SECTION 2: HEALTH CARE SUPPLY

A caesarean section is an operationwhere a baby is born through an incision made through the mother's abdomen and the uterus. A caesarean section may be planned (elective) if there is a reason that prevents the baby being born by a vaginal birth, or unplanned (emergency) if complications develop and delivery needs to be hastened.

Caesarean section is one of the most common interventions in pregnancy and is safer now than in the past, however, a small risk of serious morbidity and mortality for both the mother and the baby remains.

The WHO states that, at the population-level caesarean section rates higher than 10% are not associated with reductions in maternal and new-born mortality rates (WHO 2015). The WHO also states that caesarean sections are effective at saving lives when required for medically indicated reasons, and every effort should be made to provide caesarean sections to women in need, rather than striving for a specific rate (WHO 2015). The caesarean section rate has increased internationally between 2000 and 2017 (OECD 2019). Australia's caesarean section rate was higher than the OECD average over this time and ranked 27th out of 34 OECD countries in 2017, with a rate of 33.7 per 100 live births (ranked from lowest to highest) (OECD 2019). In 2019, 36.0% of all women giving birth in Australia had a caesarean section (AIHW 2021). The increasing rates of caesarean sections may be influenced by a number of maternal and clinical factors and medico legal concerns, however, the reasons for the steep rise remain unexplained.

2.1. Provide an economic explanation for why caesarean sections have increased in the past 20 years worldwide, and in particular, in Australia. Please argue from both the perspective of health care suppliers but also from the perspective of pregnant women.

2.2. The way health care suppliers are reimbursed plays a critical role in how much health care is being supplied by providers. Explain which different reimbursement systems exists for both physicians and hospitals and which system leads usually to oversupply.