The costs and financing of perinatal care in the United States

Objectives. The purpose of this study was to estimate the aggregate annual costs of maternal and infant health care and to describe the flow of funds that finance that care. Methods. Estimates of costs and financing based on household and provider surveys, third-party claims data, and hospital discharge data were combined into a single, best estimate. Results. The total cost of perinatal care in 1989 was $27.8 billion, or $6850 per mother-infant pair. Payments made directly by patients or third parties for this care totaled $25.4 billion, or about 7% of personal health care spending by the nonaged population. Payments were less than costs because they did not include a value for direct delivery care or for bad debt and charity care, which accounted for $2.4 billion. Private insurance accounted for about 63% of total payments, and Medicaid accounted for 17% of the total. Conclusions. National health reform would provide windfall receipts to hospitals, which would receive payment for the considerable bad debt and charity care they provide. Reform might also provide short-term gains to providers as private payment rates are substituted for those of Medicaid. (Am J Public Health. 1994;84:1473-1478)
Costs of medical care can be estimated and evaluated in a number of ways. Using a more complex method, an estimate of the total cost of obstetrics, gynecology, prenatal care, hospitalization for labor and delivery and other related health services for mothers and newborns totalled about $27.8 billion in the US in 1989. This averages to $6,850 per mother and infant. The method used to calculate this estimate included more specific information than most other estimates. It was based not as much on charges assigned, but on actual payments and costs. It also used administrative records to estimate service provision, analyzed by individual occurrence as much as possible. In addition, this analysis looked at sources of payment and the results indicate that almost $2 billion in costs were paid by third party private payers, even though they were not costs to patients of private payers. This appears to be cost-shifting from non-paying or partial-paying patients. This situation may have changed after 1989, when Medicaid expanded its coverage of pregnant women and infants.