Cesarean delivery rates, costs and readmission of childbirth in the new cooperative medical scheme after implementation of an episode-based bundled payment (EBP) policy

Background In the past decade, the rate of cesarean delivery increased dramatically in rural China under the fee-for-service (FFS) system. In September 2011, the New Cooperative Medical Scheme (NCMS) agency in Yong’an county in Fujian province of China adopted a policy of reforming payment for childbirth by transforming the FFS payment into episode-based bundled payment (EBP), which made the cesarean deliveries less profitable. Thus, this study was conducted to determine the effect of EBP policy on reducing cesarean use and controlling delivery costs for rural patients in the NCMS. Methods Data from the inpatient information database of the NCMS agency from January 2010 to March 2013 was collected, in which Yong’an county was employed as a reform county and 2 other counties as controls. We investigated the effects of EBP on cesarean delivery rate, costs of childbirth and readmission for rural patients in the NCMS using a natural experiment design and difference in differences (DID) analysis method. Results The EBP reform was associated with 33.97% (p<0.01) decrease in the probability of cesarean delivery. The EBP reform, on average, reduced the total spending per admission, government reimbursement expenses per admission, and out-of-pocket (OOP) payments per admission by ¥ 649.61, ¥ 575.01, and ¥ 74.59, respectively. The OOP payments had a net decrease of 14.24% (p<0.01); whereas the OOP payments as a share of total spending had a net increase of 8.72% (p<0.01). There was no evidence of increase in readmission rates. Conclusions These results indicate that the EBP policy has achieved at least a short-term success in lowering the increase of cesarean delivery rate and costs of childbirth. Considering both the cesarean rate and the OOP payments as a share of total spending after the reform were still high, China still has a long way to go to achieve the ideal level of cesarean rate and improve the benefits of deliveries for rural population.