When organizations fail to engage birthing parents in their prenatal care, the result is higher mortality and morbidity for infants. These outcomes directly impact an organization’s quality scores—which can damage its brand and lead to financial penalties.
Business imperative: Reduce the total cost of care
Poor infant health outcomes contribute to the excess spending of the U.S. health system. For example, preterm births cost about $64,815 each, including infant medical care, maternal delivery costs, early intervention services, special education across the lifespan, and loss of labor productivity. But provider organizations and health plans can measure more direct costs, including those detailed below:
Costs to provider organizations under any payment model
Preterm birth and low birthweight alone account for half of U.S. infant hospitalization costs each year. Provider organizations under risk must bear these excess costs. However, even traditional fee-for-service providers can measure a financial impact. Clinical complications require leaders to elevate staffing and use more laboratory services and costly technology.
Costs to health plans
Employer-sponsored health plans spent an additional $6 billion on infants born prematurely compared to infants born with no complications in 2013. In 2016, a study found one national health plan spent about $8 billion on over 760,000 commercially insured preterm and low birthweight infants in their first six months of life. With nearly half of births covered by Medicaid (and about 70% of beneficiaries enrolled in managed care), preterm or low birthweight infants are nine times more expensive for Medicaid compared to uncomplicated births.
The short-term costs of infant health inequity are significant. But because disparate infant outcomes have far-reaching health implications across one’s lifespan, letting these dynamics persist makes it more challenging for health care organizations to inflect outcomes downstream—elevating long-term costs.