Tiniest Babies Carry Biggest Costs

TUESDAY March 17, 2009 -- One year of medical costs paid by a company's health insurance for a premature baby could cover the medical costs of almost a dozen healthy, full-term babies, a new report from the March of Dimes claims.

Medical costs for healthy, full-term babies during their first year average $4,551, of which about $3,800 is covered by employer heath insurance. But for preterm babies, the cost is almost $50,000, with about $46,000 paid by employer insurance.

"The report is really aimed at the business community," Jennifer L. Howse, the March of Dimes president, said. "The purpose of the report is to underscore the very serious financial consequences of the rising problem of premature birth in our country."

By highlighting the costs of premature birth, the March of Dimes is hoping to get businesses to take steps to make sure employees and their families get good prenatal care, Howse said. "Being an employer who provides employee health insurance, you are a stakeholder in prevention," she said. "Good prevention equals a healthier workforce."

Howse noted that the costs of preterm birth can be substantial and continue well beyond the first year of life. These can include cerebral palsy, mental retardation or neurological impairment. "The more severe the disabilities and problems experienced by the newborn, the higher the costs will be," she said.

In the United States, preterm births cost $26 billion annually, according to a report from the Institute of Medicine. About 543,000 preterm infants are born each year, a number that has increased more than 36 percent since the 1980s.

Premature birth is a leading cause of newborn death, and infants who do survive face the risk of lifelong health conditions. In fact, 25 percent of infants born prematurely will have lifetime problems resulting from their early birth, Howse said. "They will require more in the way of health care, rehabilitation and special education," she said.

Premature infants also require more time in the hospital, averaging more than 14 days in their first year of life, compared with a little more than two days for healthy, full-term infants. In addition, premature infants average more than 21 outpatient visits, compared with 14 for full-term infants, according to the report.

Combined, infant and maternity costs for a premature infant average $64,713, compared with $15,047 for an infant born without complications, and employer health plans pay more than 90 percent of those costs, according to the report.

In addition, costs for complicated deliveries were also significantly higher than for uncomplicated deliveries, whether the infant was premature or full-term. Maternity care for a complicated delivery costs, on average, $14,667, the report found, compared with $10,652 for an uncomplicated delivery.

To help businesses address the problem of premature delivery, the March of Dimes developed a Web-based pregnancy and newborn health information program called Healthy Babies, Healthy Business. Howse described the program as an easy way for employers to deliver accurate, up-to-date information directly to employees to help reduce the number of premature deliveries and, at the same time, reduce health-care costs.

The March of Dimes report was compiled by Thomson Reuters, using data on inpatient and outpatient medical costs, prescription drugs for infants from birth through the first year and for mothers, including the delivery, prenatal services in the nine months before and the three months after delivery. It was to be presented Tuesday to business leaders at a luncheon in Washington, D.C., sponsored by the March of Dimes and the National Chamber Foundation, a think-tank affiliated with the U.S. Chamber of Commerce.

Dr. Maureen Hack, from the Department of Pediatrics at Rainbow Babies and Children's Hospital in Cleveland, said that the costs covered in the report are only a small part of the costs associated with preterm delivery.

"This is only the tip of the iceberg," Hack said. "This might be what it is costing the employers for the first year, but these kids have continuing health problems and, later on, they have educational problems."

And prenatal care, Hack noted, might not be enough to prevent preterm births. "It's very complex," she said. "There are a lot of factors that contribute to preterm births."

But to help pregnant women, the March of Dimes suggests that companies:

  • Provide information on preconception, prenatal, postnatal and infant care.
  • Offer a smoke-, drug- and toxin-free working environment.
  • Encourage physical activity.
  • Make available information about healthy pregnancy and childbirth and prenatal care.
  • Allow time off for regular prenatal and infant care.
  • Provide an area for women to pump and store breast milk.
  • Provide comprehensive health insurance.
  • Offer flextime and the option to work from home.
  • Provide job protection beyond the current law, including for adoption and foster care placement.

More information

The March of Dimes has more on premature babies.

Posted: March 2009


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