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Charges for maternity services: associations with provider type and payer source in a university teaching hospital
CHARGES FOR MATERNITY SERVICES: ASSOCIATIONS WITH PROVIDER TYPE AND PAYER SOURCE IN A UNIVERSITY TEACHING HOSPITAL Catherine A. Carr,
CNM, DrPH
ABSTRACT Objectives: Considerable evidence exists that payer status influences the type and cost of services provided. If payer status influences care, consumers may receive differential care secondary to presence and type of payer. This study examines the effect of payer status on certified nurse-midwives (CNMs) and obstetricians (OBs), correcting for methodologic problems that have been noted in previous studies. Methods/findings: Participants were 715 low-risk pregnant women seen in the CNM or OB practice in a university hospital service. All billed charges from the initial prenatal visit through two months postpartum were compared by payer. Charges by provider were also examined to determine the presence of differential payer effect. Unexpectedly, charges by payer did not show significant variance, nor did payer differently affect providers. Charges by provider type varied significantly, with CNMs having lower mean charges than OBs. Conclusions: Differences in practice by payer source were not found for either provider group. This may reflect a lack of financial incentives to alter practice based on the payer, the homogeneity of the participants, or the large number of payers. The findings indicate that provider decision-making styles are likely due to non-payer factors in a system that lacks clear incentives to alter care patterns. J Midwifery Womens Health 2000;45:378 – 83 © 2000 by the American College of NurseMidwives. INTRODUCTION
In the current climate of cost containment in health care, there is ongoing pressure to curtail expenditures while maintaining high quality services. Although high quality at a low cost is the goal of policy makers, payers, and consumers alike, the care that is provided is heavily dependent on the practice styles of health care practitioners (1–3). Practice styles vary significantly by type of provider, practice specialty, and provider perception of incentives to restrict or intensify care (4,5). Additionally, insurance or third party payer status influences provider practice patterns, thereby affecting the type and process of health care provided (6 – 8). Despite the availability of research examining the effect of payer on practice, methodologic problems that have made evaluation of the literature difficult include: noncomparable provider and Address correspondence to Catherine A. Carr, Seattle, WA 98195-7262.
378 © 2000 by the American College of Nurse-Midwives Issued by Elsevier Science Inc.
CNM, DrPH,
Box 357262,
patient groups, retrospective chart review as the only data source, inability to assess and screen women for risk, and failure to conduct risk screening at entry into study (9,10). This study attempts to correct for these problems in an examination of the effect of payer status on two different types of provider, certified nurse-midwives (CNMs) and obstetricians (OBs).
BACKGROUND
Service delivery for pregnant women offers an opportunity to examine the effects of payer status on provider decisions. Childbirth is the most common discharge diagnosis in short stay hospitals and pregnancy related services consume considerable resources in both inpatient and ambulatory care. Over 80% of women between ages 15 and 44 years are covered by some form of third party payer for health care services, and virtually all third party payment includes some coverage of maternity care (11,12). In the United States, differences in provider decisions about care for low risk maternity populations are frequently not associated with medical indications (13–15). Discretionary use of health care services occurs in both ambulatory and inpatient settings (16). Common ambulatory services that have been reported to differ by provider include the use of laboratory tests, genetic screening, ultrasound studies, and use and intensity of antenatal fetal surveillance. Inpatient variation is seen in the use of maternal and fetal monitoring, delivery room, analgesia and anesthesia, episiotomy and operative delivery, and length of hospital stay (9,17,18). A stated goal of third party payers is to significantly influence the ways that providers practice in order to reduce costs (19). Strategies developed by insurers to reduce or contain costs to the third party payer include substitution of generic drugs, denial of “experimental” therapies, and larger co-payments for accessing providers outside the insurance plan. Payers of health services may also influence the location of services by offering differential rates of payment for inpatient and outpatient services, or by only paying for services performed in a specific institution or geographic location (20,21). In
Journal of Midwifery & Women’s Health • Vol. 45, No. 5, September/October 2000 1526-9523/00/$20.00 • PII S1526-9523(00)00042-8
maternity inpatient care, the place of service for the same procedure may differ. For example, providers may choose to use the delivery room for a spontaneous vaginal delivery rather than the labor or birthing room, with delivery room charges nearly three times that of the labor room (Hall J, Billing Manager Department of Obstetrics and Gynecology, personal communication, September 22, 1992). In addition, reimbursement varies widely with different payer coverage. For example, criteria for “elective” procedures such as amniocentesis and repeat ultrasounds often differ. Providers may be reluctant to order services that are not reimbursed, or are reimbursed at a lower rate. Although at least one antenatal ultrasound is common in maternity care, payers may require prior authorization for additional ultrasound studies, and prior authorization may increase the time and “hassle factor” to the extent that it affects use of a procedure. The same constraints exist for fetal surveillance testing. Third party payers may have a category for “high risk pregnancy” that provides additional coverage for such services as nonstress testing, biophysical profiles, and more frequent ultrasonography. The criteria for “high risk” vary, however, and prior authorization from the payer may be required for common problems in pregnancy. The aim of this study was to investigate the influence of payer source (third party insurance or self-pay) on maternity services as measured by charges when the providers were all salaried employees of the same tertiary care hospital. A secondary aim was to determine whether insurance status influenced CNMs and OBs differently. METHODS
Site and Providers The data were obtained from a larger study comparing CNM and physician processes of care and outcomes between 1988 and 1993. The methodology has been described in detail elsewhere (18,23). Briefly, the study focused on the maternity service provided by CNMs and OBs at a midwestern university medical center. The CNMs and OBs were all salaried employees at the university health science center and professional charges for services were the same for both groups of providers. During the time of the study, there were no financial incentives for increasing or decreasing the numbers of Catherine Carr is an assistant professor at the University of Washington in Seattle. She completed midwifery education at Frontier School of Midwifery and Family Nursing and an MSN at the University of Kentucky in 1979. She has practiced in a variety of settings. Since receiving her DrPH from the University of Michigan in 1993, she has been involved in midwifery education at Education Programs Associates and the University of Washington. She remains active in clinical practice.
