Radical plan to slash private birth costs
Midwives could deliver babies for private patients – funded by insurers – in a plan by health funds that could slash out-of-pocket costs to just $500.
Pregnant women could pay as a little as $500 to give birth in a private hospital under the care of a midwife under a proposal drawn up by health funds that is being pitched as the solution to the nation’s escalating maternity system crisis.
In a new modelling document that is being circulated among key health groups, Private Healthcare Australia has calculated that its bundled maternity care proposal – under which women could appoint either a midwife, GP or obstetrician as their lead practitioner – would slash the cost of pregnancy care and birth in the private system to all funders by almost 30 per cent and would entice thousands of women to use their health insurance.
Out-of-pocket costs for women who opt for a private birth – which reach an average of $6900 in Sydney and Melbourne – would be slashed by an estimated $3370. Based on a nationwide average out-of-pocket cost for private antenatal care and birth of $3870, if a woman chose a midwife as their lead practitioner, patient gap fees would reduce by 87 per cent to as little as $500. Women who chose an obstetrician as their lead practitioner would save $570 in out-of-pocket costs.
The proposal follows a recommendation in a scope-of-practice review recently commissioned by the federal government which recommended legislation change to allow for the introduction of a private-sector bundled payment for maternity care which would allow midwives and GPs to be funded to manage pregnancy and birth in private hospitals.
The plan would allow for private health funds for the first time to cover some of the cost of antenatal care – the biggest out-of-pocket expense for pregnant women.
Currently, insurers are unable to cover episodes of care delivered outside of hospital. That means patients who elect to use their health insurance to birth in the private system must foot the entire bill for their out-of-pocket costs for all of their antenatal care delivered during pregnancy, only a fraction of which are covered by Medicare. Health funds cannot fund a midwife or GP to manage a pregnancy or birth in the private hospital system at present.
“The bundled care model is an opportunity to help sustain private obstetrics in this county, which is currently evaporating in front of our eyes due to the high out-of-pocket costs doctors are charging for managing the pregnancy in the community that can exceed $6500 in some cities,” says PHA chief executive Rachel David.
“The model creates a comprehensive care package that spans the entire pregnancy journey instead of just the hospital stay, which is all health funds are legally allowed to pay at present.
“By allowing health funds to contribute towards out-of-hospital costs when part of a bundled package, it removes the artificial boundaries that have historically contributed to expenses, like scans, pathology and an anaesthetist, should one be required for the delivery. Sometimes these costs are not even disclosed at the start of a pregnancy so come as a huge shock to expectant mothers when they receive the bill, and many people feel powerless to challenge them.
“We want to create more affordable and sustainable options, which health insurers are prepared to help fund. We know many women would like to engage their own midwife or GP with obstetrics experience to care for them in the private system, particularly if they have a low-risk pregnancy. But there is currently no funding model set up for this.”
The PHA proposal calculates the policy would increase private hospital births by 25 per cent, particularly given that cost is the primary factor preventing women electing to have a baby in a private hospital. Public hospital births would decline by 9 per cent. Currently, 43 per cent of women with private insurance elect not to use it for pregnancy and birth.
A lead practitioner – an obstetrician, GP, or midwife – would co-ordinate care and negotiate a single, upfront price for the mother for care across the entire pregnancy, birth and immediate postpartum period.
Bundled care would be included in Gold health insurance policies. PHA proposes that health funds should cover at least 15 per cent of the Medicare Benefits Schedule fee – the patient rebate – for out-of-hospital services.
The bulk of the costs savings in the proposal come from practitioner substitution: that is, midwives delivering babies privately rather than obstetricians. The costs to deliver midwife-led bundled care is 29 per cent lower than the current cost of private maternity care, the insurer body says, and 8 per cent lower when an obstetrician is the lead practitioner. It’s asking the federal government to tip in an incentive payment of $3000 per birth to practitioners to help them manage administrative costs. Midwives participating in the scheme could earn as much as $200,000 a year.
The proposal is being vehemently opposed by specialist doctors’ groups.
The Royal Australian and New Zealand College of Obstetricians and Gynaecologists has said it is “deeply troubled” by the bundled care plan, arguing it poses risks to the safety of women and their babies.
The college disputes the claim that the proposal will improve affordability, pointing out that 50 per cent of all births are by caesarean section that only obstetricians can perform.
The president of the National Association of Specialist Obstetricians and Gynaecologists, Gino Pecoraro, describes the PHA bundled care proposal as totally unrealistic and says it could leave midwives scrambling to secure an obstetrician to perform a caesarean section for minimal remuneration at three o’clock in the morning. “Why would anyone accept that responsibility?” he says. “I wouldn’t put myself up to be called just at the last minute when you’re accepting all of the risk and have none of the benefits.”
Dr Pecoraro says when complications arise, as they do in 50 per cent of births, women will end up flooding public hospitals at short notice.
“If insurers were serious about eliminating out of pocket costs, it’s really easy – they could just pay the Australian Medical Association recommended fee to obstetricians, and then there would be no out-of-pocket costs,” Dr Pecoraro says. The AMA fee schedule for an uncomplicated birth is $3865.00.
The AMA, which recently held a forum on private maternity care in which PHA presented its proposal, is yet to decide on a policy position in response to the plan.
“The closure of many private maternity services is highly distressing for families, and we urgently need reform to address this,” says AMA president Danielle McMullen.
“The AMA is consulting with members on a range of reform options for maternity care, but any changes to private maternity funding should be backed by robust economic modelling, preferably conducted by an independent private health system authority.
“As a starting point, MBS and health fund medical item numbers for all specialties relevant to maternity care must be urgently corrected to reverse the funding shortfall caused by the Medicare freeze and years of inadequate indexation.”
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