Covered California, the state's insurance exchange, will exclude hospitals with high rates of C-sections in an effort to reduce the overall number of medically unnecessary cesarean births, which can be costly and carry higher risks for mother and baby.
Under terms of its newest contract, Covered California will require insurers on its exchange to exclude hospitals with a C-section rate above 23.9%. Insurers will have to document rationale for doing business with hospitals that carry a C-section rate above 23.9%. The policy will begin in 2019.
Covered California's effort correlates with the federal government's goal to reduce the country's C-section rate to 23.9% within the next few years. In 2014, 32.2% of U.S. births were C-sections, according to the Centers for Disease Control and Prevention. The World Health Organization recommends a C-section rate between 10% and 15%.
California's C-section rate varies widely. In 2014, C-section rates in hospitals across the state ranged 12% to 70%.
California Hospital Association's staff was unavailable to comment but spokeswoman Jan Emerson-Shea said in an emailed statement that the association supports the goal of paying for value instead of volume.
"We believe, however, that the quality indicators used by Covered California must be nationally endorsed by organizations such as the National Quality Forum and they must lead to accelerated improvement and demonstrated results,” she said.
California Association of Health Plans, which represents 46 insurance exchanges, will work with Covered California to implement appropriate quality measures, said Nicole Kasabian Evans, a spokeswoman for the association.
Stephanie Teleki, senior program officer at the California Health Care Foundation, said Covered California's policy is “pivotal” to reduce C-sections.
“(Covered California) is aligning payment with certain outcomes,” Teleki said. “This is a huge step forward.”
The average vaginal birth was $5,809 compared with $11,193 for C-sections, according to the Center for Healthcare Quality and Payment Reform.
Teleki said providers nationally are acknowledging the higher cost of C-section deliveries and the associated risks, like higher mortality rates. The national push to lower the rate has provided an influx of data and tools to help physicians change common practices, she added.
Oakland, Calif.-based Kaiser Permanente has some of the lowest C-section rates in the state and the provider uses midwives. In 2014, the C-section rate at its Redwood City hospital was 16%.
“A big hope that many of us have is that providers will look to others as an example and follow suit,” Teleki said.