Managed Care

"Drive-through deliveries" were more than 18 times as likely in 1994 as in 1990, regardless of payer

Consumer furor in the early 1990s over "drive-through" deliveries, 1-day hospital stays for uncomplicated vaginal childbirth, was aimed primarily at health maintenance organizations (HMOs), which were viewed as placing cost savings above quality of care. Eventually, Federal legislation in 1996 mandated minimum 2-day stays nationwide for uncomplicated vaginal deliveries and 4-day stays for cesarean sections.

Blaming HMOs for "drive-through deliveries" was not entirely justified, concludes a study supported in part by the Agency for Health Care Policy and Research (HS09325). Using New Jersey hospital discharge data, the study demonstrates that HMOs in New Jersey were more aggressive than other types of insurers in reducing hospital stays for uncomplicated vaginal delivery to 1 day. Following passage of the Health Care Reform Act of 1992—which eliminated the State's hospital rate-setting system—insurers were free to negotiate price discounts with hospitals, including per diem contracts. Though few data are available, many believe that HMOs were more aggressive than other insurers in switching from case-based to per diem rates. This provided HMOs with a strong incentive to aggressively trim length of stay after 1992.

In fact, the researchers found that the percentage of 1-day stays increased from less than 4 percent for all payers in 1990 to 48 percent for HMO patients and 32 percent for non-HMO patients in 1994. Controlling for other factors affecting length of hospital stay, the odds of an HMO patient staying 1 day were nearly twice as great as a non-HMO patient by 1994.

On the other hand, by 1994, a woman had 18 times the odds of a 1-day stay than she did in 1990, irrespective of her insurer. By 1994, the cost-cutting mechanisms such as utilization review and denial of service coverage by different insurers were probably more similar than different, note Kevin G.M. Volpp, M.D., Ph.D., of Harvard Medical School, and M. Kate Bundorf, M.B.A., M.P.H., of the University of Pennsylvania. They used hospital patient discharge data from the New Jersey Department of Health to examine differences in length of stay for normal, uncomplicated deliveries between patients in HMOs and those not in HMOs.

The strong secular trend toward shorter stays for uncomplicated deliveries suggests that HMOs may have been unjustly targeted. The researchers conclude that legislation and regulations should be targeted at particular policies rather than insurers.

See "Consumer protection and the HMO backlash: Are HMOs to blame for drive-through deliveries?" by Dr. Volpp and Ms. Bundorf, in the Spring 1999 Inquiry 36, pp. 101-109.

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