March of Dimes

Cost of Saving Babies
 
Healthy Babies, Healthy Business was designed to help you to enhance your existing wellness programs and to offer our content to your employees. Based on internal and externally conducted research, we know that reducing health care costs is a major factor when cost-justifying these types of programs. That's why our program is free. We are keenly aware of the financial and emotional costs involved with having a premature or unhealthy baby and want to help you mitigate health care costs by enhancing employee education.

Prematurity takes a devastating physical toll on babies. It robs families of the full potential of their beloved children, society of future leaders, and our nation of strong and healthy citizens. And it places a tremendous financial burden on everyone, including our health systems, businesses and society as a whole.


Did you know?1
  • In 2005, the annual societal economic cost (medical, educational and lost productivity) associated with preterm birth in the U.S. was at least $26.2 billion or $51,600 per infant born preterm.
  • Of this total, medical care services contributed $16.9 billion
  • Maternal delivery costs contributed another $1.9 billion
  • Early intervention services cost an estimated $611 million
  • Special education services associated with the higher prevalence of four major disabling conditions among preterm infants (cerebral palsy, mental retardation, vision impairment and hearing loss) added another $1.1 billion
  • Lost household and labor market productivity associated with preterm birth disabilities contributed $5.7 billion

Longer Hospital Stays = Higher Costs

  • Consider the following statistics on the average length of infant hospital stays: 
    - 2.0 days for uncomplicated newborns 
    - 13.6 days for infants with any diagnosis of prematurity 
    - 24.2 days for infants with a principal diagnosis of prematurity

Cost of lost productivity2
On average, premature babies covered by employer plans spend 16.8 days in the hospital during the 12 months following birth, compared to 2.3 days for full-term babies. In addition, premature babies make an average of nine visits to the doctor's office during the first year of life, compared to six visits for healthy, full-term babies. All of this means time away from work for the parents. Mothers of premature babies spend more time on short-term disability (average of 29.1 days) over the six months following delivery than mothers of full-term babies (average of 18.9 days).3

Days on Short-term Disability (first six-months following delivery)
Mothers of Premature infants 29.1
Mother of full-term, healthy newborns 18.9
Difference 10.2 days

Wage-related cost of difference  $1,513

Productivity/synergy loss4 $2,766

Who Pays the Bill?
You do. All health care payers — public and private — share the cost of caring for premature babies. Employers and other private health plans are responsible for half the total hospital bill for prematurity, and the federal/state Medicaid program also bears a large share of the cost.5


And the Costs Mount
About 25 percent of the youngest and smallest babies who "graduate" from NICU care live with long-term health problems, including cerebral palsy, blindness and chronic conditions.6  A study recently published in the Journal of the American Medical Association found that children born prematurely were at greater risk for lower cognitive test scores and behavioral problems when compared to full-term children.7


Related Links
• March of Dimes PeriStats
• Prematurity Campaign Home Page


Finding Answers
Premature birth can happen to any pregnant woman and, in nearly half the cases, no one knows why. The March of Dimes has launched a national campaign to take on this devastating problem, to find out what causes it and how it can be stopped. Learn more about the Prematurity Campaign.


Your Next Steps...



1. Institute of Medicine. 2006. Preterm Birth: Causes, Consequences, and Prevention. National Academy Press, Washington, D.C. Employer research conducted and underwritten by Thomson Medstat. 2004.

2. Employer research conducted and underwritten by Thomson Medstat, 2004.

Based on analysis of births in 2001 followed for 12 months. Expenditures have been adjusted to 2004 dollars using the medical component of the Consumer Price Index. Population weights were developed using age, sex, and region strata from the 2002 Medical Expenditure Panel Survey Database.

Medstat's MarketScan research database is constructed from privately insured paid medical and prescription drug claims. Data contributors are generally large self-insured U.S. employers.

All employer-based dollar amounts were based on 2001 figures adjusted to 2004 using the medical component of the CPI.


3. Analysis tracks short-term disability for a six-month period following any birth occurring in the 2000-2002 time frame.

4. Wage-related cost was computed on the basis of 70% of national average hourly wages and benefits assuming a 40-hour work week. The national average value of wages and benefits was estimated by the Bureau of Labor Statistics to be $24.15. (Data contributors to Medstat's Health and Productivity Management Database paid, on average, 70% of total wages and benefits to their employees on Short-term Disability). Productivity and synergy losses were computed at 128% of the wages of absent workers per the methodology described by Nicholson, et. al., in “Measuring the Effects of Workloss Productivity With Team Production.” National Bureau of Economic Research Working Paper 10632.

5. Figures calculated by the March of Dimes Perinatal Data Center using data from the Agency for Healthcare Research and Quality, Nationwide Inpatient Sample, 2003. Estimates of inpatient stays and hospital charges for prematurity are based on stays with a diagnosis of prematurity/low birthweight.

6. Hack M, Flannery DJ, Schluchter M, et al. Outcomes in young adulthood for very-low-birth-weight infants. N Engl J Med. 2002;346:149-157.

7. Bhutta et al. Cognitive and behavioral outcomes of school-aged children who were born preterm. JAMA. 2002;288:728-737.