Public Release: 

Babies born preterm cost businesses big money: Hospital charges estimated at $7.4 billion annually

March of Dimes analysis finds direct health care costs for preemies nearly 15 times greater than full term babies

March of Dimes Foundation

WHITE PLAINS, N.Y., MARCH 28, 2005 - Employers pay nearly 15 times more for babies born prematurely -- in their first year of life -- than for full term babies, with an average cost of $41,610 for a premature baby vs. $2,830 for a healthy, full-term baby, the March of Dimes said today.

The March of Dimes noted that babies born prematurely spend significantly longer time in hospitals , have more outpatient visits, and more medical needs. The analysis was underwritten and conducted for the March of Dimes by Thomson Medstat using their database of large self-insured U.S. employers.

In a separate analysis, the March of Dimes estimates that in 2002, almost half of hospital charges for premature infants, or about $7.4 billion, were billed to employers and other private insurers. This estimate was derived using the Nationwide Inpatient Sample from the Agency for Healthcare Research and Quality.

"Premature birth is a serious and common problem that places enormous emotional pressures on nearly 500,000 families each year in this country," says Dr. Jennifer L. Howse, president of the March of Dimes. "Prematurity also creates enormous financial pressures on businesses and on the economy."

"Employers need to be aware of the consequences of premature birth," says Charlene Parsons, vice president, Total Rewards at CIGNA. "There are costs related to the health and wellbeing of the infant and the mother, as well as an emotional and financial cost to the family and the workplace, including high health and productivity costs. As a company where the majority of employees are female, we know healthy babies make business sense -- for our employees' own wellbeing and for the bottom line. That's why CIGNA has partnered with March of Dimes for more than a decade to raise funds to fight premature birth and other infant health problems."

Prematurity is the leading cause of death in the first month of life, and a major contributor to disability, the March of Dimes says. Babies who survive may suffer lifelong consequences, including cerebral palsy, mental retardation, chronic lung disease, vision and hearing loss.

Besides the direct cost to businesses, premature birth also causes lost productivity. The Thomson Medstat analysis found that premature babies spend nearly 17 days in the hospital over the 12 months following birth, compared to 2 to 3 days for healthy, full term babies and they visit the doctor's office 50 percent more often. All of this means more time away from work for parents.

The analysis also showed that mothers of premature babies averaged 29.1 days away from the office over the six months following delivery, compared to 18.9 days for mothers of full-term babies.

According to the analysis, the simple wage-related costs of extra time on short-term disability average $1,513 per delivery. Along with lost teamwork and synergy, the estimated impact of this loss of work time may be as much as $2,766 per delivery for each employee.

Employers can access free information to help prevent premature birth through the March of Dimes Healthy Babies, Healthy Business program at

The March of Dimes will distribute a new brochure on premature birth's "Cost to Business," funded by Adeza Biomedical, which includes the Thomson Medstat findings.


The March of Dimes is a national voluntary health agency whose mission is to improve the health of babies by preventing birth defects and infant mortality. Founded in 1938, the March of Dimes funds programs of research, community services, education, and advocacy to save babies and in 2003 launched a multi-year campaign to address the increasing rate of premature birth. For more information, visit the March of Dimes Web site at or its Spanish language Web site at

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