In the US, moms are dying more often today than they were a generation ago. More than half of these deaths are likely preventable. Childbirth has been and remains the most common reason for hospitalization, and nearly half of US births are financed by Medicaid. Medicaid policy is the focus of perennial policy attention, and current conversation focuses on Medicaid block grants, which risk worsening a situation that urgently requires improvement.
Both of us have been engaged for more than a decade in improving population health and health equity by conducting research, leading state Medicaid transformation, engaging health care delivery systems change, and catalyzing payment and policy reforms. We’ve also both given birth and understand—from a professional and personal perspective—the pivotal importance of access to high-quality care at this critical juncture in life. As a nation, we can and must do more to keep moms alive. Both the evidence and capacity exist to improve equity in childbirth and save lives.
As the largest purchaser of childbirth care in most states, Medicaid programs can drive policy changes with the potential for addressing harmful inequities in maternal health. At a recent Medicaid and CHIP Payment Advisory Committee (MACPAC) meeting, new data indicated that Medicaid beneficiaries face almost double the risk of severe maternal morbidity and mortality during childbirth hospitalizations, compared with privately insured people. Among Medicaid beneficiaries, as with the nation as a whole, rural residents and people of color (especially Black and Indigenous people) face elevated risks of complications and death around the time of childbirth.
While these data on Medicaid beneficiaries are new, evidence of racial and geographic inequities in maternal health are well-documented. The potential for improvement is substantial, and could take many forms, from incremental changes to policy within Medicaid to transformation of the organization and financing of maternity care in the US. Below we suggest several incremental changes that could be accomplished in the short term. More ambitiously, we also propose a new program called the “Pregnancy2Parenthood Plan” that would overhaul the financing of pregnancy, birth, and postpartum care and encompass all pregnant people, including enrollees in Medicaid, individual, and group health plans.
Incremental Changes
Current state and federal policy discussions have included evidence-informed efforts around eligibility, financing, and services that could improve maternal health for people covered by Medicaid.
Maternal mortality encompasses deaths that occur during pregnancy and up to one year after childbirth. Nearly 1/3 of maternal deaths happen in the postpartum year. However, Medicaid coverage ends sixty days after childbirth for people with pregnancy-related Medicaid eligibility. Research also shows that more than half of Medicaid beneficiaries experience health insurance coverage gaps shortly after childbirth. Clinical professionals and state and federal legislators are increasingly proposing to extend pregnancy-related Medicaid eligibility beyond sixty days for a full year postpartum, allowing continuous Medicaid coverage without gaps or administrative barriers for new moms.
How Much We Pay Matters, But So Does What We Pay For
Challenges with maternity care payments under Medicaid include payment rates and payment structures. On average, reimbursement rates for maternity services under Medicaid are approximately half of what private health plans pay. But improving financing is more complicated than simply increasing overall payment rates. Medicaid managed care plans, which cover the majority of pregnant Medicaid beneficiaries, pay varying rates and cover different services for prenatal, delivery, and postpartum care. Also Medicaid pays for nearly half of all births in the U.S., and for rural areas in particular the payment discrepancies between payers and among Medicaid plans can create inequities when resource investments and policies are created based on “payer mix” This “payer mix” financial challenge is amplified for maternity care, which is frequently perceived as a financially risky service line (sometimes called a “loss-leader”) in hospital C-suite discussions.
Financing maternity care can be especially challenging in rural areas, where Medicaid covers a larger proportion of births than in urban areas. Meeting the bottom line is difficult for smaller hospitals with fewer births that lack negotiating power with health plans or are challenged to maintain the fixed cost of a maternity program.
Hospital costs for childbirth top $13 billion annually in the U.S. We are already investing substantial resources in maternity and newborn services across the system, but, given poor outcomes and inequities, we ought to think about investing differently. In Minnesota’s Medicaid program, for example, managed care plans are paid over $1,200 per month for pregnant beneficiaries and roughly $700-$1,000 per month for newborns. Aggregated across the months of pregnancy and the number of births in the state, this investment easily tops $700 million annually in Minnesota alone. Yet, there is a lack of transparency about how health plans are directing all those resources to maternity care, which cast doubt about whether these financing arrangements are improving maternal and infant outcomes.
Integrating Non-Clinical And Community-Based Care
Currently, financial incentives are not aligned to promote investment in the needed care and support to address the maternal health challenges faced by people covered by Medicaid. This is not only about eliminating reimbursement rate inequities, but also redirecting resources to integrate non-clinical and community-based care to improve equity in access and quality. Further, creative use of innovative payment models (including blended payment rates or bundled payments) holds promise for incentivizing low-intervention maternity care, such as freestanding birth centers and midwifery models of care, when clinically appropriate.
States are beginning to use community-based services as cost-effective means of improving outcomes via Medicaid’s “in lieu of services” option under managed care. Nonclinical and community-based support for pregnancy, birth and the postpartum period—including services provided by doulas and community health workers, in-home and community-based visits, and peer counseling—can facilitate improved outcomes. Additionally, support services for safe housing, nutrition, intimate partner violence prevention, financial security, and other aspects related to social determinants of health may address these important causes of maternal mortality.
