Not Kidding Around – Challenges in Maternal Health…

The Centers for Disease Control and Prevention (CDC) tabulated that 3.792 million people were born in the United States in 2018 – worldwide 385k people are born every day. Tragically, several hundred women die each year due to pregnancy-related complications, and while maternal mortality rates globally have declined 44% between 1990 – 2015, mortality rates in the U.S. have increased 139% since 1987. Notwithstanding the extraordinary healthcare resources, the U.S. is a shameful outlier in maternal health when compared to most other developed countries. The causes are complex, the solutions even more so. Flare Capital’s most recent investment is hoping to address these critical issues.

A 2013 study by Medical Economics calculated that the aggregate cost of all childbirths was 0.6% of the U.S. GDP that year. Childbirth is consistently ranked as the top diagnosis for inpatient stays, accounting for 11.7% of all hospital admissions at a rate of 1,195 per 100k according to the HealthCare Transformation Task Force. There are a number of demographic trends that risk further exacerbating the situation:

  • In 2019, 39.6% of all births were to an unmarried mother (more on that below)
  • Preterm births accounted for 10.2% of all births, strongly suggesting additional complications
  • Rate of cesarean procedures has steadily increased and now is 31.9% of all births (up from 20.7% in 1996), in part due to reimbursement models
  • Unintended pregnancies were 45% of all pregnancies (Brookings Institute)
  • In 2020, the fertility rate was 1.779 lifetime births per woman, a 0.06% increase over 2019 (interestingly, the population replacement rate is 2.1 lifetime births per women)
  • Notwithstanding that, annual birth rates have been steadily declining since the Great Recession, yet the costs continue to increase

Underlying causes to account for the demographic data are numerous: women working longer before having children, economic concerns, lifestyle choices, notable decline in marriage rates to flag just a few. According to the National Center for Health Statistics, annual marriage rates fell 6% in 2018 (6.5 unions per every 1,000 people), which is the lowest rate since the data were tracked in 1867; 1946 was the highest year with 16.4 marriages per 1,000 people. Slightly more than 50% of American adults were living with a spouse in 2019 (down from 70% in 1970), with another 7% living with a partner (up from 1% in 1970). The phenomenon of marriage is correlated with greater economic security, better health outcomes, and improved longevity.  

Given the structural issues around access to affordable and responsive maternal care, there exists an extraordinary opportunity to develop a convenient, timely and high-quality maternal care offering, particularly to address the needs of underserved populations. Notwithstanding the market opportunity, as an investor it always comes down to partnering with exceptional entrepreneurial and clinical talent when architecting such a company, and we are convinced we found that with the With OnCall team.

The three co-founders (Kit Dobyns, Mary Fleming, Olan Soremekun) have a wonderful collection of experiences ranging from having deep, nationally recognized clinical expertise in the OB-GYN field, building successful businesses within large payor and provider organizations, and launching and scaling very successful start-ups in the healthcare sector. This trifecta also shares a commitment to re-architect how these services are delivered in a dramatically more impactful and empathic fashion. Meeting these women where they are, be it in the home or virtually, is essential to reducing costs and improving outcomes. Flare Capital is excited and proud to partner with such a talented founding team.

At its core, payment reform will be needed to address many of these structural issues in the maternal healthcare space. According a 2019 analysis by Health Affairs, Medicaid paid for approximately 43% all births in 2018, with coverage extending only for 60 days post-delivery. Postpartum benefits differ significantly by state, creating a patchwork of racial and economic inequities. Often times reimbursement for maternity services is uncoupled from newborn care. Many high-impact services such as home visits, lactation consultations, mental health screening and care, or family planning services are infrequently (or inadequately) covered. The current reimbursement paradigm creates significant gaps in care, and in the case of cesarean procedures, arguably incentives for risky and/or unnecessary alternatives.

In addition to numerous state-run pilot programs to develop more standardized and comprehensive benefit programs that holistically address the prenatal and postpartum journey extending well beyond the first 60 days post-delivery (see below), numerous federally elected representatives are now pursuing another “Momnibus Act” as efforts in 2020 were derailed by the pandemic. With a greater emphasis on social determinants, behavioral and environmental factors, this approach advocates for continuous coverage for up to one year. Such an approach eases the transition back to other primary care services for both the mother and child.

