A new study, published in the open access journal BMJ Open, examined the costs of giving birth via cesarean section and vaginal delivery.  The researchers hoped to understand the variation in charges between hospitals for normal and discounted charges.  Specifically, they sought to identify the institutional and market-level characteristics that influence adjusted charges.

Using data from the California Office of Statewide Health Planning and Development (OSHPD), the researchers conducted a cross-sectional study of all privately insured patients admitted to California hospitals in 2011 for uncomplicated vaginal delivery or uncomplicated cesarean section.  Each of these types of deliveries is its own diagnosis-related group (DRG) and these are typically homogeneous groups.  Despite the anticipated similarity within each group, the study found wide variations in charges between hospitals and the variations are not well explained by observable patient or hospital characteristics.

According to an analysis of the study published in the Wichita Eagle, charges for a non-complicated vaginal delivery in California, the most populated state in the U.S., ranged from $3,296 to $37,277.  There was a similarly large variation for a non-complicated cesarean section, ranging from $8,312 to $70,908.  The discounted prices were, on an average, 37% of the normal charges.  One criticism of the study came from the senior vice president of health policy for the California Hospital Association who noted that the study had a design flaw by looking at charges before insurance.  Insurers have negotiated rates that may alter the similarity or predictability of charges.

Price transparency and helping consumers understand what they are paying to receive care was one of the goals of the Affordable Care Act.  The Centers for Medicaid and Medicaid Services (CMS), through its Center for Consumer Information and Oversight (CCIIO), explains that, under the Affordable Care Act, health insurers and group health plans will provide the 180 million Americans who have private insurance with clear, consistent and comparable information about their health plan benefits and coverage.

One of the methods for comparable information is a uniform document called the Summary of Benefits and Coverage (SBC).  The SBC is a concise document detailing, in plain language, simple and consistent information about health plan benefits and coverage.  Included in the SBC are coverage examples to walk through how the benefits would apply in a common medical scenario.  CCIIO likens the coverage example to a nutrition food label as a snapshot of what the package provides.  Having a baby is a coverage example included on the SBC and may help consumers understand, in such a varying market, how the insurance would work for them.