Transforming The System
Incremental steps are important to providing proof of concept, shifting policy norms, and demonstrating what’s possible. This is seen in recent health policy reforms such as accountable care models, integration of clinical and social services, and a renewed focus on social determinants and risk factors. Lessons learned from these recent efforts tell us that the US health care delivery system 1) continues to predominantly rely on fee-for-service payment vs. financially incenting quality of care and healthy outcomes; 2) shows nascent and mixed data on the effectiveness of delivery system reform focused on social determinants; and 3) requires alignment in eligibility, benefits design (including cost-sharing), payment, and payer participation to achieve significant systems-level change.
The current trajectory of, and inequities in, maternal health are disturbing and unacceptable. Also, the substantial difference in Medicaid programs across states, and differences in policy adoption on an incremental level, could actually increase some of the inequities these initiatives intend to address. Lessons of the past, and the urgency and opportunity of today to improve maternal health, necessitate radical re-thinking of maternal health care financing and organization. We propose a new uniform pregnancy benefit plan, the “Pregnancy2Parenthood Plan.”
The Pregnancy2Parenthood Plan
The new plan could be envisioned as a national comprehensive and consistent health plan for all pregnant people and infants, leveraging existing state Medicaid administrative and purchasing infrastructure. The plan would cover the time period from pregnancy through the postpartum year (or two). All pregnant patients, regardless of insurance, would be enrolled, and the Pregnancy2Parenthood Plan could wrap around private coverage while building on the strong foundation of Medicaid and CHIP.
This plan would not replace current Medicaid or CHIP programs, but provide each state the opportunity to transform their maternity care systems across multiple payers, creating a uniform benefit set available to all pregnant people and consistent payments to providers. This could allow both small and large businesses to pool risk and investments, to improve outcomes and reduce disparities, while still paying their share. This is analogous to Medicare-Medicaid integrated plans for people who are dually eligible for both programs; two payer sources that come together to create uniform and seamless experience for people (and providers) while the funding streams and coordination of benefits happen behind the scenes.
Because Medicaid already covers half or nearly half of all the births in each state, Medicaid programs could serve as the chassis for purchasing, coordination of benefits, and plan administration under a full risk contracted model or as a third party administrator, self-insured model. The plan would be consistent from both an enrollee and a health care provider perspective. That is, all pregnant or infant enrollees would be enrolled in the same plan, with the same benefits, regardless of who insured them. Funding based on Medicaid and CHIP eligibility would remain intact, and employers would directly fund Medicaid to purchase and manage risk for maternity care for their plan. There would also be a uniform provider network, pricing, and payment structure across a state electing to establish a Pregnancy2Parenthood Plan.
The Pregnancy2Parenthood plan would provide both innovation and consistency: it could innovate on the maternity care financing model by covering evidence-based services that are outside the current scope of coverage by Medicaid and private plans, while providing all pregnant people with financial access to high-value services. The intent of the Pregnancy2Parenthood Plan is to reduce income, racial, and geographic inequities in birth outcomes across the entire system by ensuring that all pregnant people are accessing evidence-based services and getting high-value care in clinical, community, and home settings.
This coverage model would eliminate access barriers, payment gaps, and stigma based on payer, and could flexibly adopt alternatives to fee-for-service payment to financially reward high-quality care, equity, and good birth outcomes. Services could be expanded beyond clinical care to include evidence-based community and social services that improve pregnancy outcomes. Ideally, this plan would seamlessly connect with other policy initiatives related to paid parental leave and affordable childcare access to ensure comprehensive support for families in the first years of a child’s life.
The Pregnancy2Parenthood Plan would function best if it were inclusive of all payers, including Medicaid programs and individual and employer health plans. Pooling risk for high-cost pregnancies and births across all participants could strongly benefit small employers and people who get insurance on the individual market. Owing to the special status of self-insured employers, participation may need to be voluntary or allow an opt-out option; however, self-insured employers who worry about the potential for preterm and other high-cost births would benefit from expanding the risk pool for these events. The Pregnancy2Parenthood Plan could address high-cost outliers through risk pooling or reinsurance and provide for shared savings in the context of achieving better outcomes at lower cost.
Expanding Our Vision For What Is Possible
The Pregnancy2Parenthood Plan is an idea we can work toward. Achieving birth equity requires courageous, bold actions. It is essential to expand the policy imagination about what is possible, in order to combat the damage wrought by structural inequities in health care delivery and financing that render Black, Indigenous, rural, sick, and low-income people disproportionately more likely to die around the time of childbirth. One thing is clear: moving Medicaid to a block grant program would likely constrain capacity for change, incremental or transformative.
We need to be having conversations about shifting institutional mindsets and investing resources to improve health, starting at birth. Future generations depend on it.