DOH COST BENEFIT ANALYSIS - A SUMMARY

Increased Utilization of Licensed Midwives Improves Outcomes and Decreases Maternity Care Costs

An independently conducted cost-benefit analysis released by the Washington State Department of Health (DOH) in January 2008 indicated that licensed midwifery care results in cost savings to Medicaid of nearly half a million dollars biennially and when private insurance companies are included in the analysis, the savings to the healthcare system in Washington is over $2.7 million. The DOH arrived at these numbers by analyzing Washington State Medicaid claims data from 2001-2004. Using the most conservative assumptions regarding c-section rates, the DOH determined that only 11.9% of women who had licensed midwives as their primary maternity care providers had c-sections compared to 23.9% of women on Medicaid who did not receive prenatal care from a licensed midwife. (p. 10) The report concluded that these differences result not only in substantial savings to the health care system but in lower medical risk and costs to families. (p.2)

More than 4.3 million babies are born every year in the United States. Within the healthcare system, childbirth is the leading reason for hospitalization and charges for birthing women and newborns far exceed hospital charges for any other condition. The current system of maternity care in the U.S. is procedure-intensive, with cesarean section (c-section) the most common operating room procedure. Between 1996 and 2006, the national cesarean rate rose by 50% and according to the latest statistics, an unprecedented 1 in 3 American women now undergoes this costly surgery during childbirth.

The cost savings estimates determined by the DOH analysis are based solely on the costs of avoided c-sections and the report indicates that these numbers may well underestimate the actual savings since they do not take into account all the costs avoided by the significantly lower rates of medical intervention in planned home births compared with hospital births. (p. 12) The report cites “credible and recent studies that provided sufficient evidence to enable [them] to draw the conclusion that planned out-of-hospital births attended by licensed professional midwives in the U.S., and in the state of Washington, had similar rates of intrapartum and neonatal mortality to those of low-risk hospital births, and that medical intervention rates for planned out-of-hospital births were lower than for planned low-risk hospital births.” (p.1) The report noted, but did not quantify, many prospective costs that are avoided, due to the intensive level of prenatal and postnatal care provided by licensed midwives. These include: higher breast-feeding rates, fewer low birth-weight babies, a greatly reduced c-section rate, and a significantly lower risk of other costly medical interventions during labor and birth that aren’t without risk.

The DOH report further found that prenatal care provided by licensed midwives typically costs less than the care provided by other types of maternity care providers. Additionally, newborn costs for an out-of-hospital birth are generally lower. (p. 9) Of particular note was the finding that women who received prenatal care from licensed midwives were less likely to have a newborn with low birth-weight (less than 1800 grams). (p. 4) This finding is significant since low birth-weight is associated with numerous subsequent health problems and possible unaccounted-for-costs in the long term. (p.9)

Women planning births with licensed midwives in Washington State receive comprehensive prenatal care and plan to deliver at home or at freestanding birth centers where they receive continuous, one-on-one labor support from professional midwives trained to provide intrapartum and postpartum care to low-risk women and newborns. (p.1-2 & 10) The DOH report found that over 87% of the time, transfer to a hospital is not required for these mothers or their newborns. (p.3) The majority of transfers from a planned birth center or home birth to a hospital are non-emergent, with maternal exhaustion being one of the most common indications. Overall, these women and babies receive lower rates of costly medical interventions – less electronic fetal monitoring, fewer episiotomies, lower rates of vacuum extraction and c-section (p. 10) – with neonatal outcomes comparable to those of low-risk hospital births. In particular, the data analyzed in the DOH report indicates that the risk of cesarean section is half as low for women who received their primary maternity care from licensed midwives (adjusted relative risk 0.49, confidence interval=.45-.53; p=0.00). (p. 4)

Download a PDF of the report