TABLE 1
Eligibility for Particpation: Exclusion Criteria Diabetes mellitus (insulin dependent) Isoimmunization Hypertension, if on medication at time of pregnancy Cardic disease Chronic renal disease Chronic lung disease (emphasema, uncontrolled asthma, active TB) Drug addiction Alcoholism (current drinking) Seizure disorder if on medication Psychiatric disorder if on medication Multiple gestation Planned cesarean delivery from beginning of pregnancy
patients or the intensity (amount or level) of services for either provider group (Schwartz A, Department Administrator of Obstetrics and Gynecology, personal communication, July 1993). Participants Study participants were drawn from the population of women registering for prenatal care in the maternity service. To ensure similar initial risk status, potential participants were screened for obstetrical risk prior to entry into the study. Only women who met the criteria for low risk CNM care were eligible for the study. See Table 1. In accord with the University’s Human Subjects Review Committee, the clinic nurse reviewed the study and obtained informed consent from the participants. Participants were enrolled in their service of choice, either CNM or OB. Study participation rates of the eligible women were 84% (N ⫽ 471) for the CNM service and 73% (N ⫽ 710) for the OB service. Participants in the two groups did not differ by age, education, locus of control, partner satisfaction, circumcision plans, or breastfeeding decisions. The average participant was 29 years old, had 15 years of education, an annual family income between $30 – 40,000 and had 1.2 children. Participants were primarily European-American (87%), and 92% were married. At the time of enrollment, almost all of the participants were in early pregnancy. The current analysis used data from the first 715 participants who completed the study; enrollment in care through 2 months postpartum. The percentage of cases missing pieces of demographic data ranged from 2% (number in household) to 10% (marital status). No subset of subjects by payer or provider had all the missing data; there was a scattering of missing information among the subjects. Information on total charges, use of services, and charges for services was complete in that it was available from hospital billing records.
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An intention-to-treat approach prevented the CNM group from being artificially at lower risk due to the transfer of higher risk patients to the physician caseload. Participants who became high risk after study enrollment and were subsequently co-managed by the nurse-midwife and physician or transferred from the CNM to physician management, remained in the original provider group for analysis. Data Source Data on all charges came from two hospital-based sources: hospital billing records and professional service records. Hospital charges included all services provided during the pregnancy and through 2 months postpartum. Information available from hospital billing records included the mother’s identification, the service provided, date of service, a fee code for the service, a description of the service, the amount charged, and whether the service was inpatient or outpatient. Hospital charge data were quite specific and included each laboratory test, procedure, or prescription by description, fee code, and charge. Inpatient charges for place of delivery included a designation by time of use in increments of 15 minutes for the delivery room and 30 minutes for the labor room. Professional service charges for prenatal, intrapartum, and postpartum care were each bundled into an inclusive charge. Professional service fees were the same for all providers; therefore, variation in total professional charges was the result of additional charges incurred from referrals or services beyond routine perinatal care. Additional professional service fees commonly charged to patients during the study included those from departments of obstetrics (for perinatology consultation), radiology, pediatrics, anesthesia, and pathology. For both CNMs and OBs, all billed charges from the initial prenatal visit through 2 months postpartum were included in the analysis. Charges were obtained from institutional records in order to include all charges incurred during the perinatal period. There was no attempt to eliminate charges unrelated to pregnancy because of the difficulty in ascertaining whether a particular service or procedure was indirectly related to complications of pregnancy.
TABLE 2
Payer Source and Provider Source
MD N‡ (%)
CNM N‡ (%)
UHMO* Commercial Other HMO/PPO† Self-pay Medicaid
199 (42) 138 (29) 76 (16) 49 (11) 10 (2)
99 (41) 71 (29) 17 (7) 30 (12) 26 (11)
* University health maintenance organization. † Preferred provider organization. ‡ Number.
charge data for each study participant. Category of payer by provider is shown in Table 2. Charges Because effects on the charges in one charge category could be obscured by the lack of effects in another, total outpatient, inpatient, and professional charges were examined separately to determine if there were differences by payer in each category. Additional service charges that were analyzed included charges for amniocentesis, epidural anesthesia, nonstress test, ultrasound (limited or complete), place of delivery (labor room or delivery room), mode of delivery (spontaneous vaginal, forceps or vacuum assisted, or cesarean), and length of stay (birth hospitalization billable days). STATISTICAL ANALYSIS
The software program SPSS-PC was used for statistical analysis (24). Institutional record transfers were edited to include only charges for the specified perinatal period. Raw data were transformed into summary variables to permit separate analysis of hospital and professional charges. Analysis of variance (ANOVA) was used to measure the main and interaction effects of the independent variables, payer and provider on the dependent variables of charges for outpatient care, inpatient care, and professional services, with p ⬍ .05 denoting statistic significance.
