How expensive is it to have a baby? It depends on your address

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Hanna Horvath, CFP®

Hanna Horvath, CFP®

Managing Editor & Certified Financial Planner™

Hanna Horvath, CFP®, is a certified financial planner and former managing editor at Policygenius. Her work has also been featured in NBC News, Business Insider, Inc. Magazine, CNBC, Best Company, and HerMoney.

Published July 16, 2019 | 3 min read

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Having a baby is expensive. But just how expensive often depends on where you live.

The cost of having a baby varies widely across the country. Price variation exists across cities and even neighborhoods.

“There’s variability because there can be,” said Caitlin Donovan, spokeswoman for the National Patient Advocate Foundation. “There’s no system in place to force predictability among charges. Nor is there much incentive.”

The Health Care Cost Institute’s Price Index compared the prices of cesarean sections and vaginal deliveries across major metro areas from 2012 to 2016. The index reports negotiated prices. These are the average prices agreed on between the hospitals and the insurers. Patients don't have much say over them. What a patient pays out-of-pocket will vary depending on their insurance plan.

Variation in pricing is rooted in a number of factors: differences in standards of living, market power of hospitals and physician group and demand for health care services in a given area, said Kevin Kennedy, lead researcher at the Health Care Cost Institute.

Here’s a look at how average prices for both procedures vary in areas across the country.

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The most expensive & least expensive places to have a baby

San Francisco had the highest average hospital charges for both C-sections ($24,219) and vaginal deliveries ($15,549). Knoxville, Tennessee, also had the lowest average charges for C-sections ($4,569) and vaginal deliveries ($3,581). It is on average five times less expensive to have a baby in Knoxville than San Francisco.

Almost every metro area’s hospital prices were higher in 2016 than they were in 2012, and in most cases out-paced inflation, according to the study. (Here's how to keep medical debt from bankrupting you.)

“These trends aren’t exactly surprising,” said Kennedy. “On the other hand, we did find the magnitude of the variation was surprising.”

The relationship between price & quality

Patients may think higher hospital prices means higher quality service. Unfortunately, that is not always the case.

“There’s no proven correlation,” said Donovan. “There’s no one way to determine value. There’s no peer-reviewed process for checking the value of a service. Most patients just go off of provider recommendations, they are really just doing it blind.”

While Kennedy believes this data will bring greater transparency to the entire health care system, it may be difficult for patients to use this data to seek treatments at more affordable facilities.

“Patients are also often tied to a hospital that accepts their insurance,” said Donovan. “Transparency doesn’t even come close to solving the problem.”

What patients can do

Donovan admits it’s infuriating. But the first step to getting quality care at an affordable price is to do your research, especially if you’re pregnant. She recommends reaching out to health care providers you trust for recommendations and ask those in your social network.

Patients can often find maternal mortality rates of hospitals online. If a hospital’s rates are higher than normal, it’s a red flag, said Donovan. Patients can also save more money by making sure their providers are in-network. Out-of-network services can have much higher out-of-pocket costs.

“Ask questions, always,” she said. “You have to do the research and prepare, for yourself.”

Expecting soon? Check out our financial guide for a new baby.

Image: Nastia Kobzarenko