Dynamic and heterogeneous impacts of granting and revoking elective c-section rights in São Paulo

Elective caesarean sections (c-sections) present a significant public health challenge due to associated health risks and increased costs. This study examines the causal impacts of a unique natural experiment in São Paulo, Brazil: Law 17,137/2019, which temporarily allowed pregnant women to opt for c-sections in public healthcare facilities. Using a difference-in-differences estimator, we analyse the Law's effects on c-section rates across various hospital types, municipal characteristics, and demographics. The Law led to a significant and immediate 3.03 percentage point increase in c-section rates in public hospitals. Notably, this effect was limited to the public sector, with no consistent changes observed in private or mixed facilities. The impact was also temporary; following the Law's revocation less than a year later, c-section rates promptly reverted to pre-enactment levels, indicating no lasting effects. We find no evidence that the Law shifted deliveries from paid private care to free public hospitals. Our analysis reveals heterogeneous impacts, with the largest increases in c-section rates occurring in municipalities that had lower baseline c-section rates, a greater reliance on public healthcare, and fewer healthcare resources. These findings suggest that the law disproportionately affected areas with greater public health system strain. Interestingly, the increase in c-sections primarily occurred among low-risk births and had no detectable effect on newborn health outcomes, such as birth weight or Apgar scores. The additional 4,500 c-sections performed under the law created an added fiscal burden of approximately R$459,000 for the public health system, based on the cost difference between vaginal and c-section deliveries. This study underscores that while granting elective choice may seem empowering, it can lead to a surge in unnecessary, costly, and riskier procedures, highlighting the crucial need to consider both equity and resource implications when designing healthcare policies.