Companies tie up directly with hospitals to decrease medical costs in the US

General Electric (GE) is one of the companies that has collaborated with hospitals to cut down unnecessary interventions, such as cesareans or related problems.


Several companies in the US, including General Electric (GE) are taking steps to reduce the alarming rise in childbirth expenses for US employees. They are tying up with hospitals and doctors directly to bring down medical costs.

According to a Reuters report, the objective is to ensure that employees are taken care of at better hospitals that are less likely to perform unnecessary and expensive interventions, such as cesareans.

There has been an extraordinary increase in spending by employees on maternity care and an even alarming jump in cesarean cases in the past ten years. This results in higher cost claims.

If employees are attended to by better hospitals and doctors, there will be a significant drop in complicated cases and needless interventions. The concerned employees will also be able to get back to work faster and in good health. Therefore, the strategy ensures a reduction in employee turnover too.

Companies, such as GE are entering into contracts and payment agreements with doctors. A single ‘bundled’ payment rate covers mothers with moderate risk right from the beginning of their pregnancy to 90 days post-delivery. This does away with the financial burden associated with C-sections, which, on an average, cost almost 60 per cent more than a normal delivery. Since most health insurance companies do not provide bundled payments, this direct collaboration with the maternity care providers, doctors and hospitals works out better.

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