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New CO APCD Analysis: C-Section Reduction Could Save $6.5 Million Annually

July 23, 2013 – DENVER – According to a CIVHC analysis of data released from the Colorado All Payer Claims Database (CO APCD), a 10 percent reduction in cesarean births could lower health care spending in Colorado by $6.5 million per year with $1.65 million in savings directly to the Medicaid program.

One of the most significant expenses for both Medicaid and commercial health plans is labor and delivery. Most births in Colorado (approximately 75 percent) are vaginal deliveries. However, the number of cesarean (C-section) deliveries has been on the rise. Although the overall rate of C-section deliveries in Colorado in 2012 was nearly 25 percent lower than a recently reported national average, it increased by approximately 50 percent between 1990 and 2012.

According to CO APCD data, C-section incidence has declined for the commercially insured population in recent years, yet remains significantly higher than that for Medicaid enrollees.

Source: CIVHC analysis of Colorado APCD data

“The variation in C-section rates by type of insurance coverage raises questions about why differences exist,” explains Jonathan Mathieu, Director of Data and Research at the Center for Improving Value in Health Care. “While claims data in the APCD cannot answer those questions, they point to opportunities for additional analysis and indicate potential interventions to change the trends.”

The significant increase in C-section rates in Colorado over the last several decades mirrors national trends. Although cesarean deliveries are sometimes medically necessary, some women elect to schedule C-sections for a variety of reasons in spite of an increased risk of bleeding, blood clots, reactions to anesthesia, and greater risks of complications in future pregnancies.

Reducing the rate of cesarean deliveries in Colorado by10 percent (consistent with the Healthy People 2020 goal) or just over 1,700 procedures annually could lower overall health care spending in the state by $6.5 million per year. This represents savings to Colorado Medicaid of $1.65 million, and to commercial insurance plans and beneficiaries of $4.85 million.

Source: CIVHC analysis of Colorado APCD data for 2012

“Fewer C-section births could be achieved through both policy and market mechanisms, including changes to insurance benefit design and payment,” notes Edie Sonn, Acting CEO and VP of Strategic Initiatives at CIVHC. “Colorado policymakers and purchasers can promote shared decision-making and other evidence-based initiatives to reduce the number of elective cesarean deliveries to improve the health of mothers and babies, and reduce costs.”

Benefit design and payment changes can be enacted through both policy and market-based mechanisms. For example, Colorado’s Medicaid program could explore requiring its contracted providers to implement shared decision-making for expectant mothers. Similarly, a robust education effort directed at employer purchasers—especially those that self-insure—could be focused on encouraging them to use their purchasing power to require changes on the part of the health plans that administer their benefits.

Reducing inappropriate use of expensive services that may not improve outcomes and in some cases poses risks, is key to achieving the Triple Aim of improving care, health, and bending the cost curve. Analysis of CO APCD data can identify patterns in utilization of and spending for particular services that illustrate opportunities for achieving the Triple Aim in Colorado. This is the first in a series of occasional reports providing such analysis, and exploring the implications for policy and practice.