Cost-effectiveness of Care for Very Low Birth Weight Infants

Very low birth weight (VLBW) infants (those with birth weights less than 1500g) account for only 1.2% of births but 46% of infant deaths. Large improvements in neonatal technology in the last two decades have significantly improved survival prospects for infants with low birth weights, but at a high cost. Due largely to a lack of data, the costs of medical care during the period in which infant mortality is measured (the first year of life), as well as the cost-effectiveness of that care for VLBW infants, have not been quantified. Despite this fact, public policies both toward providing insurance coverage for their care, as well as denying payment for their treatment, have either been proposed or implemented on cost-effectiveness grounds. This study concludes that public policies aimed at improving birth outcomes by providing insurance coverage for pregnant women and children, such as the recent Medicaid expansions, can potentially be very cost-effective. Although maternal interventions such as prenatal care are relatively inexpensive, each normal birth that results instead in a VLBW birth saves $59,700 in first year medical expenses. However, cost savings attributable to increased birth weights depend on where in the birth weight distribution the increase occurs as well as the size of the birth weight increase. For infants with birth weights greater than 750g, significant gains can accrue from even a small shift in the birth weight distribution. A shift of 250g at birth saves an average of $12,000 to $16,000 in first year medical costs and a shift of 500g generates $28,000 in savings. However, there is a threshold effect on birth weight. For infants greater than 750g, increases in birth weight may increase medical expenditures. For instance, a shift in birth weight to the 750 to 999g range increases costs by $29,000.