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May 6, 2021, New York, NY – What does it cost to have a baby in NYC? It depends where you live—and where you go to deliver. As families gather this weekend to celebrate Mother’s Day, for some moms in the Bronx, the price of delivering a baby was 30% more than for those living in Brooklyn.
The price of childbirth in New York City varies substantially, according to a new analysis from the New York Health Foundation (NYHealth). Research shows that prices and quality are often not related; that is, higher prices do not always mean better quality of care. Rather, higher prices typically mean more costs that are passed on to patients through increased premiums and deductibles.
“We have an irrational system in which health care prices are all over the map, with little relation to the quality of care or value,” said David Sandman, Ph.D., President and CEO of NYHealth. “Greater transparency could smooth out unjustified price variations and give patients a better idea of what they’ll pay for their care.”
Using data on vaginal and cesarean deliveries in the Health Care Cost Institute commercial claims database, the report examines variation in what is paid for childbirth in each of the five boroughs of New York City in 2017 (the most recent year of available data). It also explores the potential savings available if employers and other purchasers could cap the price of childbirths closer to the median price. Given that childbirth is one of the most expensive health care events for people under the age of 65, the implications of price reforms could be substantial.
Among the report’s findings:
- In 2017, there was a 30% difference in median prices for vaginal deliveries between Brooklyn (nearly $13,000) and the Bronx (nearly $17,000). Similar levels of variation exist for cesarean deliveries.
- Substantial variation exists even within boroughs, with the highest-priced deliveries costing more than 13 times the lowest-priced deliveries at hospitals within each borough.
- Capping prices for deliveries at the median or 75th percentile price for a delivery in a borough could lower the price per delivery by hundreds, if not thousands, of dollars for a substantial proportion of deliveries.
The report also highlights value-based insurance design models, such as tiered networks and bundled payments, being tested in New York State and throughout the country to protect expectant parents from high prices while ensuring they receive high-quality maternity care. These models can also be used to address excess price variation for other health care services like knee replacements or MRIs.
In addition, a newly enacted federal rule requires that hospitals make price information available on their websites so that patients can know ahead of time what they can expect to pay for care and comparison-shop across providers. And websites like ExpectNY are designed specifically to help expectant parents research hospital price and quality information before they deliver a child.
“Tackling the problems of wide price variation and limited price information could translate to lower health care costs, without jeopardizing the quality of care,” said Mark Zezza, Ph.D., NYHealth’s director of policy & research. “Maternity care offers a perfect test case for price-related innovation and experimentation given that childbirth is a common and costly health care event.”
The full report, “Variation in Health Care Prices: The Problem Starts at Birth,” is available here.
The New York Health Foundation (NYHealth) is a private, statewide foundation dedicated to improving the health of all New Yorkers, especially the most vulnerable. The Foundation is committed to making grants, informing health policy and practice, spreading effective programs to improve the health care system and the health of New Yorkers, serving as a convener of health leaders across the State, and providing technical assistance to its grantees and partners.