Premature Babies Cost Employers $12.7 Billion Annually

March of Dimes Releases New Report about the High Cost of Preterm Birth

White Plains, New York | Friday, February 7, 2014

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Preterm birth costs employers more than $12 billion in excess health care costs, according to new statistics from the March of Dimes. The high cost of preemies was spotlighted recently when AOL cited cuts to the company’s 401(k) benefits on two “distressed” babies born to women working at the company.

"At the March of Dimes, we don't believe it's appropriate to single out individual employees' health care costs when explaining a financial decision," said Dr. Jennifer L. Howse, President of March of Dimes. "However, the fact that premature birth is costing companies millions of dollars is something we cannot afford to ignore. The March of Dimes stands ready to work with AOL and all interested companies on developing policies that can help to reduce employees’ risk of preterm birth."

According to the March of Dimes , which commissioned an analysis by Truven Health Analytics, Inc., on the costs of prematurity to businesses, the average medical cost for a healthy, full-term baby from birth through the first year was $5,085, of which $4,389 is paid by employer health plans, according to the new data. For premature and/or low birth weight babies (less than 37 weeks gestation and/or less than 2500 grams), the average cost was $55,393, of which $54,149 was paid by the health plan.

“Childbirth and newborn care together are the most expensive medical conditions billed to employer-based insurers,” said Dr. Howse. “By investing in the prevention of preterm birth, employers can help families and rein in their health care costs at the same time.”

Dr. Howse said the March of Dimes recommends 14 steps businesses can take to support maternal and newborn health and offers “Healthy Babies, Healthy Business®,” a web-based pregnancy wellness program. More information is available at marchofdimes.org/hbhb.

The March of Dimes contracted with Truven Health Analytics, Inc. to estimate the cost of prematurity and complicated deliveries to large employer-based health plans for infants born in 2009. 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 to birth, and three months postpartum. Costs have been adjusted to 2011 dollars.

The analyses found that premature and low birth weight infants spent an average of 15 days in the hospital, compared to just over 2 days for healthy, full-term infants. Premature babies averaged about 20 outpatient medical visits compared to just 14 for full-term infants.

About March of Dimes

March of Dimes leads the fight for the health of all moms and babies. We support research, lead programs and provide education and advocacy so that every baby can have the best possible start. Building on a successful 80-year legacy of impact and innovation, we empower every mom and every family.

Visit marchofdimes.org or nacersano.org for more information. Visit shareyourstory.org for comfort and support. Find us on Facebook and follow us on Instagram and Twitter.