Promoting Less Costly, Safer Births

Promoting Less Costly, Safer Births

Thursday, August 13, 2009




Promoting Less Costly, Safer Births

Here's one way states can lower health care costs: reduce the most commonly performed surgery, namely Cesarean sections, or C-sections, to deliver babies -- roughly half of which are performed unnecessarily

To encourage more natural childbirths, the state of Washington will begin this month to pay hospitals the same amount for an uncomplicated C-section as for a complicated vaginal birth under its Medicaid reimbursement rules.  With half of all births in Washington paid for by Medicaid, this will likely have a significant impact in reducing unneeded C-sections in the state, saving money and potentially lives.

The Alarming Rise in C-Sections:  As the Washington State Department of Social & Health Services described in adopting new reimbursement rules to encourage more natural births, the problem of unneeded C-sections had been rising dangerously in recent years:

  • Nationally, the U.S. has seen a 50% increase in C-sections since 1996.
  • Washington state’s C-section rates have jumped 60% in low-risk mothers.
  • Paralleling national trends, Washington State is approaching a 30% surgical birth rate.
  • Highlighting the arbitrary rise of the procedure, this rate varies between 15% and 48% at different hospitals.

Nationwide, the C-section rate is almost 32%, more than double what both the World Health Organization and the Centers for Disease Control say is necessary.  When the rate of C-sections rises above 10% to 15%, both the WHO and CDC find that the harm outweighs the benefits to mothers and babies.  So at least half of the approximately 22,000 C-sections performed each year in Washington are not only unnecessary, but also harmful.

Changing Incentives:  The new rules adopted will cut Medicaid reimbursements for uncomplicated C-sections from about $3,600 to around $1,000. Hospitals with high C-section rates will ideally be encouraged to change practices that have been unnecessarily driving up C-section rates.  Assuming no changes in C-section rates, the change in reimbursement rates will save the state close to $2 million and the federal government another $2 million.  But if the incentives decrease the total number of C-sections, the savings will be even larger.  And if adopted nationally, one analysis notes:

"With C-sections accounting for 45 percent of the $86 billion the U.S. spends on childbirth each year, lowering the C-section rate could go a ways toward paying for President Obama’s goal of getting health coverage to everyone in the country."

Notably, developed countries with lower C-section rates (12% in the Netherlands and 18% in France) tend to have both lower infant mortality rates and spend less of their GDP on health care. 

These proposals are just part of how Washington state is taking the lead on childbirth reimbursement reforms.  By paying for home births attended by a licensed midwife, Washington has a rate of out-of-hospital birth that is double the national average, which a 2008 Department of Health cost-benefit analysis found resulted in good outcomes for mothers and babies and yielded a net savings to the government of about $250,000 per year from the reduced numbers of C-sections.  Again, it's worth considering that in Europe, midwives assist at more than 70% of normal vaginal births, compared to midwives delivering just 7% of American babies in 2003 -- again with lower costs and lower infant mortality in Europe compared to results in the United States.

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Protecting the Unemployed from Abusive Credit Inquiries

As the economic downturn progresses, American workers are facing a disturbing rise in employers using credit ratings to determine job worthiness.  According to a 2006 survey by the Society for Human Resource Management, the number of firms using credit histories to screen applicants rose from 25% in 1998 to 43% despite such inquiries often being discriminatory and even illegal.  Even if they disclose a credit search request, companies often bury it within lengthy applications so applicants might not even be aware that they are authorizing a credit check.  This downwards spiral makes it increasingly hard for job seekers to become employed and pay off debt.

Increased State Regulation of Credit Inquiries:  In some states lawmakers have stepped up to protect workers.  Washington state's HB 1546 mandates that searches of a candidate's credit history must be directly pertinent to the job.  This year Hawaii legislators enacted HB 31 over the Governor's veto to prevent employers from discriminating in hiring or firing based on an individual's credit history or credit report, unless the position is a managerial or supervisory position, or it directly relates to an occupational requirement or the employer is an FDIC-insured financial institution.  Moreover, a credit inquiry may only be made after a conditional job offer.  Last year, California Governor Schwarzenegger vetoed a similar law (AB 2918), although it has been reintroduced for this session.

