Variation in Health Care Prices: The Problem Starts at Birth
Empowering Health Care Consumers
May 6, 2021
The price of childbirth in New York City varies multifold, depending on where a woman delivers.
This variation in price across boroughs, and across providers within boroughs, might make sense if it corresponded to higher-quality care. But higher prices do not always signify better quality.
This report examines variation in what is paid for childbirth in each of the five boroughs of New York City in 2017, using data on vaginal and cesarean deliveries in the Health Care Cost Institute commercial claims database. It also explores how much could be saved if price caps were used to reduce prices.
Extensive variation in childbirth prices also opens opportunities for exploring ways to rein in the highest prices while maintaining or improving quality, including value-based insurance benefit designs and alternative payment models. The report highlights some models being tested in New York State and throughout the country to protect expectant mothers 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.
- There is wide variation in prices for childbirth across New York City boroughs. In 2017, there was a 30% difference in median prices for vaginal deliveries between Brooklyn ($12,718) and the Bronx ($16,632).
- Substantial variation exists even within boroughs, with the highest-priced deliveries costing more than 13 times the lowest-priced deliveries 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.