Payer Source
Results
The payer source data was obtained from the university hospital information system. Payer source data included patient identification, employment status, specific payer source, and secondary payer source, if any. The patient billing office for the department of Obstetrics and Gynecology was consulted for verification of payer type for all commercial payers. Payer source data were linked to the
Charges did not vary significantly by payer source (p ⫽ .358). Mean charges by payer group did not significantly differ in any of the three main charge categories— outpatient (p ⫽ .749), inpatient (p ⫽ .749), and professional service fees (p ⫽ .096). No payer consistently had either the highest or lowest charges for all three charge categories. See Table 3. When the mean charges by payer
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TABLE 3
Mean Charges by Payer Source for Outpatient, Inpatient, and Professional Fee Categories Payer Source
N‡
Outpatient
Inpatient
Professional
Total
UHMO* Commercial insurer Other HMO/PPO† Self-pay Medicaid
298 209 93 79 36
$1,322 $1,295 $1,221 $1,061 $ 774 0.482 4 0.749
$5,161 $4,082 $5,530 $4,121 $6,582 1.298 4 0.749
$3,226 $3,102 $3,380 $3,018 $3,355 2.636 4 0.096
$8,582 $8,148 $8,080 $7,558 $9,729 1.296 4 0.358
F df p * University health maintenance organization. † Preferred provider organization. ‡ Number.
group were examined, there were no statistically significant differences between payer groups for any of the charge categories. There were, however, significant differences in charges by provider type (p ⬍ .000), with CNMs having lower mean charges for all charge categories. See Table 4. When two-way ANOVA was used to measure main and interaction effects of the independent variables “payer” and “provider” on specific interventions, the payer “U-HMO” had a significant effect on charges for nonstress tests (p ⬍ .05), but this was the only charge significantly affected by payer group. There were, however, significant effects of provider type on charges for limited ultrasound, complete ultrasound, epidural, and place of delivery (p ⬍ .05), with CNMs having lower charges. Length of stay did not vary by payer source, however, CNM patients had a shorter mean length of stay, 2.14 days vs. 3.72 days for OB patients (p ⬍ .05). The demographic variables of income, age, education, number of prior pregnancies, number of living children, household size, race, and marital status on charges were examined using one-way analysis of variance and twoway ANOVA. There were no significant differences in any of these groups by either payer or provider. DISCUSSION
The study did not find differences in provider practice by payer source reported in previous studies (25–27). Prior
investigations have noted differences in charges by provider, with nurse-midwives having lower charges (22,28,29); however, the effect of payer source on the practice styles of midwives and obstetricians in these studies was not examined. There are several possible explanations for the lack of differences observed here. Notably, the CNM and obstetrician providers were all salaried employees of the same tertiary care hospital. During the time of the study, there were no monetary incentives for either provider type to intensify or limit services. Additionally, the providers had work schedules that included intrapartum “on call” time distinct from office hours, which may have decreased incentives to alter practice in order to have additional office time or more time off. Removing the incentives to alter the level of services may have shielded the providers from the payer effect. The providers themselves may have different characteristics than those who are in private practices (30,31). Those who elect to work in a teaching and research institution may react differently to pressures from third party payers. The numbers for individual charges were often small, and this may have contributed to the lack of adequate power. In addition, the sample in this study was homogeneous on demographic variables; thus, it is possible that differences in provider practice observed in other studies were actually due to differences in participant characteristics and preferences. Women may have self-
TABLE 4
Mean Charges by Provider ($) Provider
Outpatient
Inpatient
Professional
Total
Certified nurse-midwife Obstetrician
883 1,432 46.286 1 0.000
4,058 5,576 36.719 1 0.000
2,971 3,334 26.222 1 0.000
7,910 10,341 34.562 1 0.000
F df p
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selected for either physician or nurse-midwife care for reasons not measured in the study. The institution in this study then, may have acted much like a staff-model HMO. In the staff-model, providers may be insulated from concern about specific charges due to the capitated system of payment; but in the study institution, the insulation may be due to a large and complex bureaucracy that is involved in teaching and research as well as in patient care. The absence of penalties and the additional emphasis on teaching may have further removed providers from direct awareness of charges. How the structure of the institution insulates providers is probably less important than the fact that insulation occurs, minimizing the effect of payer on provider practice. The finding of lower mean charges in the CNM group has been observed and documented at length both in this study and others (21,23,28); and this finding persists after controlling for risk level. The lower charges seem to be closely associated with differences in the processes of care offered by CNMs and obstetricians (18). As observed in these studies, CNMs are less likely to initiate intervention in the care of low risk women. If women do not have IVs for example, they are more likely to ambulate during labor; making intermittent monitoring more likely and analgesia use less likely. The “cascade of intervention” may also become a cascade of costs as one intervention leads to another. Intention-to-treat analysis is particularly vital, as CNMs may provide care to women of lower medical risk than OBs. If women who transfer to physician care due to medical complication are not included in the