US com­pa­nies team up with hospi­tals to re­duce ma­ter­nity costs

Business World - - Labor&management -

NEW YORK — Gen­eral Elec­tric Co and other large com­pa­nies are try­ing to chip away at ris­ing child­birth costs for U.S. em­ploy­ees, work­ing di­rectly with hospi­tals to re­duce ce­sarean sec­tions and re­lated com­pli­ca­tions.

The ef­forts are in very early stages, with few de­tails on their im­pact out­side of cost sav­ings of a few mil­lion dol­lars so far. But they il­lus­trate yet an­other path com­pa­nies are tak­ing to bring down U.S. med­i­cal costs by work­ing with doc­tors and hospi­tals to set health goals.

GE’s ma­ter­nity strat­egy is de­signed to steer its em­ploy­ees to hospi­tals that are be­lieved to pro­vide bet­ter care and less likely to rec­om­mend un­nec­es­sary and costly in­ter­ven­tions, com­pany of­fi­cials told Reuters.

U.S. em­ployer spend­ing on ma­ter­nity care rose 50 per­cent in the last decade, fu­eled by a jump in C-sec­tion rates de­spite years of ef­forts to curb the prac­tice, ac­cord­ing to re­search firm Tru­ven Health An­a­lyt­ics.

“Ma­ter­nity is one of the main driv­ers of high cost claims,” for em­ploy­ers, said Ellen Kel­say, chief strat­egy of­fi­cer at the Na­tional Busi­ness Group on Health. Avoid­ing un­nec­es­sary C-sec­tions and min­i­miz­ing com­pli­ca­tions “de­creases turnover in the work­force fol­low­ing the birth of a child,” she said.

Gen­eral Mo­tors Co said it has in­cluded ma­ter­nity goals, in­clud­ing re­duc­ing C-sec­tions, in a new con­tract with a Detroit-area hos­pi­tal. Dow Chem­i­cal de­manded ex­pla­na­tions from hospi­tals that care for its em­ploy­ees when its C-sec­tion rate hit 44 per­cent sev­eral years ago. Now part of the merged com­pany DowDuPont Inc, it is work­ing on new pay­ment agree­ments with doc­tors and ad­min­is­tra­tors.

“We went to them and said how do you ex­plain this?” said Steve Mor­gen­stern, Dow Chem­i­cal’s North Amer­i­can Health and In­sur­ance Plan Leader, who called the rate “un­ac­cept­able.”

GE launched its Ma­ter­nity Care Se­lect Pro­gram in Cincin­nati, Ohio, home to its avi­a­tion busi­ness, where nearly 300 ba­bies are born to em­ployee fam­i­lies ev­ery year.

Lo­cal hos­pi­tal sys­tem TriHealth agreed to a sin­gle “bun­dled” pay­ment rate to care for low and mod­er­ate-risk moth­ers from the start of preg­nancy un­til 90 days af­ter the baby is born, rather than charge for each visit and de­liv­ery sep­a­rately. That typ­i­cally re­moves the fi­nan­cial up­side for C-sec­tions, which cost nearly 60 per­cent more, on av­er­age, than a reg­u­lar de­liv­ery.

Adam Mali­noski, GE’s man­ager of health ser­vices, said none of the com­pany’s health in­sur­ers of­fered bun­dled pay­ments on ma­ter­nity care when it de­signed its pro­gram, so it de­cided to work di­rectly with providers.

GE pays the out-of-pocket costs for women who en­roll, sav­ing them up to sev­eral thou­sand dol­lars. TriHealth and GE would not dis­close the bun­dled pay­ment rates or how they com­pare with other hos­pi­tal rates.

New de­liv­er­ies un­der GE’s pro­gram be­gan in 2016, when only 78 preg­nant women en­rolled. In 2017, 136 women en­rolled, TriHealth told Reuters. C-sec­tion rates for first-time, low-risk de­liv­er­ies, which rep­re­sent a small group within the pro­gram, dropped to about 6 per­cent in 2017 from 24 per­cent in 2016. That comes in well be­low the U.S. rate of 26 per­cent for low-risk births.

TriHealth would not dis­close the C-sec­tion rate for the to­tal group.

GE ex­panded the pro­gram to hospi­tals in Wis­con­sin, South Carolina and Mas­sachusetts in 2017 and an­nounced a fifth lo­ca­tion in New York in Au­gust, but says it is too early to pro­vide data for other lo­ca­tions.

GE ex­ec­u­tives said the pro­gram so far has saved the com­pany nearly $2 mil­lion be­cause of lower ne­go­ti­ated fees for ma­ter­nity care. It rep­re­sents a frac­tion of its spend­ing on the 113,000 em­ploy­ees and fam­ily mem­bers en­rolled in the GE health in­sur­ance plan, but a step in the right di­rec­tion, they added.

The rise of C-sec­tions has been fu­eled in part by fears about mal­prac­tice lit­i­ga­tion, as well as ex­pect­ing moth­ers with health is­sues or who are older, which raise the risk of com­pli­ca­tions.

Hospi­tals say that makes them re­luc­tant to set ma­ter­nity goals. The Stan­ford Health Care med­i­cal sys­tem works di­rectly with em­ploy­ers on health tar­gets, such as di­a­betes care, but has so far re­fused to set spe­cific goals on C-sec­tions.

In such higher risk cases, “it’s en­tirely ap­pro­pri­ate and (there’s) no way to de­ter­mine up­front” who will need a ce­sarean, said John Jack­son, who han­dles cor­po­rate health part­ner­ships at Stan­ford Health Care.—

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