Recommendations to close care gaps, improve quality and cost in OB/GYN

Insight Article - March 12, 2020

Population Health

Value-Based Operations

By Blair Freed, third-year medical student, Kansas City University, Kansas City, Mo.; Charles Coker, third-year medical student, Kansas City University, Kansas City, Mo.; Robert Steele, MS, third-year medical student, Kansas City University, Kansas City, Mo.; and Janis Coffin, DO, FAAFP, FACMPE, MGMA member, chief transformation officer, AU Health, Augusta, Ga.

More than 30% of expectant moms in the United States will deliver their babies via cesarean section (CS).1 According to the Centers for Disease Control and Prevention (CDC), population studies demonstrate that a CS rate higher than 10% to 15% does not improve perinatal outcomes. Furthermore, additional considerations for these surgeries include potentially serious complications including uterine rupture, hemorrhage and infection. Patients with a history of CS are predisposed to spontaneous preterm birth, abnormal placentation with future deliveries and abdominal strictures, among other issues.2 There are clearly serious risks physicians and patients must consider prior to a CS.

Looking at the greater scope of maternal care within the healthcare system, costs must be considered. Births via CS are a component of this, costing almost double that of a vaginal delivery for hospitals. They are also associated with a longer recovery stay in the hospital for patients, which also increases cost. Bundled payment plans and quality measures have been introduced and physicians face new pressures to adapt and comply with government programs to control costs while maintaining quality care.3 As evidence-based medicine is needed for payers to act in the best interest of patient and provider, one such study is the recent ARRIVE Trial.


From 2014 to 2018, a cohort of 22,000 low-risk nulliparous women were grouped and followed under the basis of elective induction of labor versus expectant management across 41 institutions. Those in the elective induction category were induced in the 39th week of pregnancy according to institutional protocols. The analysis, published in The New England Journal of Medicine in August 2018, showed a statistically significant decrease (22.2% to 18.6%) in the need for CS in these patients. Those induced did not have a higher rate of perinatal adverse outcomes when compared to the expectant management cohort. In addition to no negative effect on mortality and morbidity, the decreased need for CS resulted in quicker recovery times and shorter hospital stays.4

The ARRIVE Trial demonstrates an opportunity to lower costs and increase quality of care in certain patients. In light of these results, the American College of Obstetricians and Gynecologists (ACOG) released a statement in support of elective induction in low-risk nulliparous women at 39 weeks gestation. This statement emphasized that the treatment plan and induction be discussed and agreed upon fully by patient and provider.5

This information comes at a critical time when insurance and governmental agencies are moving toward bundled care plans that drive down overall cost and raise the standards for quality of care. With the evidence of the ARRIVE Trial and the ACOG recommendation, it is proposed that bundled payments in private companies as well as Medicaid consider implementing induction of labor at 39 weeks in certain patient populations as a treatment option to minimize cost and avoid potentially unnecessary CS.

Cost and quality implications for providers

Perinatal care cost varies significantly across the United States, and maternity care remains one of the primary reasons patients are hospitalized. Additionally, the rate of CS has increased over previous years. According to data from the Healthcare Cost and Utilization Project based on 2017 numbers, the average cost to hospitals for CS was $4,872 versus $2,862 for a vaginal delivery. The hospital charge for CS averaged $20,512 while vaginal deliveries came with a lower charge of $11,324. Compared to an induced pregnancy at 39 weeks, patients who undergo CS utilize hospital resources and beds for an extra day, accrue $2,010 extra cost for the hospital and add $9,188 extra cost to the patient.6

Implications for hospital systems

The length of hospital stay for vaginal deliveries is a day less than for CS (median length of 3.0 for cesarean sections and 2.0 for vaginal deliveries).7 Hospitals can consider the results of this trial in several ways. There is potential to reduce the length of stay per delivery, which serves to drive down cost and contribute to increased room capacity. The cost to the hospital with vaginal deliveries is lower than that of CS. Some limiting considerations, however, are the remaining costs associated with labor induction and potential limits surrounding staffing and capacity if the induction takes longer and results in a longer stay. Further studies may be needed to assess the specific cost-lowering effect of induction of labor.

Scope of impact

The result of this trial and the implications for future insurance payment developments stand to affect millions of women each year. According to the CDC, there were 3,855,500 births in 2017, with 32% involving CS — including an increase in the percentage of primary CS (21.9% in 2017 compared to 21.8% in 2016).8,9 If even a fraction of CS could be avoided and replaced with induced labor, millions of dollars could be saved for hospitals, payers and patients.

