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Economic impact of preterm birth and benefits of prematurity prevention on the US healthcare system.

Introduction: a disproportionate share of costs

Preterm birth (PTB) remains the leading cause of neonatal morbidity and mortality of nonanomalous singleton infants in the United States. (1) Though only 8% to 10% of babies are preterm in the United States, they account for a disproportionate (approximately half) share of all infant hospitalization costs. (2) In 2007, the Institute of Medicine reported that PTB cost the United States $26.2 billion per year. (3) Babies born at the earliest gestational ages (<28 weeks' gestation) have the greatest cost per individual, infants born during the later preterm period (32-36 weeks' gestation) contribute unequally to overall costs, due to the larger number of babies born during this time period. (2)

The process of determining the true economic burden of a condition to a family, health care system, community, and society as a whole, is challenging. Both costs and charges have been described as financial metrics to gauge services provided. Charges are prices that occur on patient bills, and reflect pricing decisions. (4) Charges incorporate payer policies and other factors unrelated to resource use. In contrast, costs are a more accurate assessment of the monetary amount required to provide the service. (4) On average, charges exceed costs. For this reason, hospital costs are likely a better estimate of economic impact than charges. (4) The remainder of this article will focus on the costs associated with PTB in the United States, as well as the cost savings that may be realized with the implementation of various preventative and/or treatment strategies.

Cost of one PTB in the United States

Research and policy often focus on the immediate costs of prematurity, specifically, the cost of immediate neonatal hospitalization. While these costs are substantial, they tell only part of the story and may underestimate the impact of true societal financial impact of PTB. A number of other factors need to be taken into consideration. Maternal costs, including costs associated with lost wages from hospitalization or activity restriction, may be significant. The impact of prematurity can last a lifetime, and have a considerable and measurable economic and societal burden. As a child who was born premature ages, it becomes increasingly difficult to track medical visits and attribute specific medical care to prematurity per se. A number of studies have evaluated the costs of prematurity in different settings. Unfortunately, it is difficult to compare data between some studies, due to study design, changes in provision of neonatal and perinatal care, increasing variability in outcomes and costs, patient selection/inclusion, and followup methodology. Some studies include nonsurviving neonates as a separate group from survivors when examining costs, while other studies evaluate all neonates delivered at each gestational age as a group.

The largest comprehensive estimate of the cost of PTB was performed by the Institute of Medicine in 2007; at that time, the estimated cost was $51,600 per preterm infant, including $33,200 for medical care, $3800 for maternal delivery costs, $1200 for early intervention services, and $2200 for special education services. (3) Adjusted for inflation, this is $59,544 in 2016. A recent cost analysis of prospectively obtained data from 2802 women found that the main cost driver for both singleton and multiple pregnancies was the initial length of neonatal hospitalization. (5) Other factors contributing significantly to these initial costs were related to airway treatment needed (continuous positive airway pressure, intubation, surfactant). (5)

While babies born at the earliest gestational ages usually have the greatest disabilities, survivors of late PTB may contribute to a larger portion of societal burden, some of which may be difficult to quantify. Differences are seen in kindergarten behavior/need for retention, (6) first grade academic performance, (7) ultimate level of educational attainment as an adult and likelihood of receiving public disability assistance, (8) among those delivered prior to 37 weeks' gestation. One study in Sweden estimated that infants delivered 33 to 37 weeks' gestation account for 74% of adult disability between 23 and 29 years of age (n=522,310). (9) These researchers also estimated that 13.2% of young adults born at 24 to 28 weeks' gestation and 5.6% of those born at 29 to 32 weeks' gestation required economic assistance due to medical or social disabilities.

Preventing PTB: its impact on Medicaid

In the United States in 2010, Medicaid provided coverage for 48% of births; in several states the figure was over 60%. (10) This rate has increased, on average, 19% nationally since 2008. In light of the Affordable Care Act and Medicaid expansion, these rates are expected to rise. Additionally, Medicaid pays for twice as many adverse outcomes as do private insurers. For most Medicaid payers, NICU admissions constitute the most expensive hospitalizations. Quality improvement initiatives to PTB can bring significant savings to Medicaid budgets via equitable access to screening modalities to identify patients at risk, and the utilization of therapeutic approaches demonstrated to reduce the risk of PTB. The Medicaid Health Plans of America, a leading trade association solely focused on representing Medicaid health plans, has published an issue brief with resources to address the key issues these plans face regarding the management of PTB. (11)