original group as “intent to treat,” the CNM group becomes biased toward low risk and the OB group toward higher risk. It is possible, however, that the impact of CNM savings was, if anything, diluted by the effect of transferred and co-managed CNM patients having higher rates of OB-driven interventions. Finally, the inclusion of all charges occurring during the perinatal period eliminated the risk of artificially lowering total charges. Orthopedic referral for back pain, for example, could be due to pregnancy, the amount of standing and lifting done at work, or both. Women in the study were European-American, older, well-educated, and of higher than average income—a group more likely to have the resources to seek preferred services than would women with barriers of poverty, lower education, or language difficulties. The providers in the study work within an academic medical center. Much like a staff-model HMO, the institution “owns” the providers and practices. Similarly, academic medical centers are typically closed to providers who are not part of the institution. This closed system insulated providers from the effects of the third party payer, as does placement within an educational and
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research institution and its associated state and federal funding streams. Finally, the providers who choose to work in an academic medical center may have different incentives and disincentives than providers in other types of practice. CONCLUSIONS
When methodologic problems that have presented problems in the past are controlled, differences in practice appear to be more provider-related than payer-related. Future research comparing provider practices and the effects of payer source could include more diverse populations. Provider incentives vary by region, communities, or with a different mix of payer. Multi-site studies will improve the generalizability of findings. The complexity of provider decision-making needs to be examined within and between different structures of care— HMOs, fee-for-service plans, non-profit and for-profit institutions that are both HMO and fee-for-service, and various forms of preferred provider plans. If CNMs and certified midwives (CMs)* have practice styles resulting in lower charges while maintaining high quality, there will be additional opportunities for the midwifery* profession to expand (29). Nationally, third party payers of all types are attempting to cope with the frustration of consumers with rising costs of health benefits. Health care providers who can offer effective care with lower charges will be increasingly sought after and the incentives to use these providers will increase. This work is part of a project supported by the National Institute for Nursing Research, National Institutes of Health, Grant N. R01NR01887. As noted in the text, the Institutional Review Board at the University of Michigan approved this study and informed consent was obtained from all participants. The author wishes to thank Mona Lydon-Rochelle, CNM, PhD for her review and comments and Deborah J. Oakley, PhD, for ongoing support.
REFERENCES 1. Scott-Wright AO, Flanagan TM, Wrona RM. Predictors of cesarean section delivery among college-educated black and white women, Davidson County, Tennessee, 1990 –1994. J Nat’l Med Assoc 1999;91:273–7. 2. Wigton RS, Longenecker JC, Bryan TJ, Parenti C, Flach SD, Tape TG. Variation by specialty in the treatment of urinary tract infection in women. J Gen Intern Med 1999;14:491– 4. 3. Peipert JF, Hogan JW, Gifford D, Chase E, Randall R. Strength of indication for cesarean delivery: comparison of private physician versus resident service labor management. Am J Obstet Gynecol 1999;181:435–9.
* CNMs/CMs as used herein refer to those midwifery practitioners who are certified by the American College of Nurse-Midwives (ACNM) or the ACNM Certification Council, Inc.; midwifery refers to the profession as practiced in accordance with the standards promulgated by the ACNM.
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4. Grumbach K, Osmond D, Vranizan K, Jaffe D, Bindinan AB. Primary care physicians’ experience of financial incentives in managedcare systems. N Engl J Med 1998;339:1516 –21. 5. Pantilat SZ, Chesney M, Lo B. Effect of incentives on the use of indicated services in managed care. West J Med 1999;170:137– 42. 6. Freeman VG, Rathore SS, Weinfurt KP, Schulman KA, Sulmasy DP. Lying for patients: physician deception of third-party payers. Arch Intern Med 1999;159:2263–70. 7. Zimmerman RK, Mieczkowski TA, Raymund M. Relationship between primary payer and use of proactive immunization practices: a national survey. Am J Manag Care 1999;5:574 – 82. 8. Sclar DA, Robison LM, Skaer TL, Galin RS. What factors influence the prescribing of antidepressant pharmacotherapy? An assessment of national office-based encounters. Int J Psychiatry Med 1998;28:407–19. 9. Brown SA, Grimes DE. A meta-analysis of nurse practitioners and nurse-midwives in primary care. Nurs Res 1995;44:332–9. 10. Knedle-Murray ME, Oakley DJ, Wheeler JRC, Petersen BA. Production process substitution in maternity care: issues of cost, quality, and outcomes by nurse-midwives and physician providers. Med Care Rev 1993;50:81–112. 11. Alan Guttmacher Institute. Blessed events and the bottom line: financing maternity care in the United States. New York: The Alan Guttmacher Institute, 1987. 12. Long SH, Marquis MS, Harrison ER. The costs and financing of perinatal care in the United States. Am J Public Health 1994;84:1473– 8. 13. Stafford R. The impact of nonclinical factors on repeat cesarean section. JAMA 1991;265:59 – 63. 14. Oleske D, Glanden G, Giacomelli G, Hohmann S. The cesarean birth rate: influence of hospital teaching status. HSR: Hlth Ser Res 1991; 26:325–37. 15. Gabay M, Wolfe S. Nurse-midwifery: the beneficial alternative. Public Health Report 1997;112:386 –94. 16. Enkin M, Kierse M, Renfrew M, Neilson J. A guide to effective care in pregnancy and childbirth, 2nd ed. New York: Oxford University Press, 1995. 17. Margolis LH, Kotelchuk M. Midwives, physicians, and the timing of maternal postpartum discharge. J Nurse Midwifery 1996;41:29 –35.
