Health Plans Spend More Than $6 Billion on Premature Babies

Health Plans Spend More Than $6 Billion on Premature Babies

Most hospitals are not fully prepared to handle low-weight births.

All parents know raising children is expensive. But not all employers know that when those children come into the world sooner than expected, they’re paying a lot more for their medical care.
A new study by researchers from the Centers for Disease Control and Prevention and the University of Utah estimated that employer-sponsored health plans are paying more than $6 billion extra each year to care for infants born prematurely. The study appeared in the journal Pediatrics.
A second study, released earlier this year by the Leapfrog Group, suggests that ill-prepared hospitals that deliver high-risk, low-weight babies may be contributing to the problem. The Leapfrog Group is a Washington-based employer coalition focused on patient safety and health care costs.
In the first study, researchers analyzed the medical claims paid by commercial health plans for 173,649 babies born in 2013. Some 13,426 of the babies, or 7.7 percent, were born prematurely, meaning at 36 weeks gestation or less. The first-year medical bills of the all the babies totaled about $2 billion. Of that, about $736.7 million, or more than 37 percent, was incurred by the prematurely born infants.
The average first-year medical costs of a preterm baby was $54,873 compared with just $7,774 for a non-preterm baby. Using the difference—$47,099—and extrapolating the sample results nationally, the researchers projected that health plans spend $6.3 billion extra each year to care for premature babies.
Employers and their health plans should encourage workers and enrollees to seek effective prenatal care to minimize the chances of a preterm birth, the researchers said.
“Before getting pregnant, women should talk to their doctor and follow their guidance about eating healthy, including getting enough folic acid, and avoiding tobacco and alcohol around the time of conception as well as throughout pregnancy,” said Scott Grosse, a research economist at the CDC and one of the authors of the study, in a press release.

Employers and their health plans also may want to incent workers and enrollees to delivery their babies at hospitals well-equipped to handle premature births and care for preterm infants effectively and safely without incurring unnecessary health care costs.
The Leapfrog Group’s report, released in March, found that just 23 percent of the 1,859 hospitals that voluntarily participated in its 2016 patient safety survey met all of the group’s three standards for low-weight babies. Babies are considered low-weight if they weigh less than 1500 grams (or about 3 pounds, 5 ounces) at birth.
To safely deliver and care for low-weight newborns, the Leapfrog Group says hospitals should:

  • Have an onsite or co-located neonatal intensive care unit
  • Deliver and admit at least 50 low-weight babies per year
  • Ensure that at least 80 percent of mothers at risk for premature deliveries receive antenatal steroids prior to delivery

“It’s essential that a mother be able to choose a hospital with the experienced staff and specialized resources to ensure she and her baby receive the best care,” the report said.