Last year, Community Health Choice, a Medicaid managed-care organization, paid for the births of 21,194 babies along the Texas Gulf Coast. For those deliveries, it spent $41.6 million on providers, such as doctors and hospitals; $11.9 million on physicians providing prenatal care; and more than $75 million on babies who ended up in the neonatal intensive-care unit.
With two providers, it also quietly began testing a program aimed at saving money while improving care for pregnant women and newborn babies.
“Houston is still a very fee-for-service kind of territory,” said Karen Love, executive vice president and chief operating officer. “We all know that the fee-for-service model really doesn't work. And so our thought was, where do we have the most ability to be an agent for change in our community?”
The model that Community Health Choice decided to test was a bundled-payment system, where providers receive a lump sum for all medical care in an episode instead of being paid per service. The model has gained popularity in Medicare in recent years as the CMS seeks to contain costs while maintaining or raising the quality of healthcare, two areas where maternity care is seen as holding perhaps the greatest potential for improvement. Yet obstetric bundled-payment programs are in their infancy, with only a handful of pilot programs across the U.S. Even advocates of bundled payment for maternity care warn that developing the best model is a complicated process that will require much more time before it can be implemented widely.
“It's absolutely a great potential direction to go in, but it's not easy,” said Jill Yegian, senior vice president of programs and policy at Integrated Healthcare Association, an Oakland, Calif.-based organization that works to improve affordability and transparency in healthcare. “The devil is in the details.”
Wrangling with those complexities is a task left to individual states, healthcare providers or payers that want to bundle payments for maternity care. They also must take the initiative to develop and implement models on their own, because no existing federal body has the regulatory authority to nudge them into doing so. As a joint federal-state program, Medicaid cannot broadly mandate maternal bundled payments across the country the way Medicare, which covers the elderly and disabled, has done for other medical procedures.
Design is one issue at the heart of the conundrum with bundled payments for maternity care. What should trigger the bundle? Does it begin with prenatal care? With delivery? When should it end, and whom should it include? How should providers—primarily hospitals, but sometimes birth centers—take on financial risk? Some models allow high-risk mothers, such as those who are obese or have AIDS, or high-risk babies; others include only low-risk pregnancies.
“You start with the decision of what you'd do in a perfect world,” said Dr. John Bulger, chief medical officer for population health at Danville, Pa.-based Geisinger Health System, whose bundled-payment program covers low-risk pregnancies and the mother only.