COLUMBIA, SC — By refusing to pay for elective early births, South Carolina’s Medicaid agency saved more than $6 million in the first quarter of 2013, according to a study released Thursday.
The study by the nonprofit Catalyst for Payment Reform examined the state’s Birth Outcomes Initiative, a joint effort by the S.C. Department of Health and Human Services, BlueCross BlueShield of S.C., the S.C. Hospital Association and the March of Dimes.
The concept of the initiative is to reduce the number of elective early births. Babies born before 39 weeks of pregnancy have much higher rates of low birth weight and infant mortality.
HHS, which administers Medicaid in the state, asked South Carolina’s hospitals to reduce early induction births except for medical reasons, and all of the state’s hospitals signed agreements to do so in 2011. HHS and BlueCross, which together pay for nearly 85 percent of births in the state, also stopped paying for voluntary early births.
At the time, state health officials said the ground-breaking initiative could result in healthier babies and $7 million in annual savings for the state Medicaid agency. The $6 million in savings in the Catalyst for Payment Reform study were for just three months. The agency has projected about $55 million in delivery and neonatal intensive care payments during the quarter but had about $49 million.
The study also indicated the number of unwarranted early inductions in the state had been cut by 50 percent and the number of babies in neonatal intensive care units had dropped. Babies born before 39 weeks of pregnancy generally have lower birth weights and higher rates of infant mortality.
“South Carolina’s many health care stakeholders across the public and private sectors came together to pay providers to deliver care that is best for babies, and not pay them to deliver care that can be harmful,” said Suzanne Delbanco, executive director of the Catalyst for Payment Reform.
Other states have voluntary programs, and some other state health agencies have stopped paying for non-emergency early deliveries. But South Carolina’s health leaders say they are the first state where a Medicaid agency, a major insurer and hospitals have collaborated on this type of program.
“The Birth Outcomes Initiative is a wonderful example of leaders in the health community working together as a team in South Carolina’s fight against premature birth,” said Gov. Nikki Haley.
Dr. Amy Picklesimer, an obstetrician with the Greenville Health System and the clinical lead of the Birth Outcomes Initiative, said that the fact South Carolina “has already garnered national attention and is being used as a model for other states to follow ... is telling of the success of the program.”
The initiative also provides incentives for screening pregnant women for risk factors such as substance abuse, domestic violence and depression.