18. Oakley D, Murtland T, Mayes F, Hayashi R, Petersen BA, Rorie C, Andersen F. Processes of care: comparisons of certified nurse-midwives and obstetricians. J Nurse Midwifery 1995;40:399 – 408. 19. Silverman EM, Skinner JS, Fisher ES. The association between for-profit hospital ownership and increased medicare spending. N Engl J Med 1999;341:420 – 6. 20. Egdahl R, Taft C. Financial incentives to physicians. N Engl J Med 1986;315:59 – 61. 21. Germano E, Bernstein J. Home birth and short-stay delivery: lessons in health care financing for providers of health care for women. J Nurse Midwifery 1997;42:489 –98. 22. Murray M. An economic analysis of the perinatal care charges of certified nurse-midwives and physicians. Dissertation. Ann Arbor: University of Michigan, 1992. 23. Oakley D, Murray ME, Murtland T, Hayashi R, Andersen F, Mayes F, Rooks J. Comparisons of outcomes of maternity care by obstetricians and certified nurse-midwives. Obstet Gynecol 1996;88:823–9. 24. SPSS-PC, 1992. Chicago: SPSS, Inc. 25. Stafford R. Cesarean section use and source of payment: an analysis of California hospital discharge abstracts. Am J Obstet Gynecol 1993;168: 1297–302. 26. Stafford R. The impact of nonclinical factors on repeat cesarean section. JAMA 1991;265:59 – 63. 27. Curtin SC, Kozak LJ. Decline in U.S. cesarean delivery rate appears to stall. Birth 1998;25:250 – 62. 28. MacDorman MF, Singh GH. Midwifery care, social and medical risk factors, and birth outcomes in the USA. J Epidemiol Community Health 1998;52:310 –7. 29. Dower CM, Miller JE, O’Neil EH, and the Taskforce on Midwifery. Charting a course for the 21st century: the future of midwifery. San Francisco, CA: Pew Health Professions Commission & the UCSF Center for the Health Professions, April 1999. 30. McGlynn EA. The effect of managed care on primary care services for women. Women Health Issues 1998;8:1–14. 31. Hartley H. The influence of managed care on supply of certified nurse-midwives: an evaluation of physician dominance thesis. J Health Soc Behav 1999;40:87–101.
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CNM, DrPH
ABSTRACT Objectives: Considerable evidence exists that payer status influences the type and cost of services provided. If payer status influences care, consumers may receive differential care secondary to presence and type of payer. This study examines the effect of payer status on certified nurse-midwives (CNMs) and obstetricians (OBs), correcting for methodologic problems that have been noted in previous studies. Methods/findings: Participants were 715 low-risk pregnant women seen in the CNM or OB practice in a university hospital service. All billed charges from the initial prenatal visit through two months postpartum were compared by payer. Charges by provider were also examined to determine the presence of differential payer effect. Unexpectedly, charges by payer did not show significant variance, nor did payer differently affect providers. Charges by provider type varied significantly, with CNMs having lower mean charges than OBs. Conclusions: Differences in practice by payer source were not found for either provider group. This may reflect a lack of financial incentives to alter practice based on the payer, the homogeneity of the participants, or the large number of payers. The findings indicate that provider decision-making styles are likely due to non-payer factors in a system that lacks clear incentives to alter care patterns. J Midwifery Womens Health 2000;45:378 – 83 © 2000 by the American College of NurseMidwives. INTRODUCTION
In the current climate of cost containment in health care, there is ongoing pressure to curtail expenditures while maintaining high quality services. Although high quality at a low cost is the goal of policy makers, payers, and consumers alike, the care that is provided is heavily dependent on the practice styles of health care practitioners (1–3). Practice styles vary significantly by type of provider, practice specialty, and provider perception of incentives to restrict or intensify care (4,5). Additionally, insurance or third party payer status influences provider practice patterns, thereby affecting the type and process of health care provided (6 – 8). Despite the availability of research examining the effect of payer on practice, methodologic problems that have made evaluation of the literature difficult include: noncomparable provider and Address correspondence to Catherine A. Carr, Seattle, WA 98195-7262.
378 © 2000 by the American College of Nurse-Midwives Issued by Elsevier Science Inc.
CNM, DrPH,
Box 357262,
patient groups, retrospective chart review as the only data source, inability to assess and screen women for risk, and failure to conduct risk screening at entry into study (9,10). This study attempts to correct for these problems in an examination of the effect of payer status on two different types of provider, certified nurse-midwives (CNMs) and obstetricians (OBs).
