In a union-sponsored health plan, we found substantial take up of an incentive program designed to improve prenatal care that targeted both patients and health care providers. Uptake of the program suggests adherence to recommended prenatal care reached 76 percent, a nearly fivefold increase over baseline estimates produced by medical management. Moreover, the increased use of prenatal care was associated with reductions in adverse birth outcomes and the cost of care in the first year of life.
Our findings have several important implications for policy and research. First, we find that a financial incentive of US$100 for patients combined with US$100 for health care providers can significantly increase timely and comprehensive prenatal care use as reported by physicians and patients. The role of the financial incentive offered to patients is of particular importance, since patients play a key role in determining whether prenatal care is initiated in the first trimester. Patient incentives in this natural experiment were of a more substantial magnitude (and paid in cash, rather than in kind) than those described in previous studies, which may explain the high rate of the observed uptake.
Second, we find moderately strong evidence that the prenatal care incentive program improved birth outcomes. Across models, all of our estimates were directionally consistent and similar in magnitude. Not surprisingly, given the relative infrequency of the outcomes of interest (<10 percent of births are admitted to the NICU or are low birth weight), however, inclusion of hospital or physician fixed effects results in lower levels of statistical significance. The literature suggests that the likely mechanism for this risk reduction is through effects on maternal smoking behavior and management of medical comorbidities, although the rates of such comorbidities—measured through billing data alone—were low in the study population. It may also be the case that infants delivered to mothers who receive complete prenatal care are less likely to require NICU admission for prophylactic measures against neonatal sepsis. Likewise, preterm infants delivered to mothers receiving optimal prenatal care may have fewer neonatal respiratory problems because of antenatal steroids administered at the first sign of possible preterm labor.
Finally, while we do not have data on the cost of administering the program (i.e., collecting documentation and paying out bonuses), the estimates of health care spending reductions associated with HPP participation suggest that the overall financial consequences of the program may have been favorable from a payer's perspective. The HPP paid out US$200 per participating delivery and our instrumental variables results indicate a reduction in spending in the first year of life of about US$235. Beyond the first year of life, payers may also benefit from higher rates of well-child visits and immunizations, which have been associated with prenatal care use in previous studies (Kogan et al. 1998
). These cost savings estimates, however, are subject to the limitations of our quasi-experimental analysis (noted below) and are necessarily speculative because we lack data on administrative costs of the program.
Our findings, which are somewhat more positive than the literature on prenatal care as a whole suggests, may be viewed by some with skepticism. A number of similarly positive studies published over the previous several decades have been criticized for selection bias (Alexander and Kotelchuck 2001
). On the other hand, some of the negative findings in the previous literature have also been challenged (Conway and Deb 2005
). Because prenatal care was established as the standard of practice before studies demonstrating the efficacy of its components, effectively precluding a randomized-controlled trial, this debate is likely to continue (Alexander and Kotelchuck 2001
). We have several reasons to believe that selection bias does not play a major role in our results, however. First, on observable characteristics, participants in the program differed from nonparticipants only in the Elixhauser index and this was higher for participants (indicating more comorbid conditions). Second, we were able to take advantage of a highly predictive instrumental variable to address potential selection bias directly. Third, because the HPP achieved 76 percent participation by the end of the study period, there should be less concern about the participating group being atypical of the general population than in a program that attracted only a small share of potential participants. Finally, the inclusion of provider fixed effects in our models had little impact on the point estimates, although it decreased their precision.
Our conclusions are tempered by several important limitations of the study. First, because we rely on billing data alone, we are missing a number of important pieces of information. Most centrally, because obstetrical care is paid for using a case rate, we cannot measure prenatal care use for non-HPP-participants. This omission should bias our estimates downward because we essentially assume that all nonparticipants have not received comparable prenatal care. We are also unable to assess race, ethnicity, smoking status, substance use, and parity, all of which are known to be associated with birth outcomes. Likewise, we are limited to the diagnosis codes available on outpatient and inpatient claims to identify clinical conditions that may be associated with the outcomes we examine. If these omitted factors are associated with participation in the HPP, our results may be biased. The instrumental variables estimates should, however, overcome these data limitations unless patients sort themselves among health care providers along these dimensions.
Our study takes place in the context of a privately insured but relatively low-income population that is disproportionately Hispanic. These characteristics as well as the relatively low rate of prenatal care use and high rates of poor birth outcomes at baseline may limit generalizability of our findings to other settings. In particular, our findings might be more positive than would be found in higher income groups both because lower-income women have more to gain from prenatal care and because they might be more likely to be influenced by a US$100 incentive. In addition, an incentive as large as US$100 (for both mothers and physicians) would be infeasible in some settings, such as traditional Medicaid, due to regulatory restrictions, fairness concerns, or budgetary constraints. Finally, a program such as this, which leverages not only patient but also provides incentives, might be less effective in cases where the payer covers a relatively small share of patients.
Based on previous literature, we surmise that the size and form of incentive offered to patients were important determinants of impact of the HPP. In particular, we hypothesize that while employers tend to favor tax-advantaged incentives such as premium discounts for wellness or disease management program participation, cash incentives will elicit greater response, particularly in low-income populations. Unfortunately, our study design does not permit separate examination of either the effect of the physician incentive vs. the patient incentive or the dose–response relationship.
The use of financial incentives for providers and patients, aligned with common goals of improved adherence to recommended care, has become a core element of value-based purchasing in the United States (Landon et al. 2008
). Our results offer some encouragement for these efforts, both in terms of the potential for improving health outcomes and avoiding high-cost adverse events. Moreover, while individual payers would have to weigh the importance of prenatal care relative to other population health priorities, our findings suggest that improving such care may be a worthy investment. Important scientific and policy questions remain about the extent to which these results can be generalized to other populations, types of incentive arrangements, and quality improvement targets such as chronic disease management, which requires long-term behavioral change on the part of patients.