• Eleven percent of newborns covered by employer health plans are born prematurely.
• Direct health care costs to employers for a premature baby average $41,610 —15 times higher than the $2,830 for a healthy, full-term delivery.
• Additional costs to employers in lost productivity average $2,766.

New Data
The costs of prematurity are considerable. New data from Medstat's MarketScan database, developed for the March of Dimes, illustrate the serious and far-reaching impact of this national problem (1).

Direct Employer Health Care Costs: $41,610
The direct health care costs to employers for premature babies during the first year of their lives average $41,610, compared to $2,830 for babies born healthy and full term.

Table 1. Costs Paid by Employers (1, 2)
		Full-term delivery, no complications		Delivery with diagnosis of prematurity
Inpatient (hospital)		$1,210		$35,034
Physician office visits		$1,518		$6,079
Drugs		$102		$497
		$2,830		$41,610

Cost of Low Productivity: $2,766   
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).

The simple wage-related costs to employers of the extra time on short-term disability average $1,513. In terms of lost productivity and teamwork synergy, the estimated impact may be much greater: as much as $2,766. Either way, the costs to employers are considerable (4)

Table 2. Average Days on Short-Term Disability (first six months following delivery)
Mothers of premature infants		29.1
Mothers of full-term, healthy newborns		18.9
Difference		10.2 days
Wage-related cost of difference		$1,513
Productivity/synergy loss		$2,766

Total Additional Costs: $41,456
When the costs of prematurity are added together, the impact on employers becomes clear:

Table 3. Average Cost Differential: Premature Infant (first 12 months of life only)
Hospital expenses		$33,824
Physician office visits		$4,561
Drug expenses		$395
Productivity/synergy loss		$2,766
Average additional cost to employer per premature birth vs. full-term birth (when mother is an employee)		$41,546

No one knows the total annual cost of prematurity to all U.S. employers, but we do know that the hospital bills alone are substantial. Based on estimates from the national Healthcare Cost and Utilization Project, in 2002, approximately $7.4 billion in hospital charges for premature infants, almost half the U.S. total, were billed to employers and other private insurers (5).

The Bottom Line
A national crisis calls for a united response
The March of Dimes is leading the fight to defeat prematurity with a multiyear, multimillion-dollar national campaign to help the nation reduce the rate of premature births from 12.1 percent in 2002 (6) to the national Healthy People 2010 objective of no more than 7.6 percent.

We're attacking the problem from all vantage points by:

• Funding vital research into ways to prevent and treat premature birth
• Educating women about risk reduction including the signs of preterm labor
• Assisting health professionals in evaluating patient risks
• Expanding access to health care

There is much that companies can do, as well, to address the problem of premature birth and help employees have healthy, full-term babies. Providing health insurance to cover adequate preconception and prenatal care for employees is vital. Other important steps to consider:

• Offer access to comprehensive employee assistance programs
• Create pregnancy-friendly worksites to reduce physical and environmental stressors for pregnant employees
• Provide onsite educational opportunities such as seminars and access to materials relating to pregnancy, childbirth and infant care
• Give information on relevant community or online resources

The March of Dimes offers businesses a free intranet-based pregnancy and newborn health information program called Healthy Babies Healthy Business. HBHB enables companies to provide their employees with accurate, up-to-date information on pregnancy and newborn health issues from a respected authority in the field. An online demonstration of Healthy Babies Healthy Business is available.

Everyone is affected by prematurity in some way—families, businesses, schools, health professionals, the nation as a whole. Everyone can and must help because when our nation's babies are in danger, a united and zealous response is called for.

Brochure Available
The March of Dimes has published a brochure on the costs of premature birth to business (item #37-1929-05). To order, call (800) 367-6630 or (770) 280-4115 outside the United States. Funding for this publication was provided by an unrestricted grant from Adeza Biomedical.

Thomson Medstat conducted and underwrote the research upon which this article is based.


Notes

1. 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 (CPI). 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.

2. All employer-based dollar amounts are 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 timeframe.

4. Wage-related cost is computed on the basis of 70% of national average hourly wages and benefits, assuming a 40-hour workweek. The national average value of wages and benefits is currently estimated by the Bureau of Labor Statistics to be $24.15. (Data contributors to Medstat's Health and Productivity Management Database pay, on average, 70% of total wages and benefits to their employees on short-term disability). Productivity and synergy losses are 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. Agency for Healthcare Research and Quality, 2002 Nationwide Inpatient Sample, prepared by March of Dimes Perinatal Data Center, 2004.

6. National Center for Health Statistics. Final 2002 natality data.
   
   May 2007