Clinical and economic effects of PTB prevention strategies

Despite the magnitude of the clinical problem, our ability to prevent and treat PTB remains imperfect. Community-based strategies typically focus on health behaviors (teen pregnancy, smoking), while clinical intervention approaches aim the highest risk groups (women with multiple gestations, prior PTB, short cervix), with varying degrees of success. Nonetheless, even small reductions in rates of PTB have the potential to lead to significant cost savings (TABLE 1). Progestogen formulations are among the most commonly used clinical regimens, though these strategies remain imperfect.

Though the initial study by Meis and colleagues was reported in 2003,17-alpha hydroxyprogesterone caproate (17P) for the prevention of recurrent PTB was not commercially approved by the FDA until February 2011. 17P is currently available in the United States under the trade name Makena[R] (AMAG Pharmaceuticals). Between 2003 to 2011, 17P was available only from compounding pharmacies, and some women had difficulty obtaining the drug. Despite this, it is currently estimated that 17P prevents 10,000 PTBs each year. (12)

Despite clear societal guidelines from the Society for Maternal Fetal Medicine (SMFM) and The American Congress of Obstetrics and Gynecology (ACOG) regarding use, (13,14) and widespread commercial availability, 17P remains underutilized. In 2009, 6 years after the original Meis study was published, one survey of obstetric providers found that only 74% (254/345) women were routinely offered progestogen for recurrent prematurity prevention. (15) Others have reported that only approximately half of eligible women receive 17P. (16,17) Although some women experience recurrent PTB despite 17P therapy, recently, increased awareness of the benefits of even modest pregnancy prolongation with 17P (eg, a 3 week delay in delivery compared to the gestational age of the earliest prior PTB) has been recognized recently. (18,19) Indeed, cost savings (neonatal costs prevented) of even a 1 week increase in delivery gestational age are estimated at $15,972 for infants born at 32 weeks and $4528 for infants born at 34 weeks (2003 costs). (20)

Unfortunately, 17P has only been proven effective in the prevention of PTB among women with a prior spontaneous PTB; it is ineffective for women without a prior preterm delivery who experience cervical shortening, women carrying a twin pregnancy, and for acute tocolysis. (21) Vaginal progesterone is commonly utilized in the United States for prematurity prevention among women who develop a short mid-trimester cervical length, and has been shown in several studies to prolong pregnancy. (22,23)

Pizzi and colleagues recently calculated the cost and cost-effectiveness of vaginal progesterone vs placebo for treatment of a short cervix 10 mm to 20 mm, as informed by patient-level data from a randomized controlled trial published by Hassan. (22,24) Both high-risk and low-risk (defined based on PTB history) women were included in the model, with separate estimates for each group, accounting for different risks of PTB among different populations. They estimated cost savings of $24,071 per PTB averted with vaginal progesterone, and reported that vaginal progesterone realized cost savings and cost-effectiveness in 79% of simulations. (24) Other cost-effectiveness models, all of which assumed a 39% to 45% reduction with vaginal progesterone, have come to similar conclusions. (25-27)

However, as with other cost-effectiveness models, the results are highly dependent on the actual clinical effectiveness on the medication in clinical practice. Recently, many experts have questioned the prior estimates; a recent reevaluation based on a more conservative assumption that the medication reduces the likelihood of PTB by 11% shows that cervical length screening and effectiveness are not cost-effective. (28) Clearly, there is clinical equipoise, and the vaginal progesterone effect size is critical in determining whether or not vaginal ultrasound screening strategies and subsequent treatment with vaginal progesterone are cost-effective.


The impact of PTB extends beyond physical, social, and emotional boundaries to additionally exert financial stress on individuals and society. Recent local and national efforts to reduce the rate of PTB have, for the first time in decades, resulted in a decrease in the rates of PTB. Since even moderate and late PTB are associated with considerable risk for long-term emotional, social, and physical disabilities requiring long-term economic resources and assistance, these prevention and treatment efforts should be continued in order to realize significant cost savings.


(1.) Martin JA, Hamilton BE, Osterman MJ, Curtin SC, Matthews TJ. Births: final data for 2013. Natl Vital Stat Rep. 2015;64(1):1-65.