BACKGROUND
Service delivery for pregnant women offers an opportunity to examine the effects of payer status on provider decisions. Childbirth is the most common discharge diagnosis in short stay hospitals and pregnancy related services consume considerable resources in both inpatient and ambulatory care. Over 80% of women between ages 15 and 44 years are covered by some form of third party payer for health care services, and virtually all third party payment includes some coverage of maternity care (11,12). In the United States, differences in provider decisions about care for low risk maternity populations are frequently not associated with medical indications (13–15). Discretionary use of health care services occurs in both ambulatory and inpatient settings (16). Common ambulatory services that have been reported to differ by provider include the use of laboratory tests, genetic screening, ultrasound studies, and use and intensity of antenatal fetal surveillance. Inpatient variation is seen in the use of maternal and fetal monitoring, delivery room, analgesia and anesthesia, episiotomy and operative delivery, and length of hospital stay (9,17,18). A stated goal of third party payers is to significantly influence the ways that providers practice in order to reduce costs (19). Strategies developed by insurers to reduce or contain costs to the third party payer include substitution of generic drugs, denial of “experimental” therapies, and larger co-payments for accessing providers outside the insurance plan. Payers of health services may also influence the location of services by offering differential rates of payment for inpatient and outpatient services, or by only paying for services performed in a specific institution or geographic location (20,21). In
Journal of Midwifery & Women’s Health • Vol. 45, No. 5, September/October 2000 1526-9523/00/$20.00 • PII S1526-9523(00)00042-8
maternity inpatient care, the place of service for the same procedure may differ. For example, providers may choose to use the delivery room for a spontaneous vaginal delivery rather than the labor or birthing room, with delivery room charges nearly three times that of the labor room (Hall J, Billing Manager Department of Obstetrics and Gynecology, personal communication, September 22, 1992). In addition, reimbursement varies widely with different payer coverage. For example, criteria for “elective” procedures such as amniocentesis and repeat ultrasounds often differ. Providers may be reluctant to order services that are not reimbursed, or are reimbursed at a lower rate. Although at least one antenatal ultrasound is common in maternity care, payers may require prior authorization for additional ultrasound studies, and prior authorization may increase the time and “hassle factor” to the extent that it affects use of a procedure. The same constraints exist for fetal surveillance testing. Third party payers may have a category for “high risk pregnancy” that provides additional coverage for such services as nonstress testing, biophysical profiles, and more frequent ultrasonography. The criteria for “high risk” vary, however, and prior authorization from the payer may be required for common problems in pregnancy. The aim of this study was to investigate the influence of payer source (third party insurance or self-pay) on maternity services as measured by charges when the providers were all salaried employees of the same tertiary care hospital. A secondary aim was to determine whether insurance status influenced CNMs and OBs differently. METHODS
Site and Providers The data were obtained from a larger study comparing CNM and physician processes of care and outcomes between 1988 and 1993. The methodology has been described in detail elsewhere (18,23). Briefly, the study focused on the maternity service provided by CNMs and OBs at a midwestern university medical center. The CNMs and OBs were all salaried employees at the university health science center and professional charges for services were the same for both groups of providers. During the time of the study, there were no financial incentives for increasing or decreasing the numbers of Catherine Carr is an assistant professor at the University of Washington in Seattle. She completed midwifery education at Frontier School of Midwifery and Family Nursing and an MSN at the University of Kentucky in 1979. She has practiced in a variety of settings. Since receiving her DrPH from the University of Michigan in 1993, she has been involved in midwifery education at Education Programs Associates and the University of Washington. She remains active in clinical practice.
TABLE 1
Eligibility for Particpation: Exclusion Criteria Diabetes mellitus (insulin dependent) Isoimmunization Hypertension, if on medication at time of pregnancy Cardic disease Chronic renal disease Chronic lung disease (emphasema, uncontrolled asthma, active TB) Drug addiction Alcoholism (current drinking) Seizure disorder if on medication Psychiatric disorder if on medication Multiple gestation Planned cesarean delivery from beginning of pregnancy
patients or the intensity (amount or level) of services for either provider group (Schwartz A, Department Administrator of Obstetrics and Gynecology, personal communication, July 1993). Participants Study participants were drawn from the population of women registering for prenatal care in the maternity service. To ensure similar initial risk status, potential participants were screened for obstetrical risk prior to entry into the study. Only women who met the criteria for low risk CNM care were eligible for the study. See Table 1. In accord with the University’s Human Subjects Review Committee, the clinic nurse reviewed the study and obtained informed consent from the participants. Participants were enrolled in their service of choice, either CNM or OB. Study participation rates of the eligible women were 84% (N ⫽ 471) for the CNM service and 73% (N ⫽ 710) for the OB service. Participants in the two groups did not differ by age, education, locus of control, partner satisfaction, circumcision plans, or breastfeeding decisions. The average participant was 29 years old, had 15 years of education, an annual family income between $30 – 40,000 and had 1.2 children. Participants were primarily European-American (87%), and 92% were married. At the time of enrollment, almost all of the participants were in early pregnancy. The current analysis used data from the first 715 participants who completed the study; enrollment in care through 2 months postpartum. The percentage of cases missing pieces of demographic data ranged from 2% (number in household) to 10% (marital status). No subset of subjects by payer or provider had all the missing data; there was a scattering of missing information among the subjects. Information on total charges, use of services, and charges for services was complete in that it was available from hospital billing records.
