Potential Medicaid cost savings from maternity care based at a freestanding birth center

Medicaid pays for about half the births in the United States, at very high cost. Compared to usual obstetrical care, care by midwives at a birth center could reduce costs to the Medicaid program. This study draws on information from a previous study of the outcomes of birth center care to determine whether such care reduces Medicaid costs for low income women.

The study uses results from a study of maternal and infant outcomes at the Family Health and Birth Center in Washington, D.C. Costs to Medicaid are derived from birth center data and from other national sources of the cost of obstetrical care.

We estimate that birth center care could save an average of $1,163 per birth (2008 constant dollars), or $11.6 million per 10,000 births per year.

Medicaid is the leading payer for maternity services. As Medicaid faces continuing cost increases and budget constraints, policy makers should consider a larger role for midwives and birth centers in maternity care for low-risk Medicaid pregnant women.