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Take Steps to Reduce Your Labor & Delivery Costs

Labor and delivery account for nearly 25% of all hospitalizations for many employers, and costs associated with pregnancy and its complications are a driving factor in the rising costs of health care. The growing use of medically unnecessary interventions is increasing costs and complications among mothers and babies, with no evidence of improved outcomes.

The Catalyst for Payment Reform (CPR), an independent, non-profit corporation working on behalf of large employers to catalyze improvements in how we pay for health services and to promote better and higher-value care in the U.S., has issued an Action Brief designed to help employers understand the issue and actions they can take to improve the cost and quality of labor and delivery for those on their health benefit plan.

According to CPR, major actions employers can take include:

USE CPR’s health plan request for Information (RFI) questions and model contract language available at

ENCOURAGE your insurer or third party administrator (TPA) to:

  • Create payment contracts with providers and hospitals that remove perverse incentives for today’s high rates of intervention in labor and delivery, including unnecessary cesarean deliveries;
  • Encourage or require hospitals and physicians to implement a “hard stop”policy on elective inductions prior to 39 weeks;
  • Require pre-authorizations for any elective deliveries prior to 39 weeks for hospitals that do not have a “hard stop” policy;
  • Incorporate maternity quality metrics in performance-based payment contracts;
  • Provide members with information on the quality of maternity care across the physicians, midwives and hospitals in its network;
  • Educate members, network physicians, and hospitals about high-quality,safe, cost-effective maternity care; and,
  • Credential and reimburse certified nurse midwives to provide maternity care in a hospital setting.

STAND by your plan during contract disputes with providers regarding programs that incentivize members to seek evidence-based maternity care.

EDUCATE employees on the importance of full-term births and the health consequences of elective inductions and cesarean deliveries.

IMPLEMENT benefit design changes and shared-decision making tools to encourage pregnant mothers to make informed and evidence-based decisions about when and how they deliver their babies.

Memphis Business Group on Health provides information on the progress Memphis-area hospitals are making on reducing elective deliveries before 39 weeks. Check out hospital performance on normal deliveries on the Leapfrog Annual Hospital Survey. Click "click to change treatment" button on the left and add Normal Delivery. Click the "I" for each hospital to see their rate of elective deliveries before 39 weeks. The goal is to have less than 5%!

Read the full Action Brief.

Posted by Cristie Travis at 7:43 PM

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