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Abstract
In 1965, the cesarean section rate in the United States was under five percent. By 1988, a quarter of all deliveries were by cesarean section. Similarly, in California, the cesarean section rate peaked in 1987 at 25 percent and declined to 21 percent by 1994. Two separate lines of inquiry have sought to explain these trends. Medical research has focused on clinical reasons for cesarean section, while economic analysis has focused on financial incentives for cesarean delivery. We extend the current work on cesarean section by examining both medical and economic factors affecting the probability of a cesarean delivery in California between 1983 and 1994.
We use all California hospital discharges during the period to examine the process of cesarean delivery by separately modeling the probability of a complication and the conditioned probability of a cesarean delivery given the complication. The economic portion of the analysis focuses on the effects of type of payer (managed care, in particular) and hospital ownership.
We find that the increase in managed care was not significant in lowering the cesarean section rate. Rather the drop in cesarean section rates in California after 1987 was due primarily to the dramatic decline in cesarean section rates among women with a prior cesarean and no other complications. Among managed care organizations, only non-Kaiser HMOs experienced an increase in market share, and they had cesarean section rates nearly as high as those of unmanaged, fee-for-service indemnity insurers. Kaiser HMOs, by contrast, had much lower cesarean rates than indemnity payers, but experienced no increase. A shift into Kaiser HMOs would have resulted in a larger decline in the cesarean section rate.
The cesarean rates by payer type and hospital ownership had a pattern consistent with financial incentives to physicians. Women with indemnity insurance consistently had the highest cesarean section rates followed by non-Kaiser HMOs, Medicaid, Kaiser HMOs, and others. Similarly, for-profit hospitals had the highest rates, followed by non-profit, and then public hospitals. Although rates were adjusted for all available factors, possible endogeneity of payer type and hospital ownership must be considered in the interpretation of these results.
