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A New Way Of Paying For Maternity Care Aims To Reduce C-Sections

The thrill of delivering newborns helped pull Dr. Jack Feltz into the field of obstetrics and gynecology.

More than 30 years later, he still enjoys treating patients, he says. But now Feltz is also working to change the way doctors are paid for maternity care.

Feltz’s New Jersey-based practice, Lifeline Medical Associates, recently partnered with the insurer UnitedHealthcare to test a new payment model. The insurer sets a budget with the practice to pay doctors one lump sum forprenatal services, delivery and 60 days of care afterward. If the costs come in below that amount, the medical practice gets to keep some of the savings. (Hospitals aren’t a part of this contract; the insurer pays them separately for their services.)

“We’ve always been taught to take care of patients as if they were our mothers and our daughters,” says Feltz, who also leads a coalition of obstetricians called the U.S. Women’s Health Alliance that advocates for high-quality, affordable care. “But now we have to take care of our patients as if they were our mothers and our daughters — and as if it was our money.”

This new program, announced in May, is a first step by the insurer to bundle physician payments for maternity care into a single flat fee that covers all care and procedures. A handful of insurers and state Medicaid programs are experimenting with similar models, sometimes incorporating hospitals and other health providers as well.

By moving from paying for maternity care in a piecemeal way to relying on bundled payments, insurers and doctors say they hope to cut costs and improve the quality of care for pregnant women.

But even fans of such a model acknowledge there are still significant obstacles to be worked out before this sort of flat-fee system could be implemented broadly.

The payment model is relatively new and still rare in maternity care; its structure can differ by insurer. Some insurers could pay a single amount to one doctor, who then uses part of it to cover hospital care. Other plans opt to cut a separate contract with the hospital. Insurers also vary in whether they make the lump sum payment before or after patients receive services. And the length of care, eligibility and services included in the bundle also vary.

In addition to, perhaps, reducing the overall cost of maternity care, the lump sums are seen by doctors and insurers as a possible way to improve health outcomes, including driving down the number of unnecessary cesarean sections in the United States.

About one-third of all deliveries in the U.S. occur via C-section, even though the World Health Organization estimates they are medically required in only 10% to 15% of births. The ratio of C-sections to live births varies dramatically among individual hospitals.

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