In 2009, chambers in Indiana (H 1250) and Ohio (SB 91) considered broad anti-discrimination in the workplace bills that would have prohibited credit inquiries, while the Connecticut House passed HB 5521 which would have put the burden on the employer to prove the necessity of a credit check for hiring.  New York and Missouri both sought to limit the use of credit scores in job decisions.  Texas tried to pass a version that simply pertained to state employees.  Legislators in Michigan (HB 4578) have also introduced bills prohibiting companies from using credit history in making employment decisions.

“In my opinion, it’s discrimination,” said Representative Jon Switalski, the Democrat who proposed legislation in Michigan.  “If you miss a few payments or you have medical debt, your skills as a pipe fitter or an electrician don’t diminish.” 

Employers Violating the Law:  Highlighting the relevance of these state laws, employee credit checks could violate federal law, as EEOC commissioners have testified, yet enforcement has been weak at the federal level.  The Fair Credit Reporting Act (FRCA) requires an employee or applicant's written permission any time an employer hires a third party to conduct a background check.  If an employer uses credit information to deny an applicant a job, fire a current employee, rescind a job offer or cancel a promotion, the FCRA requires the employer to provide the worker with a copy of their report and if the report influenced a hiring decision.

Unfortunately, too many companies do not comply with the law and simply provide an alternate excuse.  Additionally, because credit histories tend to be fraught with discriminatory and inaccurate information to begin with, applicants from communities of color or low-income communities are at a disadvantage.  According to a report by the National Consumer Law Center, even the Consumer Data Industry Association, the trade association of credit bureaus, testified that 22% of the 57.4 million consumers who ordered their own credit reports filed a dispute.  And in the amount of time it takes to contest a report's accuracy and repair a credit rating, companies may have already hired others.  Recently, Congress introduced US HR 3149 to prohibit the use of consumer credit checks by employers as part of the hiring or firing process, unless the job is at a financial services institution or involves national security or FDIC clearance. The bill is supported by labor unions, civil rights groups, fair housing advocates, and advocacy organizations for consumers, students, and women.

Historically, states have been at the forefront of tightening regulations and enforcement of fair credit reporting, but amendments made in 2003 removed certain preemption provisions.  Ultimately, workers facing spiraling bill payments and one of the worst job markets in recent history should not be doubly burdened by invasive and discriminatory credit checks.

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Big Business Already Giving Big to Take Down Oregon Tax Increase

Courtesy of Citizens for Tax Justice.

Earlier this year, policymakers in Oregon enacted both temporary and permanent changes in the state’s tax system to help close an enormous budget gap and, by extension, provide funding for vital services like education, health care, and public safety.  Among the changes are an increase in the personal income tax rate on income in excess of $250,000, new limitations on the personal income tax deduction for federal taxes paid, reforms to the state’s corporate minimum tax, and an increase in the top corporate income tax rate.

Yet, due to quirks in Oregon’s legislative process, opponents of these changes have an opportunity to put them before the voters for approval via referendum.  Not surprisingly, representatives of big business and a who’s who of anti-tax organizations are attempting to take full advantage of that opportunity.  Groups such as Associated General Contractors of America, Associated Oregon Industries, and Common Sense for Oregon have all already given tens of thousands of dollars to the referendum effort, which must collect over 55,000 signatures by September 25.  If they do, then the changes will be put before the voters in January. 

While corporate interests will almost certainly go to great lengths to stop these changes from taking effect, it will ultimately be the voters who decide -- and, for now, it appears that they understand the need for additional revenue generated in a progressive fashion.  Polling conducted by Grove Insight and released by the Oregon Center for Public Policy indicates that 62% of likely voters would back the changes enacted by the legislature, with just 26% opposed.

For more on the recent changes in tax policy and on the referendum fight, visit the Defend Oregon Coalition.

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Research Roundup

The Road to Responsible Contracting: Lessons from States and Cities for Ensuring That Federal Contracting Delivers Good Jobs and Quality Services - This National Employment Law Project study highlights the experiences of cities and states with a range of "responsible contracting" policies.  By prioritize purchasing from contractors that provide living wages and benefits and comply with workplace, tax and other laws, states and cities have found that this approach not only creates better jobs, but also attracts a stronger pool of contractors, resulting in better quality highways and bridges, and more reliable security and maintenance services.  At the same time, it minimizes the hidden costs to taxpayers that result when employers pay low wages.

