5 slides: Are bundled payments the future of maternal health care funding?

To grapple with its world-leading rates of maternal mortality, U.S. health industry leaders are discussing ways to reform the country’s payment system for maternal health services in order to both cut costs and provide better care for mothers.

Texas has some of the highest rates of maternal mortality in the country. At State of Reform’s “5 Slides We’re Watching” event last week, Ken Janda, principal at Wild Blue Health Solutions, Tami Hutchison, senior director of Signify Health and Andrea Balogh, the Texas division president for Women’s Health USA discussed ways to transform the state’s maternal health payment model to optimize outcomes for mothers, physicians and providers.


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One proposed solution is to utilize models that fund “episodes” of care, or bundled payments, to fund the entire episode of maternal health care — from prenatal to postpartum care. Janda is the former CEO of Community Health Choice, which was the first organization to implement such funding models for maternal health in Texas.

Janda said bundled payment methodology is getting increased attention, but he would like to see it be implemented more. He wants childbirth to be seen as a family or a human event, rather than strictly medical — and he wants its funding to reflect that.

“Childbirth is a natural part of being human, and we don’t need to treat it like we treat a disease. It’s not a disease, and yes, it can be expensive and you want to have insurance for the potential for a bad outcome, [but] it’s a little bit of a different kind of thing that we need to think about and so these community activities and social influencers I think are really important.”

Janda explained that a maternal health episode consists of three main sections: prenatal care, labor and birth and postpartum care. The episode should encompass both care to the mother and to the baby.

“I think one of the great opportunities with episodes is that you can think about things that might normally not be covered by insurance in terms of doulas or other care coordination, or other education services that I think — and most of us think — are just as important as, ‘Did you get your ultrasound?’”

Hutchison, a leader in bundled care funding through her work at Signify Health, said bundled payments can “create momentum and relevance to both the payers as well as the providers.”

She said one way to use bundled payments to improve maternal health care is by ensuring the payment includes adequate funding for prenatal care. According to Hutchison, C-sections cost around 50% more than traditional vaginal births, and high-level neonatal intensive care unit (NICU) placements can significantly increase cost. Texas’s rates of C-sections and NICU occupancies are higher than the national average.


Image: Tami Hutchison, Signify Health


This offers a critical cost-saving opportunity, she explained, as C-sections are sometimes performed unnecessarily and can be avoided if proper prenatal care is provided. Furthermore, many babies are placed in higher NICU levels than necessary. Level 4 NICU care can be 50 times more expensive than Level 1 care, she said.

“So if the baby doesn’t need to be in level 4 to begin with, obviously we want to provide the incentive for the baby to not be placed in a level 4 bassinet.”

She explained these gaps in care can be addressed through a properly constructed bundled care payment that includes funding to improve prenatal health outcomes.

Janda also spoke to the benefit of increased prenatal care funding:

“Spending an extra $500 on good prenatal care and getting a woman to a maternal fetal specialist as that’s necessary is certainly worth it if you can save $50,000 of NICU costs. That’s why you want to look at the entire bundle.”

According to Janda, insufficient access to care for racial minority mothers is a key driver of the country’s struggles with maternal mortality. 

“…we don’t do nearly as well with people with lower income status, in terms of providing them with continuity of care to services. Frankly, the browner or blacker your skin is in the United States, the worse your health outcomes are. When you start teasing apart those health outcomes, you do see significant variation by ethnicity, race and income.”

Balogh shared similar concerns. She says the U.S. needs to be more successful in “meeting mothers where they are” by increasing outreach efforts using funding from bundled payments that prioritize these efforts.

According to Balogh, racial minority mothers might be hesitant to reach out to a provider to schedule an appointment and opt for the emergency room instead, even if it’s not necessary. She says building trust among these communities is key to solving this issue because with adequate resources, underserved mothers can receive appropriate care that will yield better results for patients and save money from unnecessary emergency room visits.

She said extending the hours of health facilities and providing in-need community members with transportation are examples of extra steps to ensure these communities feel comfortable accessing care and aren’t left behind. Providers can also ensure child care is provided for patients and that services are offered in the patient’s native language.

A critical part of these efforts will have to do with the workforce, she said. Future maternal health funding should include a hefty increase in staff in the form of physicians, nurse practitioners, nurse midwives, transportation coordinators and more.

Janda added that this workforce must be more diverse and represent the populations it serves. Black and Indigenous people of color, for instance, should make up a good portion of the maternal health care workforce.