Hospital-level policy can affect physician behavior and reduce C-section rates

The past few decades have seen a considerable increase in caesarean section rates, which have now reached unprecedented levels. Concerns have been raised about the possibility of medically unnecessary procedures having negative consequences for mothers and infants (WHO, 2015). The aim of this report is to show that a properly implemented hospital-level policy may be a powerful tool for reducing the rates of unnecessary C-sections without inflicting harm on mothers or newborns. Reducing the rates of unnecessary procedures helps lower the excessive healthcare costs that present a major concern for public policy. This report analyzes the implications of a 2005 reform introduced in the Italian region of Piedmont that increased malpractice pressure and reduced C-section rates. Empirical evidence indicates that this reform led to a 2.3 percentage point (approximately seven percent at the mean of C-sections) reduction in the use of C-sections in treated hospitals. This suggests that physicians will also alter their behavior in response to hospital-level policies - even though such policies do not directly influence individual insurance liability. Presuming that C-section rates in Germany are partially influenced by economic and legal incentives, the Italian findings imply that increased malpractice pressure may also reduce the C-section rates in Germany, which currently exceed 30 percent - a share that is ten points higher than it was in the early 2000s. Should Germany implement a similar reform to the one introduced in Piedmont, one might expect positive effects in terms of reducing healthcare costs without affecting healthcare outcomes. This expectation presumes that there are a sufficient number of practitioners who can competently assist in a natural delivery.