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An intention-to-treat approach prevented the CNM group from being artificially at lower risk due to the transfer of higher risk patients to the physician caseload. Participants who became high risk after study enrollment and were subsequently co-managed by the nurse-midwife and physician or transferred from the CNM to physician management, remained in the original provider group for analysis. Data Source Data on all charges came from two hospital-based sources: hospital billing records and professional service records. Hospital charges included all services provided during the pregnancy and through 2 months postpartum. Information available from hospital billing records included the mother’s identification, the service provided, date of service, a fee code for the service, a description of the service, the amount charged, and whether the service was inpatient or outpatient. Hospital charge data were quite specific and included each laboratory test, procedure, or prescription by description, fee code, and charge. Inpatient charges for place of delivery included a designation by time of use in increments of 15 minutes for the delivery room and 30 minutes for the labor room. Professional service charges for prenatal, intrapartum, and postpartum care were each bundled into an inclusive charge. Professional service fees were the same for all providers; therefore, variation in total professional charges was the result of additional charges incurred from referrals or services beyond routine perinatal care. Additional professional service fees commonly charged to patients during the study included those from departments of obstetrics (for perinatology consultation), radiology, pediatrics, anesthesia, and pathology. For both CNMs and OBs, all billed charges from the initial prenatal visit through 2 months postpartum were included in the analysis. Charges were obtained from institutional records in order to include all charges incurred during the perinatal period. There was no attempt to eliminate charges unrelated to pregnancy because of the difficulty in ascertaining whether a particular service or procedure was indirectly related to complications of pregnancy.
TABLE 2
Payer Source and Provider Source
MD N‡ (%)
CNM N‡ (%)
UHMO* Commercial Other HMO/PPO† Self-pay Medicaid
199 (42) 138 (29) 76 (16) 49 (11) 10 (2)
99 (41) 71 (29) 17 (7) 30 (12) 26 (11)
* University health maintenance organization. † Preferred provider organization. ‡ Number.
charge data for each study participant. Category of payer by provider is shown in Table 2. Charges Because effects on the charges in one charge category could be obscured by the lack of effects in another, total outpatient, inpatient, and professional charges were examined separately to determine if there were differences by payer in each category. Additional service charges that were analyzed included charges for amniocentesis, epidural anesthesia, nonstress test, ultrasound (limited or complete), place of delivery (labor room or delivery room), mode of delivery (spontaneous vaginal, forceps or vacuum assisted, or cesarean), and length of stay (birth hospitalization billable days). STATISTICAL ANALYSIS
The software program SPSS-PC was used for statistical analysis (24). Institutional record transfers were edited to include only charges for the specified perinatal period. Raw data were transformed into summary variables to permit separate analysis of hospital and professional charges. Analysis of variance (ANOVA) was used to measure the main and interaction effects of the independent variables, payer and provider on the dependent variables of charges for outpatient care, inpatient care, and professional services, with p ⬍ .05 denoting statistic significance.
Payer Source
Results
The payer source data was obtained from the university hospital information system. Payer source data included patient identification, employment status, specific payer source, and secondary payer source, if any. The patient billing office for the department of Obstetrics and Gynecology was consulted for verification of payer type for all commercial payers. Payer source data were linked to the
Charges did not vary significantly by payer source (p ⫽ .358). Mean charges by payer group did not significantly differ in any of the three main charge categories— outpatient (p ⫽ .749), inpatient (p ⫽ .749), and professional service fees (p ⫽ .096). No payer consistently had either the highest or lowest charges for all three charge categories. See Table 3. When the mean charges by payer
380
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TABLE 3
Mean Charges by Payer Source for Outpatient, Inpatient, and Professional Fee Categories Payer Source
N‡
Outpatient
Inpatient
Professional
Total
UHMO* Commercial insurer Other HMO/PPO† Self-pay Medicaid
298 209 93 79 36
$1,322 $1,295 $1,221 $1,061 $ 774 0.482 4 0.749
$5,161 $4,082 $5,530 $4,121 $6,582 1.298 4 0.749
$3,226 $3,102 $3,380 $3,018 $3,355 2.636 4 0.096
$8,582 $8,148 $8,080 $7,558 $9,729 1.296 4 0.358
F df p * University health maintenance organization. † Preferred provider organization. ‡ Number.