Insurance developments and associated considerations

The aforementioned information can be considered from the perspective of evolving insurance practices. Private insurance has declined for deliveries and poses a future risk for continued decrease in reimbursement. The Centers for Medicare & Medicaid Services (CMS) Center for Medicare and Medicaid Innovation introduced Bundled Payments for Care Improvement (BPCI) Advanced in recent years to promote new bundled payments that seek to improve healthcare quality and reduce expenses associated with care. This new program encourages providers and hospitals to utilize evidence-based research to consider protocols and programs within their practice to improve patient care while lowering cost.10

Looking at programs such as CMS’ Comprehensive Care Joint Replacement (CJR) Program, it isn’t out of reach to consider a future Medicaid OB-bundled payment plan incorporating evidence-based medicine, such as the results of this trial, to formulate a plan (similar to the CJR program) that can result in lower costs and improved perinatal quality of care.11 Several insurance companies are adopting and implementing maternity bundle packages. In 2018, Humana instituted a specialty bundled payment for the entirety of perinatal care with five OB/GYN practices. This included covering a commercial group member’s entire care from prenatal to post-delivery treatment in one wrap payment that incentivizes OB/GYNs whose patients achieve better outcomes. United Healthcare also launched value-based payment models in clinics under the U.S. Women’s Health Alliance.12 State Medicaid programs have begun to develop and institute their own episode payments for maternity care, with Arkansas, Tennessee and Ohio leading these new endeavors.13

A national precedent for bundled obstetric care could closely follow what has been implemented in recent years with joint replacement under the new voluntary bundled payment model. Participants in BPCI Advanced will be held to delivering care within a plan that maintains a target budget while maintaining quality of care. The incentive is additional compensation to providers who deliver care within the bundle at less than the target price while maintaining gold-standard quality measures.

Key takeaways

  • The ARRIVE Trial showed that decreased cesarean section rates can be achieved by performing elective induction in low-risk nulliparous women at 39 weeks gestation.
  • Current CS rate and cost is not conducive to declining private insurance reimbursement rates, healthcare’s impact on gross domestic product or associated maternal morbidities when compared to a vaginal delivery.
  • CMS and the Center for Medicare and Medicaid Innovation have introduced a BPCI Advanced Model that incentivizes targeting bundled payment costs associated with improving patient care while reducing costs.
  • The ARRIVE Trial stands as evidence-based medicine that can guide future development of bundled payment plans, improve patient quality of care, reduce negative outcomes associated with CS and drive down delivery costs via decreasing population CS rates when implemented correctly.

Future considerations

With the implementation and advancement of participants in bundled payments and the potential to improve patient outcomes, the ARRIVE Trial presents a critical consideration in model development and the possibility to utilize inductive labor to improve perinatal outcomes while saving hospitals money and possibly decreasing length of hospital stay. Potential CMS applicants are not limited to geographic region, geographic type of facility (urban versus rural) or facility size. Considering the success a bundled payment plan has had with joint replacement surgery in improving quality care while decreasing cost, bundled payment plans for maternal perinatal care considering the ARRIVE Trial results present opportune model development potential. Perhaps in the future CS can be decreased and cost lowered within a bundled payment plan benefiting patient and provider.


The ARRIVE Trial demonstrated that rates of CS can be decreased in low-risk nulliparous women undergoing elective induction at 39 weeks gestation. This evidence-based medicine provides useful application for development of bundled payment initiatives that seek to improve quality of care while reducing cost. As OB/GYNs navigate changing insurance repayment plans and bundled care, opportunities to reduce CS and associated complications while delivering quality healthcare at a lower cost abound. 


1. Maternal Health Task Force. “Maternal Health in the United States.” Harvard Chan School Center of Excellence in Maternal and Child Health. Available from:
2. National Center for Health Statistics. “Method of delivery.” Centers for Disease Control and Prevention. Available from:
3. Visser GHA, Ayres-De-Campos D, Barnea ER, de Bernis L, Di Renzo GC, Vidarte MFE, … Walani S. “FIGO position paper: how to stop the caesarean section epidemic.” The Lancet, Oct. 13, 2018, 392(10155), 1286–1287. doi: 10.1016/s0140-6736(18)32113-5.
4. ACOG Committee Opinion. “Value-based payments in obstetrics and gynecology.” The American College of Obstetricians and Gynecologists. No. 744., July 25, 2018. Available from:
5. Grobman WA, Rice MM, Reddy UM, Tita ATN. “Labor Induction vs. Expectant Management of Low-Risk Pregnancy.” New England Journal of Medicine, Aug. 9, 2018, 379(23), 2277-2279. doi:10.1056/nejmc1812323.
6. Society for Maternal-Fetal Medicine. “SMFM Statement on Elective Induction of Labor in Low-Risk Nulliparous Women at Term: The ARRIVE Trial.” American Journal of Obstetrics and Gynecology. July 2019; 221(1), B2-B4. doi:10.1016/j.ajog.2018.08.009.
7. HCUPnet, Healthcare Cost and Utilization Project. Agency for Healthcare Research and Quality, Rockville, MD. Available from:
8. Martin JA, Hamilton BE, Osterman MJ, Driscoll AK, Drake P. “Births: Final Data for 2017.” National Vital Statistics Report, 67(8), 1-50. Retrieved Oct. 4, 2019. Available from:
9. Ibid.
10. CMS. “CMS announces new payment model to improve quality, coordination, and cost-effectiveness for both inpatient and outpatient care.” Jan. 9, 2018. Available from:
11. Wolfberg A, Wallace P. “Imagine the OB bundled payment.” Becker’s Hospital Review. Feb. 1, 2019. Available from:
12. Truong K. “UnitedHealthcare launches new maternity care bundled payment program.” MedCity News. May 9, 2019. Available from:
13. Rodriguez CH. “Insurers Test New Way to Cut Maternity Care Costs: Bundling.” Kaiser Health News, Sept. 27, 2019. Available from:

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