The Cost of Poor Birth Outcomes in Employer-Sponsored Health Plans

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Abstract
The authors examine the cost and incidence of poor birth outcomes in employer-sponsored health insurance plans. An extensive study of national inpatient and outpatient claims data for prenatal, delivery, and postnatal care of nearly 59,000 mother-infant pairs was conducted. All maternal and infant costs incurred over a 2-year period were analyzed, and, furthermore, the longitudinal claims experience of a cohort of 20,000 mothers and infants was examined in detail. The study revealed that 25% of deliveries resulted in poor birth outcomes, which accounted for 40% of total costs over a 2-year period. Extrapolated nationwide, the net direct medical care cost of poor birth outcomes in employer plans has been estimated at approximately $5.6 billion for 1990, approximately 3% of aggregate after-tax corporate profits that year. Costs related to maternity and infant care are a major source of cost for employer-sponsored health insurance plans. Poor birth outcomes represent significantly higher cost for both the mother and infant at all stages of care-prenatal, at birth, and postnatal. To the extent that poor birth outcomes relate to maternal behavior and are preventable, their very high and protracted cost may justify substantial health promotion activity by employers and insurers.