group were examined, there were no statistically significant differences between payer groups for any of the charge categories. There were, however, significant differences in charges by provider type (p ⬍ .000), with CNMs having lower mean charges for all charge categories. See Table 4. When two-way ANOVA was used to measure main and interaction effects of the independent variables “payer” and “provider” on specific interventions, the payer “U-HMO” had a significant effect on charges for nonstress tests (p ⬍ .05), but this was the only charge significantly affected by payer group. There were, however, significant effects of provider type on charges for limited ultrasound, complete ultrasound, epidural, and place of delivery (p ⬍ .05), with CNMs having lower charges. Length of stay did not vary by payer source, however, CNM patients had a shorter mean length of stay, 2.14 days vs. 3.72 days for OB patients (p ⬍ .05). The demographic variables of income, age, education, number of prior pregnancies, number of living children, household size, race, and marital status on charges were examined using one-way analysis of variance and twoway ANOVA. There were no significant differences in any of these groups by either payer or provider. DISCUSSION
The study did not find differences in provider practice by payer source reported in previous studies (25–27). Prior
investigations have noted differences in charges by provider, with nurse-midwives having lower charges (22,28,29); however, the effect of payer source on the practice styles of midwives and obstetricians in these studies was not examined. There are several possible explanations for the lack of differences observed here. Notably, the CNM and obstetrician providers were all salaried employees of the same tertiary care hospital. During the time of the study, there were no monetary incentives for either provider type to intensify or limit services. Additionally, the providers had work schedules that included intrapartum “on call” time distinct from office hours, which may have decreased incentives to alter practice in order to have additional office time or more time off. Removing the incentives to alter the level of services may have shielded the providers from the payer effect. The providers themselves may have different characteristics than those who are in private practices (30,31). Those who elect to work in a teaching and research institution may react differently to pressures from third party payers. The numbers for individual charges were often small, and this may have contributed to the lack of adequate power. In addition, the sample in this study was homogeneous on demographic variables; thus, it is possible that differences in provider practice observed in other studies were actually due to differences in participant characteristics and preferences. Women may have self-
TABLE 4
Mean Charges by Provider ($) Provider
Outpatient
Inpatient
Professional
Total
Certified nurse-midwife Obstetrician
883 1,432 46.286 1 0.000
4,058 5,576 36.719 1 0.000
2,971 3,334 26.222 1 0.000
7,910 10,341 34.562 1 0.000
F df p
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selected for either physician or nurse-midwife care for reasons not measured in the study. The institution in this study then, may have acted much like a staff-model HMO. In the staff-model, providers may be insulated from concern about specific charges due to the capitated system of payment; but in the study institution, the insulation may be due to a large and complex bureaucracy that is involved in teaching and research as well as in patient care. The absence of penalties and the additional emphasis on teaching may have further removed providers from direct awareness of charges. How the structure of the institution insulates providers is probably less important than the fact that insulation occurs, minimizing the effect of payer on provider practice. The finding of lower mean charges in the CNM group has been observed and documented at length both in this study and others (21,23,28); and this finding persists after controlling for risk level. The lower charges seem to be closely associated with differences in the processes of care offered by CNMs and obstetricians (18). As observed in these studies, CNMs are less likely to initiate intervention in the care of low risk women. If women do not have IVs for example, they are more likely to ambulate during labor; making intermittent monitoring more likely and analgesia use less likely. The “cascade of intervention” may also become a cascade of costs as one intervention leads to another. Intention-to-treat analysis is particularly vital, as CNMs may provide care to women of lower medical risk than OBs. If women who transfer to physician care due to medical complication are not included in the original group as “intent to treat,” the CNM group becomes biased toward low risk and the OB group toward higher risk. It is possible, however, that the impact of CNM savings was, if anything, diluted by the effect of transferred and co-managed CNM patients having higher rates of OB-driven interventions. Finally, the inclusion of all charges occurring during the perinatal period eliminated the risk of artificially lowering total charges. Orthopedic referral for back pain, for example, could be due to pregnancy, the amount of standing and lifting done at work, or both. Women in the study were European-American, older, well-educated, and of higher than average income—a group more likely to have the resources to seek preferred services than would women with barriers of poverty, lower education, or language difficulties. The providers in the study work within an academic medical center. Much like a staff-model HMO, the institution “owns” the providers and practices. Similarly, academic medical centers are typically closed to providers who are not part of the institution. This closed system insulated providers from the effects of the third party payer, as does placement within an educational and
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research institution and its associated state and federal funding streams. Finally, the providers who choose to work in an academic medical center may have different incentives and disincentives than providers in other types of practice. CONCLUSIONS
When methodologic problems that have presented problems in the past are controlled, differences in practice appear to be more provider-related than payer-related. Future research comparing provider practices and the effects of payer source could include more diverse populations. Provider incentives vary by region, communities, or with a different mix of payer. Multi-site studies will improve the generalizability of findings. The complexity of provider decision-making needs to be examined within and between different structures of care— HMOs, fee-for-service plans, non-profit and for-profit institutions that are both HMO and fee-for-service, and various forms of preferred provider plans. If CNMs and certified midwives (CMs)* have practice styles resulting in lower charges while maintaining high quality, there will be additional opportunities for the midwifery* profession to expand (29). Nationally, third party payers of all types are attempting to cope with the frustration of consumers with rising costs of health benefits. Health care providers who can offer effective care with lower charges will be increasingly sought after and the incentives to use these providers will increase. This work is part of a project supported by the National Institute for Nursing Research, National Institutes of Health, Grant N. R01NR01887. As noted in the text, the Institutional Review Board at the University of Michigan approved this study and informed consent was obtained from all participants. The author wishes to thank Mona Lydon-Rochelle, CNM, PhD for her review and comments and Deborah J. Oakley, PhD, for ongoing support.
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