payments for delivering high-quality care without crossing over the threshold of intended costs. Within three years of its implementation, the program began to make progress toward its goals: It prompted a seven percent decrease in C-sections and a 3.8 percent decrease of state-wide perinatal spending.

Despite its known successes, concerns that bundled payments may swing the pendulum too far in the other direction and disincentivize C-sections to a dangerous degree still exist. In order to reduce total treatment costs, it’s a real possibility that payment schemes could prompt physicians to promote vaginal births even in complex cases where C-sections may be required. Without proper caution, therefore, financial incentives could again pose a threat to maternal health.

Yet programs are already finding ways to alleviate this concern. For example, bundled payment plans could allot money for treatment based on the complexity of each mothers’ case so that physicians feel comfortable spending more on expectant mothers with serious medical conditions. North Carolina’s Pregnancy Medical Home (PMH) program implements this idea by requiring the majority of obstetric providers to assess each Medicaid-eligible pregnant patient’s risk for premature birth. This strategy works toward bringing C-section rates below 20 percent among a specific demographic of women on Medicaid, but it still ensures that higher-risk pregnancies receive the care they need.

From coast to coast, pilot programs of bundled care payments (funded through both public and private insurance ventures) have continued to yield similarly positive results. Nationally, health services organization Cigna introduced the first nationwide episode-of-care model in 2017. In this model, providers receive a bonus shared savings payment if they meet the pre-decided cost and commit to quality standards, one of which includes reducing the rates of C-sections. On a smaller scale, a single California program spanning three hospitals yielded tangible success: It saw a 20 percent decrease in C-sections in those hospitals in less than a year and pushed to a total 33 percent decrease over six years.

While results have been promising and the possibility of further expansion of such programs seems optimistic, it is clear that widespread integration of bundled care presents unique challenges, especially in the US healthcare system. Without a national health insurance scheme, implementation of bundled payment programs has occurred in a piecemeal manner, and it will likely continue to do so. Since the efficacy of these strategies relies heavily on how well they can be accomplished through insurers’ policies, this obstetric care challenge is just one part of a larger debate over how healthcare costs should be paid for, and by whom. Regardless of who is providing the service, however, discussions of how to manage prices prompt further questions relating to provider reimbursement criterion and costs. Overall, re-evaluating insurance-making policies at both commercial and state levels can help to re-establish the providers’ priorities as they relate to cost and quality while continuing to press for the removal of financial incentive for unnecessary C-sections.

Giving birth in the United States can and should be safer and more affordable. By implementing bundled payments to promote holistic care and discourage unnecessary C-sections, the oft-hated insurance industry can make that happen.

Illustration: Brenda Rodriguez ’21

This article originally appeared in the March 2020 issue of the Brown Political Review magazine.

About the Author

Madeline Noh '22 is a Staff Writer for the Culture Section of the Brown Political Review. Madeline can be reached at