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The Costs of Preterm Birth
Everyone is affected by preterm birth in some way –
families, businesses, schools, health professionals and
the nation as a whole. The emotional costs for families
can be devastating and life changing. The financial costs
affect us all.
Employers and other private health plans are
responsible for half of the total hospital costs for
preterm birth. The federal/state Medicaid program
(funded by all taxpayers) also bears a large share of
the cost. Preterm birth accounts for almost half of
all hospital charges for infants. The costs of preterm
birth often do not end when babies leave the hospital.
About 25 percent of the earliest and smallest babies
who “graduate” from the neonatal intensive care unit
(NICU) live with long-term health problems, including
cerebral palsy, blindness and other chronic conditions.
Nationally, the Institute of Medicine has calculated
that preterm birth accounts for at least $26 billion of
annual costs.
Prematurity hospital costs in Kentucky
• Total NICU charges related to preterm birth in
Kentucky in 2005 were $204 million (Kentucky
Hospital Discharge Database, 2005).
• Late preterm births (34-36 weeks) are extremely
costly for Kentucky. Kentucky Medicaid paid millions
of dollars for care of preterm infants, but the costs
were more than four times as much for the group of
babies born at 35-36 weeks (late preterm) as for the
group of babies born at less than 26 weeks gestation
(“micropreemies”).
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Impact on business and community
• 11 percent of newborns covered by employer health
plans in the United States are born prematurely.
• Direct health care costs to employers for a premature
baby average $41,610, which is 15 times higher than
the $2,830 for a healthy, full-term infant.
• On average, premature babies spend 14.5 days longer
in the hospital during the 12 months following birth
than full-term babies
• Mothers of premature babies spend 10.2 days more
on short-term disability over six months following
delivery than mothers of full-term babies. Annually,
this additional cost to employers in lost productivity
averages $2,766.
• A study of educational costs in Florida for preterm
infants when they attended kindergarten found that
if only 9 percent of babies born weighing less than
3½ pounds could have made it to 5½ pounds, the
savings would have been more than $1 million in
kindergarten costs.
• A California study reviewed discharge records of single
newborns for one year and concluded that $49,906,000
could have been saved if deliveries between 34 and 37
weeks that were not medically necessary could have
been avoided.
• A Massachusetts study of costs for early intervention
services determined costs per child for babies born at
24 to 31 weeks were seven times the cost of services
for full-term infants; even in babies born 32 to 36
weeks, the cost per child was twice as high as that for
ukhealthcare.uky.edu
•
1-800-333-8874
full-term infants. The costs to the early intervention
system were twice as high for the group of latepreterm as they were for the extremely premature
infants.
The emotional toll
• Many preterm infants face life-threatening
complications. This can be in the NICU or even after
the baby goes home.
• Day-to-day life is completely disrupted for many
families of premature infants. Parents spend hours
providing special care for their premature infant and
may need extra time away from their jobs. Families
face financial stress as they struggle to pay the high
hospital costs as well as travel and housing and time
off work.
• Even long after the NICU stay, premature babies
often require more medical care and experience
more frequent behavior problems, as well as more
difficulties in school.
References
• www.peristats.com
• Preterm birth - Associated costs of early intervention
services: An analysis by gestational age. Pediatrics,
vol. 119, pp. 866-874, 2007.
• Maternal and infant factors associated with excess
kindergarten costs. Pediatrics, vol. 114, no. 3,
pp. 720-728, 2004.
• The cost of prematurity: quantification by gestational
age. Obstetrics & Gynecology, vol. 102, pp.488-492, 2003.
• Preterm birth: Causes, consequences, and prevention.
Institute of Medicine Committee on Understanding
Premature Birth and Assuring Healthy Outcomes,
Board on Health Sciences Policy. Washington, DC, The
National Academies Press, 2006.
• Dealing with a premature baby often creates stress
within families and puts a strain on marriages.
Healthy Babies Are Worth the Wait® is a multifaceted
partnership of the March of Dimes, the Johnson
& Johnson Pediatric Institute and the Kentucky
Department for Public Health. The primary goal of
the initiative is a 15 percent reduction in the rate of
“preventable” single preterm births – particularly
babies born late-preterm (four to six weeks early) – in
three targeted intervention sites in Kentucky: King’s
Daughters Medical Center in Ashland, Trover Health
System Regional Medical Center of Hopkins County and
the University of Kentucky Albert B. Chandler Hospital
in Lexington. Health care teams at each site provide
mothers-to-be with an integrated approach of education,
counseling and clinical care.
For more information, call 1-800-333-8874 or visit
our Web site at ukhealthcare.uky.edu/obgyn or the
following sites:
www.prematurityprevention.org
www.marchofdimes.org
www.nacersano.org
UK HealthCare is UK Chandler Hospital; Kentucky Children’s Hospital; UK Good Samaritan Hospital;
Markey Cancer Center; Gill Heart Institute; Kentucky Neuroscience Institute; and the clinical activities
of the UK Colleges of Medicine, Dentistry, Pharmacy, Health Sciences, Public Health and Nursing.