The Costs of Preterm Birth Fact Sheet

View Costs of Preterm Birth Fact Sheet (PDF, 103 KB) »

Everyone is affected by preterm birth in some way - families, businesses, schools, health professionals and the nation as a whole. The emotional costs for families can be devastating and life changing. The financial costs affect us all.

Employers and other private health plans are responsible for half of the total hospital costs for preterm birth. The federal/state Medicaid program (funded by all taxpayers) also bears a large share of the cost. Preterm birth accounts for almost half of all hospital charges for infants. The costs of preterm birth often do not end when babies leave the hospital. About 25 percent of the earliest and smallest babies who "graduate" from the neonatal intensive care unit (NICU) live with long-term health problems, including cerebral palsy, blindness and other chronic conditions. Nationally, the Institute of Medicine has calculated that preterm birth accounts for at least $26 billion of annual costs.

Prematurity hospital costs in Kentucky  

  • Total NICU charges related to preterm birth in Kentucky in 2005 were $204 million (Kentucky Hospital Discharge Database, 2005). 
  • Late preterm births (34-36 weeks) are extremely costly for Kentucky. Kentucky Medicaid paid millions of dollars for care of preterm infants, but the costs were more than four times as much for the group of babies born at 35-36 weeks (late preterm) and for the group of babies born at less than 26 weeks gestation ("micropreemies").

Impact on business and community

  • 11 percent of newborns covered by employer health plans in the United States are born prematurely. 
  • Direct health care costs to employers for a premature baby average $41,610, which is 15 times higher than the $2,830 for a healthy, full-term infant.
  • Direct health care costs to employers for a premature baby average $41,610, which is 15 times higher than the $2,830 for a healthy, full-term infant. 
  • On average, premature babies spend 14.5 days longer in the hospital during the 12 months following birth than full-term babies.
  • Mothers of premature babies spend 10.2 days more on short-term disability over six months following delivery than mothers of full-term babies. Annually, this additional cost to employers in lost productivity averages $2,766. 
  • A study of educational costs in Florida for preterm infants when they attended kindergarten found that if only 9 percent of babies born weighing less than 3½ pounds could have made it to 5½ pounds, the savings would have been more than $1 million in kindergarten costs. 
  • A California study reviewed discharge records of single newborns for one year and concluded that $49,906,000 could have been saved if deliveries between 34 and 37 weeks that were not medically necessary could have been avoided. 
  • A Massachusetts study of costs for early intervention services determined costs per child for babies born at 24 to 31 weeks were seven times the cost of services for full-term infants; even in babies born 32 to 36 weeks, the cost per child was twice as high as that for full-term infants. The costs to the early intervention system were twice as high for the group of late preterm as they were for the extremely premature infants.

The emotional toll  

  • Many preterm infants face life-threatening complications. This can be in the NICU or even after the baby goes home. 
  • Day-to-day life is completely disrupted for many families of premature infants. Parents spend hours providing special care for their premature infant and may need extra time away from their jobs. Families face financial stress as they struggle to pay the high hospital costs as well as travel and housing and time off work. 
  • Even long after the NICU stay, premature babies often require more medical care and experience more frequent behavior problems, as well as more difficulties in school. 
  • Dealing with a premature baby often creates stress within families and puts a strain on marriages.

Healthy Babies Are Worth the Wait® is a multifaceted partnership of the March of Dimes, the Johnson & Johnson Pediatric Institute and the Kentucky Department for Public Health. The primary goal of the initiative is a 15 percent reduction in the rate of "preventable" single preterm births - particularly babies born late preterm (four to six weeks early) - in three targeted intervention sites in Kentucky: King's Daughters Medical Center in Ashland, Trover Health System Regional Medical Center of Hopkins County and the University of Kentucky Albert B. Chandler Hospital in Lexington. Health care teams at each site provide mothers-to-be with an integrated approach of education, counseling and clinical care. 

For more information, call 1-800-333-8874 or visit our website  or the following sites: 


Preterm birth - Associated costs of early intervention services: An analysis by gestational age. Pediatrics , vol. 119, pp. 866-874, 2007.

Maternal and infant factors associated with excess kindergarten costs. Pediatrics , vol. 114, no. 3, pp. 720-728, 2004.

The cost of prematurity: quantification by gestational age. Obstetrics & Gynecology , vol. 102, pp.488-492, 2003.

Preterm birth: Causes, consequences, and prevention. Institute of Medicine Committee on Understanding Premature Birth and Assuring Healthy Outcomes, Board on Health Sciences Policy. Washington, DC, The National Academies Press, 2006.

Page last updated: 8/10/2015 4:15:21 PM