NCPA - National Center for Policy Analysis


June 24, 2008

The cost of care for premature babies is sky-high -- some 15 times the expense of full-term infants and rising, says Spencer E. Ante of Business Week.  

Premature babies are a quickly expanding class of patients in the United States, Britain and other advanced nations, says Ante.  And the costs and technical challenges of caring for them are a growing source of controversy. 


  • Nearly 13 percent of all babies in the United States are born premature, a 20 percent increase since 1990.
  • In 1980, a typical 28-week-old premature baby had a 20 percent rate of survival; today those infants have a 90 percent survival rate and considerably reduced side effects.
  • A 2006 report by the National Academy of Sciences found that the 550,000 premature babies born each year in the United States run up about $26 billion in annual costs, mostly related to care in NICU; this figure represents about half of all the money hospitals spend on newborns.

Norman J. Waitzman, a professor economics at the University of Utah who worked on the National Academy of Sciences study, says that when you factor in the cost of treating all of the possible lifelong disabilities and the years of lost productivity for the caregivers, the real tab of caring for premature babies may top $50 billion.  

  • An April 2008 report in the New England Journal of Medicine found that "extending intensive care to the most immature infants would entail considerable suffering, resource use and cost in order to benefit only a small proportion of infants."
  • About one-third of premature babies suffer from severe disabilities such as cerebral palsy, chronic lung disease and blindness.

Source: Spencer E. Ante, "Million-Dollar Babies," BusinessWeek, June 23, 2008.

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