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Ad hoc efforts help cut U.S. healthcare costs

Jul 15, 2011, 4:57 a.m.

By David Morgan

WASHINGTON (Reuters) - At Utah-based Intermountain Healthcare, comparative research made physicians realize that inducing early childbirth in healthy women created unnecessary and costly risks for newborns.

Artificially induced deliveries had become an accepted way to make childbirth fit busy personal schedules. The practice has health risks, but the average doctor saw only one or two cases a year wind up in a neonatal intensive care unit.

"It was such a low number," said Greg Poulsen, a senior vice president with the nonprofit system. "In the physician's own practice, it would be impossible to identify a trend."

About four years ago, Intermountain started comparing data on births induced after a full 39-week pregnancy to births induced one to two weeks early. The results showed the need for intensive care in babies with respiratory problems were twice as high at 38 weeks and five times as high at 37 weeks.

"Suddenly, the data was just very clear that we were putting people at risk by doing an induction prior to 39 weeks," Poulsen said. "And once the docs saw that data, they said: Whoa! We had no idea!"

The findings prompted Intermountain to limit induced births for healthy women before 39 weeks in the 18 hospitals with maternity wards within its system. Intermountain has 23 hospitals overall.

As a result, about 500 newborns avoided breathing problems and the ICU over the following year, sparing parents the grueling sight of their infant on a ventilator and saving at least $1 million a year in unnecessary medical costs for families and insurers.

Fewer inductions also led to fewer caesarean sections. That reduced risk and brought even more savings because C-sections, the most common surgery in the United States, can cost twice as much as vaginal deliveries and lead to medical complications for children.

Intermountain, which has 360 doctors delivering babies, said the reduced C-section rate delivered about $46 million in savings compared with the national average in 2008.

Poulsen's story is just one example of the individual efforts to contain costs within the $2.3 trillion U.S. healthcare system. Employers, insurance companies and doctors nationwide are trying to find savings on medical services. But the effort is largely piecemeal so far.

Policy experts say a systemic approach is needed to prevent these costs from sinking the economy. While a new U.S. healthcare law includes provisions that might lead to lower spending -- such as a focus on preventive medicine and research grants to study the most effective forms of treatment -- it's main goal is to extend access to millions of Americans.

Analysts say the country's leaders are still years away from taking the job of reining in underlying health costs seriously, even as Republicans and Democrats argue over ways to cut government spending on healthcare in deficit talks.

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"Everybody agrees, from right to left, that something has to be done. If the federal government doesn't do something, the entire economy will be at risk," said Susan Tanaka of the nonpartisan New York-based Peter G. Peterson Foundation.

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