KSTP Investigation: The High Cost of Giving Birth

Updated: 04/28/2014 11:39 PM
Created: 04/17/2014 11:10 AM
By: Naomi Pescovitz

It is supposed to be one of the happiest days in your life, the day you bring home your new baby boy or girl. It may also be one of the most expensive. When it comes to birth, Americans outspend almost every other nation.

Giving birth is the most common reason for hospitalization in America and the cost is going up. According to a study by Truven Health Analytics, out of pocket costs increased nearly fourfold between 2004 and 2010.

Every eight seconds, a baby is born in America. A vast majority begin their lives at a clinic or hospital.

Fifteen-month-old Aliyah Treadwell came into the world just as thousands of babies do every day.

"Babies are expensive, you have to get furniture and diapers and bottles and everything else," said Aliyah's mom, Maria Treadwell.

To find out just how expensive, you have to go back to the day she was born. A hospital admission bill rang up at more than $8,000. Maria also received a tally of other fees.

"It totaled up to $10,000 or something like that when I did the math. ... Just for two days to push out a baby," Treadwell said.

"$10,000 later, I basically had a fancy hotel stay," Treadwell said.

Though most of her bills were paid through insurance, Treadwell was rattled by the dozens of explanation of benefit forms which she feels didn't explain much at all.

"Why was it $10,000, when I did all the work," Treadwell said.

In Anoka, Cheri Ponto wondered too, "How that could cost so much when they really didn't do anything? I did all the work."

When Ponto's 5-year-old daughter Chloe was born, an uneventful hospital delivery cost $13,000. With insurance, they paid $4,000 to $5,000.

"That's why I've never understood when they say, the doctor delivers. No, they catch," Ponto said.

Minnesota Cost of Birth

According to the Minnesota Hospital Association Price Check website, Minnesota's 2012 average cost of vaginal birth without complications was $10,132. For a cesarean section, the average was $17,480.

The Truven Health Analytics Study compared rates in several states in 2010. Minnesota fell right in the middle between Louisiana, Illinois, California and Massachusetts.

Around the World

A trip around the world tells another story.

A 2012 study from the International Federation of Health Plans compared the average costs of health care in the United States to countries like Australia, France, the United Kingdom and Spain.

The U.S. average cost for vaginal birth was $9,775 compared to $6,846 in Australia, $3,541 in France, $2,641 in the United Kingdom and $2,265 in Spain.

Poor Outcomes

Though Americans are spending top dollar, many American babies won't see the fruit of their mothers' labor.

Dr. Katy Kozhimannil is an assistant professor at the University of Minnesota's School of Public Health who has spent years researching the policies behind child birth and the costs.

"Many of the countries that we outspend, many fold, in health care related to child birth, actually have better outcomes," Kozhimannil said.

According to data from the Central Intelligence Agency, the infant mortality rate in the U.S. is higher than Australia, France, the United Kingdom and Spain. American maternal mortality rates are higher too.

Lack of Transparency

Kozhimannil says the problem is partly driven by inconsistency and unanswered questions.

"I think the first thing in terms of price information that tends to surprise expectant mothers is the lack of it," Kozhimannil said.

"It's not like going to get your car repaired. You may have insurance and you know what your deductible is and you go in, you find out what's wrong with your car and they tell you how much its going to cost to fix it," Kozhimannil said.

Kozhimannil says the health care system is not set up for transparency for patients or clinicians.

"When they do ask the question, of how much is this going to cost, the answer is often difficult to find," Kozhimannil said.

To find out why, KSTP asked Allina Health, HealthEast, HealthPartners, Northfield Hospital & Clinics, Ridgeview Medical Center and Fairview Health Services to sit down for interviews. They all turned us down.

Most issued a statement and referred us to the Minnesota Hospital Association instead. Read the statements from local hospitals here.

"No one said having a baby was going to be cheap," said Wendy Burt, Vice President of Communications & Public Relations for the Minnesota Hospital Association.

Burt says Minnesota offers high levels of care based on the prices Minnesotans pay.

We asked if $9,000 or $10,000 is a fair and appropriate cost for childbirth.

"The first thing I would say is the price is going to vary for every consumer. Fortunately for an expectant mother, she'll have time to do some planning for this," Burt said.

Burt explained that each insurance plan is different, even within the same insurance company. Employers negotiate separate plans so she says consumers should work with their insurers to comprehend costs.

"I understand that it's challenging to navigate the cost of health care and I think that the Affordable Care Act, and I think that the fact that more people have high deductible health plans, is going to help drive more transparency in pricing," Burt said.

The Patient's Role

Both Ponto and Treadwell are adding to their families once again. This time, Ponto chose to give birth at home, saving some of the cost.

"Once we started looking at midwives and the options, it was so much cheaper, that it just made sense to go with a midwife," Ponto said.

"This baby is far more expensive than my first one was," Treadwell said.

This time around, Treadwell carefully thought through every test and ultrasound.

"We tried not to go to the doctor as early, we try to limit our appointments just because I don't think all of them are necessary," Treadwell said.

Since 2007, a Minnesota law has required hospitals to give patients a "good faith estimate" on how much a procedure or visit will cost. How much a patient pays out of pocket depends on insurance and any complications.

Some states have enacted transparency laws for hospitals and this month, the Center for Medicaid and Medicare Services released physician billing data.

However, questions from consumers and patients will likely drive transparency in the medical system.

"When patients have better information about both the medical benefits and the financial costs, they can then make better decisions about value," Kozhimannil said.

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