(2.) Russell RB, Green NS, Steiner CA, et al. Cost of hospitalization for preterm and low birth weight infants in the United States. Pediatrics. 2007;120(1):e1-9.

(3.) Behrman RE, Stith A. Preterm Birth: Causes, Consequences, and Prevention. Washington, DC. National Academy Press (US), 2007

(4.) Finkler SA. The distinction between cost and charges. Ann Intern Med. 1982;96(1):102-109.

(5.) van Baaren GJ, Peelen MJ, Schuit E, et al. Preterm birth in singleton and multiple pregnancies: evaluation of costs and perinatal outcomes. Eur J Obstet Gynecol Reprod Biol. 2015;186:34-41.

(6.) Morse SB, Zheng H, Tang Y, Roth J. Early school-age outcomes of late preterm infants. Pediatrics. 2009;123(4):e622-629.

(7.) Williams BL, Dunlop AL, Kramer M, Dever BV, Hogue C, Jain L. Perinatal origins of first-grade academic failure: role of prematurity and maternal factors. Pediatrics. 2013;131 (4):693-700.

(8.) Moster D, Lie RT, Markestad T. Long-term medical and social consequences of preterm birth. N Engl J Med. 2008;359(3):262-273.

(9.) Lindstrom K, Winbladh B, Haglund B, Hjern A. Preterm infants as young adults: a Swedish national cohort study. Pediatrics. 2007;120(1):70-77.

(10.) Markus AR, Andres E, West KD, Garro N, Pellegrini C. Medicaid covered births, 2008 through 2010, in the context of the implementation of health reform. Womens Health Issues. 2013;23(5):e273-280.

(11.) Medicaid Health Plans of America Center for Best Practices: Preterm Birth Prevention: Evidence-Based Use of Progesterone Treatment Issue Brief and Action Steps for Medicaid Health Plans, November2014. Accessed June 7, 2016.

(12.) Schoen CN, Tabbah S, lams JD, Caughey AB, Berghella V. Why the United States preterm birth rate is declining. Am J Obstet Gynecol. 2015;213(2):175-180.

(13.) Society for Maternal-Fetal Medicine Publications Committee waoVB. Progesterone and preterm birth prevention: translating clinical trials data into clinical practice. Am J Obstet Gynecol. 2012;206(5):376-386.

(14.) Committee on Practice Bulletins-Obstetrics TACoO, Gynecologists. Practice bulletin no. 130: prediction and prevention of preterm birth. Obstet Gynecol. 2012;120(4):964-973.

(15.) Henderson ZT, Power ML, Berghella V, Lackritz EM, Schulkin J. Attitudes and practices regarding use of progesterone to prevent preterm births. Am J Perinatal. 2009;26(7):529-536.

(16.) Stringer EM, Vladutiu CJ, Manuck T, et al. 17-Hydroxyprogesterone caproate (170HP-C) coverage among eligible women delivering at 2 North Carolina hospitals in 2012 and 2013: A retrospective cohort study. Am J Obstet Gynecol. 2016.

(17.) Yee LM, Liu LY, Sakowicz A, Bolden JR, Miller ES. Racial and ethnic disparities in use of 17-alpha hydroxyprogesterone caproate for prevention of preterm birth. Am J Obstet Gynecol. 2016;214(3):374 e371-376.

(18.) Manuck TA, Esplin MS, Biggio J, et al. Predictors of response to 17-alpha hydroxyprogesterone caproate for prevention of recurrent spontaneous preterm birth. Am J Obstet Gynecol. 2016;214(3):376 e371-378.

(19.) Klebanoff MA. 17 Alpha-hydroxyprogesterone caproate for preterm prevention: issues in subgroup analysis. Am J Obstet Gynecol. 2016;214(3):306-307.

(20.) Phibbs CS, Schmitt SK. Estimates of the cost and length of stay changes that can be attributed to one-week increases in gestational age for premature infants. Early Hum Dev. 2006;82(2):85-95.

(21.) Caritis SN, Feghali MN, Grobman WA, Rouse DJ, Eunice Kennedy Shriver National Institute of Child H, Human Development Maternal-Fetal Medicine Units N. What we have learned about the role of 17-alpha-hydroxyprogesterone caproate in the prevention of preterm birth. Semin Perinatol. 2016.

