Although mothers are at greater risk during caesarean-section procedures than during regular births, and the U.S. government has identified reduction of hospital c-sections as a priority, no downward trend is occurring.
Research by CU-Boulder business Professor Naomi Soderstrom provides some insight as to why: A hospital's bottom line may determine whether a doctor conducts a c-section.
"From an accounting perspective, reducing the number of c-sections may not be in a hospital's or physician's best interest, since reimbursement rates for c-sections are higher than for vaginal births," Soderstrom said.
"Our research identifies a subtle factor in a physician's decision to do a c-section: when labor and delivery wards are full and a mother is a potential candidate for a c-section, c-section rates are higher. By conducting c-sections, hospitals can free up room in the wards by reducing the amount of time expectant mothers spend in labor and delivery," she said.
Soderstrom, an associate professor of accounting at the University of Colorado at Boulder's College of Business, published her findings in the most recent issue of the Journal of Management Accounting Research, one of the most respected research journals in the field of managerial accounting.
Soderstrom, who earned her Ph.D. from Northwestern University in 1990, coauthored the paper with Ramji Balakrishnan, a professor of accounting at the University of Iowa. The paper is titled, "The Cost of System Congestion: Evidence from the Health Care Sector."
Based on their findings, the trend toward more c-sections is not likely to go away any time soon, Soderstrom said. "Given current consolidation in the health care industry and emphasis on cost control, it is likely that labor and delivery wards are full more often."
The paper uses evidence from the health care setting to show that congestion in a company's system increases its operating cost.
For example, a hospital's operating cost increases when it is close to capacity. In those situations, the incremental cost of another patient is not only the direct cost, but also the cost of externalities, such as additional storage costs and a decline in quality, that it imposes on other patients. The findings have implications for a company's capacity planning.
For more information, call Naomi Soderstrom at (303) 735-6620.