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IU STUDY: 'DRIVE-THROUGH DELIVERIES'
DO NOT RESULT IN THE COST SAVINGS
TOUTED BY ADVOCATES
BLOOMINGTON, Ind. -- New research by three Indiana University professors finds that conventional estimates about the cost of an additional day in the hospital for new mothers after delivery appear exaggerated and that the potential cost savings to managed care providers is closer to a few hundred dollars, rather than thousands of dollars.
IU professors Ming Tai-Seale, Marc Rodwin and Gerard Wedig, in IU's School of Public and Environmental Affairs, took advantage of a natural experiment -- the implementation of Medicaid managed care in Indiana -- to examine the empirical evidence on the cost impact of shortened length of stay for child birth and labor.
Studying 5,585 vaginal deliveries between 1993 and 1995, the professors found that while the length of a stay at the hospital for maternity care was reduced by 21 percent, actual savings were only $280 per delivery, or only 12 percent of total hospital costs before managed care.
Further, when the full costs of an earlier discharge are taken into consideration, including costs to patients and their families, the savings associated with a shortened hospital stay may be even less, the professors conclude in the lead article of the current issue of Medical Care Research and Review, "Drive-Through Delivery: Where Are the Savings?"
In recent years, managed care organizations have reduced the length of hospital maternity stays -- sometimes to even less than 24 hours -- as a way to lower costs. Last year, President Bill Clinton signed legislation requiring that insurers reimburse hospitals and patients for up to 48 hours for a vaginal delivery and for four days in instances of cesarean delivery. However, the legislation only applied to privately insured patients.
"The Draconian mandate for only a one-day stay should be removed, and has been removed for privately insured women," Tai-Seale said. "There is a considerable group of mothers who still deliver babies without this kind of protection: they are the Medicaid mothers. The federal law has left out quite a large segment of the Medicaid population, who are usually underprivileged to begin with."
"These mothers have fewer resources after delivery than their privately insured counterparts," Tai-Seale continued. "They may benefit more from being able to recuperate outside of their homes -- whether in the hospital or in a stepped-down facility -- so they can spend more quality time with their newborn and rest themselves."
This study is among the first to provide this kind of empirical evidence about cost savings, and there is little statistically significant data otherwise.
The study was conducted at Wishard Memorial Hospital in Indianapolis, a 317-bed tertiary-care teaching hospital that serves more than 80 percent of the Medicaid population in Indianapolis. Wishard houses the Rogenstrief Medical Record System, considered one of the most comprehensive medical information systems in the country, with electronic patient records from billing, registration, pharmacy and laboratory for all patients. As a result, Tai-Seale, Rodwin and Wedig were able to study all the clinical information for vaginal deliveries, as well as the charges and factors used to convert charges to costs between January 1993 and December 1995.
Previous estimates have placed the cost savings of discharging a new mother and her child without a second day of maternity treatment at $1,000 to $2,000. Tai-Seale said the calculation of these cost savings often has been based on average per-day costs.
"But the truth is, given the intensity of the care and the services provided during that stay, the first day is when it is most intense. The second day is more for recuperation and requires much fewer resources," she said. "The woman simply needs recuperation and not much more than Jell-O from the hospital cafeteria. The majority of the costs are incurred during the first day of her stay."
The study's authors challenge decision-makers to first estimate the total costs and benefits of an early discharge, instead of assuming there will be significant savings from early discharges. Also, there may be other ways of producing similar cost savings without early discharge, perhaps with improvements in patient satisfaction and quality of care.
Prevailing hospital cost accounting practices make it very difficult to accurately measure the cost differences between a shorter and longer stay. In the IU study, professors were able to measure charges in each cost center of the hospital for services the patient used during her stay.
"Is a $280 savings worthwhile when you consider the costs of postpartum care, such as home care involving family and visiting nurses? Nurses go out and examine the mothers and their babies at home, and there are travel costs that should be factored into the equation," Tai-Seale said. "We also need to consider the loss of good will among patients when the hospitals push for a shorter length of stay. The practice of drive-through delivery has fueled much of the country's backlash against managed care. When you factor all the costs, they can outweigh the benefits."
(George Vlahakis, 812-855-0846, gvlahaki@indiana.edu)