Creation of a “fourth trimester” will help to address a range of significant issues that emerge such as mental health, pain, urinary tract infections, and severe anxiety. Neary one in seven women suffer from perinatal mood and anxiety disorders (PMAD) which costs the healthcare system $32k per pregnancy or $14.2 billion. Often times screening for PMAD is covered, yet the treatment and care is not. Greater reliance on high-impact, lower cost providers such as doulas and midwives, or moving site of service to the home or birthing centers, will have a dramatic impact on outcomes and costs. When doulas are deployed, the rate of cesarean deliveries drops by 39%.

In addition to payment reform, there is a vigorous debate underway to expand child tax credits, effectively an Andrew Yang version of Universal Basic Income but for children. Research by the Niskanen Center, a leading Washington, D.C.-based think tank, concluded that a $3,600 payment per child under six years old ($3,000 for ages 6 – 17 years) would reduce childhood poverty by three million children, but obviously this does not directly address maternal health concerns surrounding birth. Just as Social Security was established to address elder poverty, such payments to families with children would seek to dramatically curtail childhood poverty, presumably improving recipients’ lifetime health quality. Republican proposals are estimated to cost $66 billion annually versus Democratic proposals of $105 billion. An emerging consensus appears possible, notwithstanding critiques from opponents of pronatalist policies that suggest such tax credits would create inducements for more unnecessary births.

Sadly, the CDC has identified dramatic racial disparities in maternal health outcomes. Black and American Indian/Alaskan Native women experience 2-3x higher maternal mortality rates when compared to other demographic groups. These disparities exist across all states and all age cohorts but reach 4-5x higher mortality rates for minority women older than 30 years of age. Quite surprisingly, even for women with college or graduate level education, the rates are stubbornly greater at 5x for Black and American Indian/Alaskan Native.

Covid-19 has introduced a roster of additional concerns for quality maternal health. Notwithstanding that nearly 20k pregnant women already have been vaccinated, the safety debate continues without the CDC taking a precise stand. While it appears that Covid-19 symptoms are more severe with pregnant women, it is still unclear if the vaccine confers protection to the child or should the mother become infected, will that imperil the child.

Interestingly, the maternal health sector has attracted a significant amount of investor attention. Forbes estimated that nearly $800 million was invested in “femtech” companies in 2019, while Pitchbook tracks just over 400 companies in this category with approximately $700 million invested in each of the past three years (below). A number of consumer focused maternal companies recently raised significant rounds: Owlet Baby Care closed a $1.1 billion SPAC (special purpose acquisition company) valued at 10x forward revenue; Nanit raised $25 million and offers a baby-monitoring system; and FitTrack launched its Beebo, a moms-to-be smart scale. Rock Health determined that 65% of all femtech investments were focused on fertility, pregnancy, and motherhood.

Separate but perhaps related, there are emerging paternal issues as well. A 2017 Mt. Sinai Medical School study revealed that sperm count in the Western world had declined 59% from 1973 to 2011. What the role of environmental factors are is not entirely clear, but certainly in conjunction with reduced testosterone levels and increased incidence of testicular cancer, epidemiologist project that the median man would have no viable sperm by 2045 – all echoed in a super scary move called “Children of Men” in 2006.

3 Comments

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3 responses to “Not Kidding Around – Challenges in Maternal Health…

  1. Bill Asher

    This is a really interesting topic that has been flying under the radar screen from my perspective. Are you aware of any governmental (state or US) or nonprofits that are taking a holistic approach to the “four trimester” pregnancy?

  2. This is a great article shining light on a crucial issue. Thanks for sharing this! At Vital Start we are working on addressing this through our maternal mental health telemedicine platform, COURAGE that uses VR and AI to provide evidence-based, targeted treatment with a focus of meeting the patients where they are in their care journey.
    ` Kirthika Parmeswaran,
    CEO, Vital Start Health
    http://www.vitalstarthealth.com

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