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Challenges of Financial Margins in Obstetric Units Discussed

Challenges of Financial Margins in Obstetric Units Discussed

Financial contribution margin can increase net revenue, but slowing birth rate is a challenge

THURSDAY, July 25 (HealthDay News) -- In obstetric units, the challenges of reducing health care costs while improving the experience of care are complicated by the slowing birth rate, according to a clinical opinion piece published in the July issue of the American Journal of Obstetrics & Gynecology.

Noting that hospital services, which often have narrow financial margins, are attempting to improve quality alongside reduced health care spending, Vivian E. von Gruenigen, M.D., from Summa Health System Akron in Ohio, and colleagues reviewed the challenges and potential financial solutions for labor and delivery units.

The researchers note that in the changing paradigm from physician-centered care to the transparent safety of teams, improving quality, efficiency, and cost requires considerable physician cooperation. Increasing the net revenue can result from a financial contribution margin, but considerable volumes are needed. In obstetrics, the challenge of this model is the slowing birth rate. To ensure sustainability, cost containment is necessary. Quality can be improved and costs reduced with the use of new incentive models that standardize hospital policies and procedures, such as reducing the use of expensive pharmaceuticals, minimizing elective inductions, and encouraging breastfeeding.

"As providers of health care to women, we all must engage in the triple aim of (1) improving the experience of care, (2) improving the health of populations, and (3) reducing per capita costs of health care," the authors write. "All health care providers and institutions must be vigilant on both quality [and] cost-effective care for sustainability, especially in obstetrics."

Abstract (http://www.ajog.org/article/S0002-9378(13)00160-9/abstract )Full Text (subscription or payment may be required) (http://ajog.org/article/S0002-9378(13)00160-9/fulltext )