American Women Pay More to Give Birth than British Royalty - But Receive Worse Care

On Tuesday, Elizabeth Rosenthal of the New York Times tweetedout, “British royal born in fanciest ward :$15000. Average US birth: billed $30,000; paid $18,000. What’s wrong here?” Rosenthal has her numbers right — and to answer her question, what’s wrong is that the U.S. system of medical care charges patients on a fee-for-service basis without giving consumers transparent pricing information. Worse yet, Americans don’t even receive particularly high-quality maternal care in exchange for their outsized medical bills.

Rosenthal’s tweet leads to a detailed analysis she did for the New York Times in June. She found that hospitals charge about $30,000 for a vaginal delivery and newborn care, and C-sections cost closer to $50,000. Insurers only pay $18,000 to $28,000 on average for those services — and out-of-pocket costs for women with insurance, which used to be almost nothing, haverisen to an average of $3,400 today:

The biggest reason for this disparity is the American medical culture, in which doctors have a perverse incentive to perform as many procedures as possible since they can bill for each test and treatment. Patients don’t know the size of the bill they’re in for until they get it because the cost of U.S. health care is largely opaque. So it’s not surprising that many doctors perform unnecessary procedures on pregnant women.

For instance, the American Academy of Family physicians released a list of 90 most common unnecessary procedures that includes expensive C-section deliveries for healthy women before 39 weeks of pregnancy. Consumer groups point out that the rates of these C-sections have skyrocketed without many discernible health benefits, as have ultrasounds after 24 weeks of pregnancy, and early epidurals.

Technological advancements exacerbate the costs of unnecessary procedures like those by raising the cost of the underlying treatments. In fact, progress in technology has accounted for at least half of the rise in national health care spending in the last 70 years. That’s not to say technology isn’t critical for better medical care. But when it’s used for the purpose of wrangling extra fees from patients, it only drives up costs, and C-sections for women who don’t need them are good examples of costlier operations that provide little benefit.

Of course, not all hospitals are staffed by doctors hawking inessential and expensive procedures to pad their bottom lines. Unfortunately, Americans have few ways of knowing what a hospital charges for its services, or the level of quality that it provides.

But for all the money that Americans spend on maternity care, newborns in the United States still die at a higher rate than babies in other industrialized nations. In fact, Save the Children found that 11,300 U.S. babies die on their first day of life, which is a 50 percent higher first-day mortality rate than all other industrialized countries included in its study combined.

Many American mothers also don’t receive services that are commonplace in countries like England, such as simple lessons in child-rearing and breast-feeding for first-time moms. The separation of physical and mental health benefits in American insurance — which persist despite a 2008 law mandating parity between the two types of care — also presents a barrier for mothers who suffer from serious conditions like postpartum depression. Americans may be paying more than royalty prices for their health care — but the care they’re getting is often less than commonplace.

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