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Payment Change Improves Quality and Reduces Cost

From the National Business Coalition on Health: A new case study released by Catalyst for Payment Reform (CPR) with support from the Milbank Memorial Fund shares the story of South Carolina’s Birth Outcomes Initiative (BOI). This is a great example of how changing payment policies resulted in quality improvements as well as cost savings. Payment policies are a strong motivator for provider change and must be part of our quality, safety, and affordability efforts in Memphis!

The case study chronicles how South Carolina’s Department of Health and Human Services, South Carolina’s largest commercial health plan, and many other stakeholders partnered to engage providers in quality improvement activities, and then agreed together to stop paying for early elective deliveries—those occurring before 39 weeks gestation. Early elective deliveries are associated with worse health outcomes for infants and mothers and higher health care costs. 

Despite the overwhelming evidence against early elective deliveries, an estimated 10 to 15 percent of babies in the U.S. continue to be delivered early without medical cause.  The South Carolina BOI has so far reduced unwarranted early-elective inductions by 50 percent, decreased neonatal intensive care unit admissions, and saved the State’s Department of Health and Human Services more than $6 million (in just the first quarter of 2013). 

South Carolina is the first state in the nation in which the Medicaid agency and the largest commercial insurer have collaborated to establish a policy of nonpayment for early elective deliveries.

Posted by Cristie Travis at 10:29 AM

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