Health Plans Spend $6 Billion Extra on Premature Births

A small number of infants born early with major birth defects account for a huge share of what health plans spend on childbirth, raising questions about what can be done to prevent early births, including improving the health of women before they get pregnant.

Researchers from the University of Utah and CDC published a study today in the journal Pediatrics, which found that 1 in 33 babies has a birth defect, and that 5500 infants die each year because of them. Those who live carry risks of physical, cognitive, and social challenges, which bring costs to health plans, schools, caregivers, and families.

About 1 in 10 infants in the United States are born before 37 weeks’ gestation, which can affect survival and quality of life. While many babies that arrive this early grow up to be healthy, a small percentage need medical care that extends beyond infancy, much of which falls to employer-sponsored health plans.

The new study looked at claims data from a group of employer-sponsored plans for live births for the year 2013, and used the data to calculate spending for the first year of life for employer-sponsored plans for infants born preterm. The analysis included both overall spending and spending for major birth defects.

The plans spent $2 billion on infant care in 2013; of that amount, one-third was spent on 7.7% of infants born prematurely. With the plans spending an average of about $47,100 per infant, the premature births cost the plans an extra $600 million during the first year of life.

“Extrapolating to the national level, we projected aggregate employer-sponsored plan expenditures of $6 billion for infants born preterm during 2013,” the authors wrote.

Infants with major birth defects accounted for 5.8% of the preterm births but 24.5% of the spending during infancy. Using an algorithm to identify preterm infants, the researchers concluded that actual spending was even higher: $78,000 per preterm infant, or $14 billion a year nationally.

“The contribution of this study is to start to tweak out the contribution of birth defects to that overall cost burden so we can start to prioritize efforts at prevention of both preterm births and birth defects,” Norman J. Waitzman, PhD, chair of the of Department of Economics at the University of Utah, said in a statement. “This is a multi-billion-dollar burden. In order to prioritize interventions, we have to have an accurate estimate of what the costs are and how those are broken down because often times interventions are tailored to specific populations.”

What can be done? Scott D. Grosse, PhD, a research economist at CDC’s National Center on Birth Defects and Developmental Disabilities, said it’s important for women to focus on getting healthy well ahead of pregnancy.

While individual action is important, public education campaigns can work. For several decades, physicians have encouraged women to take prenatal vitamins, including folic acid to prevent neural tube defects. A major campaign to increase consumption of folic acid among women of child-bearing age in Great Britain and Ireland helped lower neural tube birth defects in those countries. Women of British and Irish heritage in the United States have similarly been urged to add folic acid to their diets during pregnancy.

“Before getting pregnant, women should talk to their doctor and follow guidance about eating healthy, including enough folic acid, and avoiding tobacco and alcohol around the time of conception, as well as throughout pregnancy,” Grosse said.

Much more work is needed to understand the connection between preterm births, birth defects, and the associated costs, Waitzman said.

Reference

Grosse SD, Waitzman NJ, Yang N, Abe K, Barfield WD. Employer-sponsored plan expenditures for infants born preterm [published September 21, 2017]. Pediatrics. DOI: 10.1542/peds.2017-1078.