Mode of Delivery: a Pilot Cost Analysis

Abstract

Introduction: Provision of qualified and affordable obstetric services is considered a high priority for Armenia. The Ministry of Health (MOH) of Armenia implemented the Obstetric Care State Certificate (OCSC) Program in 2008 to provide free obstetric services to pregnant women. The current official reimbursement for Cesarean Section (CS) within a hospital is about 1.6 times higher than the reimbursement for Vaginal Delivery (VD) in Armenia. From 2008 to 2010 the rates of CS in Armenia increased from15.0% to 18.6 which might be either a result of OCSC Program or just a historical trend. The increasing rates of CS in Armenia should alarm the health policy and decision makers, because the current rate already exceeds the World Health Organization recommended level of medically necessary CSs (10-15% of all live births). With the increase of CS rates, the medical risks for both mother and infant health also increase. The study hypothesized that reimbursement for CS was higher than the real cost and the upward CS trend in Armenia could be due to this higher reimbursement. The objective of the study was to estimate the mean direct variable cost of CS and VD from provider perspective and to compare the ratio of these costs with the ratio of the MOH reimbursement. Methods: The study was a hospital based cost accounting cross-sectional pilot study. The study used the bottom-up approach for the cost analysis. For calculating the mean cost the study considered only direct variable costs: costs of medicines, tests, supplies and labor cost. Reimbursement for CS and VD was explored looking at average bonus payments to providers. Two secondary level of specialization maternity hospitals agreed to participate in the pilot study. The study performed retrospective review of mother and child hospital records to derive information about utilized medicines, tests and length of stay, and self-administered questionnaires for providers to collect information about utilized medical supplies/disposables, average time spent per delivery and bonus payments. “PharmInfo” software program price list was used to calculate costs of utilized medicines and medical supplies/disposables. Laboratoryinstrumental tests’ price list from each maternity hospital provided information for calculating the costs of tests. Results: The mean direct variable cost was 2.3 times higher for performing CS than VD. The ratios of tests (2.1), medical supplies/disposables (2.8), labor cost of all specialists [except obstetrician-gynecologists - OBGYN] (1.4-2.1), length of stay (1.5), bonus payment to all specialists [except OBGYN] (1.3-1.6) were much closer to the reimbursement ratio by the MOH (1.6). However, there were substantial differences in ratios of the cost for utilized medicines (4.4), labor cost for OBGYN (0.7) and bonus payment to OBGYN (11.4) compared to the reimbursement ratio by the MOH. Conclusion: The OBGYNs, who are the main decision makers for the mode of delivery, could have a financial motivation for performing CS. This finding suggests that the increasing rates of CSs in the secondary level of specialization maternity hospitals could be at least partially related to bigger financial incentives for performing CSs.