Family-Friendly Workplaces: Do Unions Make a Difference? - In most areas unionized workers receive more generous family-friendly benefits than their non-unionized counterparts, according to this report by the Labor Project for Working Families.  For example, 46% of unionized workers receive full pay while on family leave compared to just 29% of non-unionized workers, unionized workers have more flexibility in using paid sick days to care for a sick child, and unionized workplaces are five times as likely to pay insurance premiums for the whole family.  Similarly, unionized workplace provide more flexible work arrangements, child care benefits and better enforcement of other laws like FMLA.

Asset Building in Low-Income Communities of Color, Part 2 - The Joint Center for Political and Economic Studies released its findings from the second year of its initiative studying what works to enable low-income communities to accumulate assets.  The report examines asset building in 10 states with a low-ranking on asset accumulation - most with sizable communities of color - and compares these findings with those for states with high rankings on asset building for low-income people.  

Reports on States' Fiscal Crises:

  • New Fiscal Year Brings No Relief From Unprecedented State Budget Problems - At least 48 states have addressed or still face shortfalls in their budgets for fiscal year 2010 totaling $165 billion — or almost one-quarter of state budgets, according to the Center on Budget and Policy Priorities.  Four states — Arizona, Connecticut, Michigan, and Pennsylvania — have not yet adopted budgets for 2010.   In addition, new shortfalls have opened up in at least 13 of the states that have adopted budgets.
  • Facing Deficits, More States Considering Taxing Services - As detailed by the Center on Budget and Policy Priorities, states’ traditional sales tax base, which consists largely of purchases of physical goods, fell from 39% of household consumption in 1970 to 32% in 2007, even as most states continue to apply their sales tax to less than one-third of 168 potentially taxable services, according to the Federation of Tax Administrators. By broadening the sales tax base to services, states could increase revenue and make the sales tax fairer.

Jobs and Recovery:

  • Rebuilding America: A Policy Framework for Investment in Energy Efficiency Retrofits - Deep building retrofits can cut energy use by 20% to 40% with proven techniques and off-the-shelf technologies and can pay for themselves from the energy they save, according to this Center for American Progress study.  Energy efficiency retrofits also create good local construction jobs across the country at a time when well over a million construction workers sit idle in a sagging housing market.
  • More than 500 days of recession - New numbers on economic growth show less decline in the last quarter compared to the beginning of the year, acording to the Economic Policy Institute, giving hope that recovery funds are helping the economy turn the corner.  ARRA contributed roughly 3% to annualized growth rates in the second quarter, but with even more public relief and investments, the U.S. economy could do much better.

A Forgotten Crisis?: Coverage of post-Katrina Gulf Coast Poverty since 2005- Highlighting the short attention span of the nation in dealing with poverty and disasters, among the nation's top 25 newspapers, the study by Spotlight on Poverty and Opportunity finds a dramatic 90% decrease in coverage of poverty in Gulf Coast communities.

Please email us leads on good research at


Promoting Less Costly, Safer Births

Washington State Department of Social & Health Services - 2009 Fact Sheet: Hospital cost controls - Take away the incentives for too many c-sections
Childbirth Connection -  Why Does the National U.S. Cesarean Section Rate Keep Going Up?
Centers for Disease Control and Prevention - Maternal, Infant, and Child Health
World Health Organization - Identifying barriers and facilitators towards implementing guidelines to reduce caesarean section rates

Protecting the Unemployed from Abusive Credit Inquiries

Federal Trade Commission - The Fair Credit Reporting Act
Electronic Privacy Information Center -The Fair Credit Reporting Act (FCRA) and the Privacy of Your Credit Report
USA Today - 5 states challenge employer credit checks


The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Caroline Fan, Immigration and Workers' Rights Policy Specialist
Julie Schwartz, Broadband and Economic Development Policy Specialist
Christian Smith-Socaris, Election Reform Policy Specialist
Adam Thompson, Health Care Policy Specialist
Julie Bero, Executive Administrator and Outreach Associate
Austin Guest, Communications Specialist
Mike Maiorini, Online Technology Manager
Marisol Thomer, Outreach Coordinator

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