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How much does a new baby actually cost?

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A new study revealed some eye-opening statistics in how much it actually cost to deliver a baby in California. The aim of the study was to assess the between-hospital variation of charges and discounted prices for uncomplicated vaginal and caesarean section deliveries; in addition, it attempted to determine the institutional and market-level characteristics, which influence adjusted charges. Researchers at the University of California, San Francisco published their findings on January 16 in the journal BMJ open.

The researchers accessed data from the California Office of Statewide Health Planning and Development (OSHPD); they reviewed all privately insured patients admitted to California hospitals in 2011 for an uncomplicated vaginal delivery or an uncomplicated caesarean section. They assessed hospital charges and discounted prices adjusted for each patient's clinical and demographic characteristics. The study comprised 76,766 vaginal deliveries and 32,660 caesarean sections that took place in California in 2011.

The investigators found that, after adjusting for patient demographic and clinical characteristics, the average California woman could be charged as little as $3,296 or as much as $37,227 for a vaginal delivery, and $8,312 to $70,908 for a caesarean section; the rate was dependent upon on which hospital she received her maternity care. On average, the discounted prices were 37% of the charges. They found that hospitals in markets with an average level of competition had significantly lower adjusted charges for vaginal deliveries. In contrast; hospitals in higher income areas, as well as for-profit hospitals, had higher adjusted charges. Hospitals in areas with a large uninsured population charged significantly less for caesarean sections; however, hospitals in higher income areas, and for-profit hospitals and hospitals charged more. The investigators noted, however, that the institutional and market-level factors included in their models explained only 35–36% of the between-hospital variation in charges.

The authors concluded that their results indicate that charges and discounted prices for two common, relatively similar diagnosis groups, uncomplicated vaginal delivery and caesarean section, vary widely between hospitals and are not well explained by observable patient or hospital characteristics. Their findings indicate that for the more than half million women who give birth at California hospitals every year, medical costs are difficult to predict and can result in differences of thousands of dollars among facilities even in the same geographic area.

Take home message:
Often, an obstetrician or physician group will admit their patients to a single facility; however, some will deliver patients at more than one. This information is often provided when a woman presents for the initiation of her obstetrical care. Contacting the hospital’s business office can provide cost information. Another factor that must be taken into consideration is the level of care provided at the hospital. A hospital that has an excellent reputation and can provide a high level of care may be worth an increased cost. It is also important to determine how much of the cost will be covered by your insurance policy.