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Medical costs for one premature baby could cover a dozen healthy births

March 17, 2009

The medical costs that businesses pay to care for one premature baby for a year could cover the costs for nearly a dozen healthy, full-term infants, according to new statistics from the March of Dimes.

The average medical cost for healthy full-term babies from birth through their first birthday was $4,551 in 2007 dollars, of which more than $3,800 is paid for by health plans, according to the new data. For premature and/or low birthweight babies (less than 37 completed weeks gestation and/or less than 2500 grams), the average cost was nearly $50,000, of which more than $46,000 was borne by the health plan.

"Preventing preterm birth is one way we can begin to rein in our nation's skyrocketing health care costs and help businesses protect their bottom line," said Dr. Jennifer L. Howse, president of the March of Dimes. "The best prevention of prematurity is good maternity care."

Dr. Howse spoke today at a luncheon titled, "Healthy Babies, Healthy Business: Cutting Costs and Reducing Premature Birth Rates," co-hosted by the March of Dimes with the National Chamber Foundation, a think-tank affiliated with the U.S. Chamber of Commerce.

The March of Dimes offers businesses "Healthy Babies, Healthy Business®," a Web-based pregnancy and newborn health information portal that helps improve employee health as well as the health of the bottom line. "HBHB" provides a secure and easy way for employers to deliver important accurate, up-to-date health information directly to their employees and dependents and reduce corporate health care costs. More information is available at: marchofdimes.com/hbhb.

Preterm birth is a serious health problem that costs the nation more than $26 billion annually, according to a report from the Institute of Medicine. Nearly 543,000 babies - one out of every eight - are born too soon each year in the United States and the rate has risen more than 36 percent since the early 1980s. Preterm birth is a leading cause of newborn death and babies who do survive face the risk of lifelong health conditions.

Other speakers at the luncheon included the Acting U.S. Surgeon General, RADM Steven K. Galson, M.D., MPH, and:

* Bruce Josten, executive vice president of the U.S. Chamber of Commerce;
* Alan R. Fleischman, M.D., March of Dimes senior vice president and medical director;
* Deborah Campbell, M.D., Albert Einstein College of Medicine; American Academy of Pediatrics (AAP) Section on Perinatal Pediatrics;
* Hal C. Lawrence, III, MD, vice president of practice activities, American College of Obstetricians and Gynecologists;
* Jeffrey Kang, MD, chief medical officer, CIGNA Corporation.
* Anthony Wisniewski, executive director of healthcare policy, U.S. Chamber of Commerce.

"CIGNA has seen a savings of more than $6,000 per pregnancy for our employees enrolled in our Healthy Pregnancies, Healthy Babies program," said Dr. Jeffrey Kang, CIGNA's chief medical officer. "Cost is a universal concern for all employers, big or small. Many small businesses today may not have the maternity care program that a company like CIGNA has, yet the financial impact to a small company is enormous when just one employee's baby is born too soon."

The March of Dimes contracted with Thomson Reuters to estimate the cost of prematurity and complicated deliveries to large employer-based health plans for infants born in 2005. Analyses of medical costs included inpatient and outpatient medical care and prescription drugs for infants from birth through the first year of life and for mothers including the delivery, prenatal services during the nine months prior, and three months postpartum. Costs have been adjusted to 2007 dollars.

The analyses also found that premature infants spent on average more than 14 days hospitalized before their first birthday, compared to just over 2 days for healthy, full-term infants and that they averaged more than 21 outpatient medical visits compared to just 14 for full-term infants.

When combined, infants and maternity costs for a premature infant were four times as high as those for an infant born without any complications, $64,713 and $15,047 respectively, with health plans paying over 90 percent of those costs.

A separate analysis showed that maternity care costs for complicated deliveries, independent of the infant status and costs, were also significantly higher than the costs for uncomplicated deliveries -- $14,667 compared to $10,652.

March of Dimes Foundation