The effect of physicians' remuneration system on the Caesarean section rate: the Uruguayan case

Using data about births from the perinatal information system (PIS) registered in Montevideo (Uruguay), we estimated the probability of having a Caesarian section delivery, controlled by risk factors and the endogeneity of the choice of hospital. In public hospitals in Montevideo there is a fixed payment system, but in private hospitals this procedure has to be paid for separately. In the former, there is no effect on the doctor's income if he performs a Caesarian, but in the latter there is a positive effect. Empirical evidence shows the probability of a Caesarean section increases with the age of the woman, the presence of eclampsy, pre-eclampsy, previous hypertension, previous Caesarean sections, multiple pregnancies and fetopelvic disproportion, and decreases for multiparous women and women in a public hospital. In fact, the probability of having a Caesarean section in a private institution is almost two times higher than in a public hospital (20% as against 39%). Focusing on women without risk factors, we found that the probability a Caesarian in a public hospital was 11%, but the probability in a private hospital was 25%. We conclude that the remuneration system explains an important part of this difference.