(22.) Hassan SS, Romero R, Vidyadhari D, et al. Vaginal progesterone reduces the rate of preterm birth in women with a sonographic short cervix: a multicenter, randomized, double-blind, placebo-controlled trial. Ultrasound Obstet Gynecol. 2011;38(1):18-31.

(23.) da Fonseca EB, Bittar RE, Carvalho MH, Zugaib M. Prophylactic administration of progesterone by vaginal suppository to reduce the incidence of spontaneous preterm birth in women at increased risk: a randomized placebo-controlled double-blind study. Am J Obstet Gynecol. 2003;188(2):419-424.

(24.) Pizzi LT, Seligman NS, Baxter JK, Jutkowitz E, Berghella V. Cost and cost effectiveness of vaginal progesterone gel in reducing preterm birth: an economic analysis of the PREGNANT trial. Pharmacoeconomics. 2014;32(5):467-478.

(25.) Werner EF, Han CS, Pettker CM, et al. Universal cervical-length screening to prevent preterm birth: a cost-effectiveness analysis. Ultrasound Obstet Gynecol. 2011;38(1):32-37.

(26.) Werner EF, Hamel MS, Orzechowski K, Berghella V,Thung SF. Cost-effectiveness of transvaginal ultrasound cervical length screening in singletons without a prior preterm birth: an update. Am J Obstet Gynecol. 2015;213(4):554 e551-556.

(27.) Cahill AG, Odibo AO, Caughey AB, et al. Universal cervical length screening and treatment with vaginal progesterone to prevent preterm birth: a decision and economic analysis. Am J Obstet Gynecol. 2010;202(6):548 e541-548.

(28.) Jain S, Kilgore M, Edwards RK, Owen J. Revisiting the cost-effectiveness of universal cervical length screening: importance of progesterone efficacy. Am J Obstet Gynecol. 2016.

(29.) Martin JA, Hamilton BE, Osterman MJ, Curtin SC, Matthews TJ. Births: final data for 2012. Natl Vital Stat Rep. 2013;62(9):1-68.

(30.) Chang HH, Larson J, Blencowe H, et al. Preventing preterm births: analysis of trends and potential reductions with interventions in 39 countries with very high human development index. Lancet. 2013;381 (9862):223-234.

Tracy A. Manuck, MD, MSCI, has nothing to disclose

Tracy A. Manuck, MD, MSCI

Assistant Professor, University of North Carolina Department of Obstetrics and Gynecology

Division of Maternal Fetal Medicine

Medical Director, UNC Prematurity Prevention Program

University of North Carolina-Chapel Hill

Chapel Hill, NC
TABLE 1 Potential financial impact of various PTB intervention
strategies, assuming a cost of $59,544 per PTB (12)

Group                    Effect or Treatment

Teen mothers (15-19 y)   Reduction from 10.2% to 6.9%
                         (2006 to 2013) (29)

Smokers                  Smoking cessation during pregnancy

Singletons with          17-alpha hydroxyprogesterone caproate
history of prior PTB

Asymptomatic             Transvaginal ultrasound, perform
singletons with prior    ultrasound-indicated cerclage if cervical
PTB                      length >25 mm before 24 weeks

Asymptomatic             Transvaginal ultrasound cervical length
singletons without       screening, treatment with vaginal
prior PTB                progesterone if cervical length <20 mm
                         before 25 weeks

                         Estimated Impact on       Estimated Financial
Group                    Prematurity               Impact

Teen mothers (15-19 y)   28,100 fewer PTB/year     $1.673 billion

Smokers                  9000 prevented every      $536 million
                         year (30)

Singletons with          10,000 prevented every    $595 million
history of prior PTB     year

Asymptomatic             23,000 prevented every    $1.37 billion
singletons with prior    year

Asymptomatic             9500 prevented every      $565 million
singletons without       year
prior PTB

Abbreviation: PTB, preterm birth.

Reprinted from Am JObstet Gynecol, 213(2), Schoen CN,Tabbhh S, lams
JD, Caughey AB, Berghella V, Why the United States preterm birth rate
is declining, 175-280, 2015, with permission from Elsevier
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Author:Manuck, Tracy A.
Publication:OBG Management
Date:Sep 1, 2016
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