How Cutting Health Costs $5 Billion Can Improve Birth Results

It's been clear for some time that, apart from putting babies and mothers at unnecessary risk, the excessive use of cesarean section in the U.S. is taxing the health system. Data from a comprehensive new study quantifies that cost: about $5 billion a year.

The study, by the research firm Truven Health Analytics, found that c-section births generally cost 50 percent more than vaginal deliveries. For those with commercial insurance, the average cost of a c-section birth in 2010 was $27,866, compared with $18,329 for a vaginal delivery. For those covered by Medicaid, the respective costs were $13,590 and $9,131.

The three advocacy groups that sponsored the study -- Childbirth Connection, Center for Healthcare Quality & Payment Reform, and Catalyst for Payment Reform -- calculated that $5 billion a year could be saved if the current cesarean rate of 33 percent of births was reduced to 15 percent. The lower level would reflect cases of genuine medical necessity, according to the World Health Organization. Four million babies are born in the U.S. annually.

A number of hospital systems and states have enacted reforms that are reducing elective cesareans. Most hospitals in Oregon and Oklahoma only allow the procedure at 39 weeks of gestation in cases of medically necessity. Texas Medicaid no longer pays for it, except under those conditions. The Truven study should prompt other health systems to follow these examples.

The result would not only be financial savings but healthier babies. The elective use of c-sections has contributed to babies being born too early. From 1990 to 2009, the percentage of U.S. babies delivered at 37 to 38 weeks grew to 27 percent from 19 percent. A growing body of research shows these babies, while not technically premature, are fragile. According to a 2011 study, children born at 37 weeks are twice as likely to die in their first year as those born at 40 weeks. They suffer from significantly more health problems, including respiratory ailments and sepsis.

(Lisa Beyer is a member of the Bloomberg View editorial board.)

Read more breaking commentary from Bloomberg View at the Ticker