Drive-through Delivery: Where are the “Savings”?

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Abstract
Using a natural experiment, this study estimates the effects of Medicaid managed care on total hospital costs of a birth. The authors study 5,585 vaginal deliveries from 1993 through 1995. Hospital length of stay for maternity care has been reduced by 21 percent after the introduction of managed care. The resultant program saving, however, is $280 in total hospital cost per delivery, 12 percent of the total hospital costs before managed care. Furthermore, when the full costs of an earlier discharge, including costs to patients and their families, are taken into account, the savings associated with a shortened hospital stay may be even smaller.