Slow down the stork: Preterm deliveries are costing your plan

Something is costing your health plan a whole lot of money, and it's largely due to uninformed choice. No, it's not lax benefit selections, but rather early induced deliveries.

That's not to say that some babies don't need to be induced before full term (40 weeks gestation) because of medical reasons, but a growing trend shows that hospitals are electing this option because of revenue and doctors' schedules or because moms simply want to schedule their births.

According to a report published earlier this year by The Leapfrog Group, an employer-driven hospital watchdog, 61% of surveyed hospitals reported an equal or worse rate from the previous year of early elective newborn deliveries. Some progress was made, with a 65% increase in hospitals who kept their early elective rate to 5% or less of all births.

According to Leapfrog, there is still wide variation among hospitals. Rates of early elective deliveries ranged from less than 5%, which is Leapfrog's target for all hospitals, to over 40%. Although it is difficult to determine conclusively, studies suggest that the increased use of elective induction of labor - which is not recommended under any circumstances - combined with cesarean section between 34 and 36 weeks, have contributed to the increase in the late preterm births.

"We need to make sure employers and consumers are educated," says Leapfrog CEO Leah Binder. She says the key may be pushing health plans to pay differently - more for vaginal births and less for elective preterm deliveries. "There are clear financial incentives [for hospitals to induce]." She adds that benefit design can play a big role in deterring women from going the elective induced route - say, if an employee has to pay larger out-of-pocket costs for an elective birth. According to the Agency for Healthcare Research and Quality, in 2003, a C-section with no complications cost $11,524. A vaginal birth with no complications was nearly half of that, $6,239.


Effects on infant health

Recent studies have shown that as many as 36% of elective deliveries now occur before 39 weeks, and many of these early deliveries contribute to costly and avoidable complications. In the United States, one in eight babies is born prematurely, according to the March of Dimes. Premature birth costs society more than $26 billion a year and takes a high toll on families, though exact costs for a health plan are unknown. When asked about the cost, Helen Darling, president of the National Business Group on Health, told EBN, "We don't need to [know what the costs are]; it's true that early deliveries are very costly. But for trying to get people to basically not have a delivery before 39 weeks, the case has to be made on the impact on the baby."

Dr. Billie Lou Short, chief of neonatology at Children's National Medical Center, says that last year, 19% of admissions at Children's National Medical Center were newborns who fell into the category of "early term," or 37 to 38 weeks gestational age. "These infants came to the Children's NICU because of morbidity related to being delivered early," Short notes. Short-term morbidities of an early term infant include breathing problems, temperature instability, increased bilirubin resulting in in-hospital treatment, infection, longer-hospital stays and a higher mortality rate.

According to the World Health Organization, there is no medical reason for any region to have a cesarean birthrate higher than 15%. However, in November of 2005, the Centers for Disease Control and Prevention reported the national cesarean birth rate at 29.1%, which was the highest rate ever recorded, involving more than a quarter of all births. Preterm birth costs total $26 billion annually, or $51,500 for every infant born prematurely. Nearly half of these costs, or almost $13 billion, fall to employers and other private insurers.

"As the practice continued, more mothers and physicians opted to follow it. However, as the health risks to the newborn became apparent, public health agencies raised the alert that this practice was fraught with potential hazards to newborn," says Dr. John Wright, physician executive at WellPoint. WellPoint is one of several insurance companies that have partnered with Leapfrog to work on reducing their rates and educating employers, who can then educate employees.

He suggests simple measures, like having health plans ask in-network hospitals to review data and validate that they are taking steps to avoid preterm deliveries. Wright also says another factor leading to the early elective deliveries is a lack of a correct gestational age. If a doctor doesn't have the correct time for when the fetus was conceived, a patient's delivery date can be off by days or weeks.

"Most physicians and hospitals are aware of the problem; however, without a good gestational age, it's easy to see that even those practitioners that are following evidence-based guidelines could participate in a preterm delivery," Wright says.

In addition to strategies like lower cost-sharing or incentives for women who participate in prenatal education programs and monitoring labor induction rates, a key strategy is educating women about the dangers of early induction/delivery.

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