From Birth to Bills: Understanding the Impact of Preterm Births on Financial Well-Being

Bringing a newborn home to start a family is one of the most joyous moments in a young couple’s life, but the truth is more complicated.

One in five postpartum women starts her family with medical debt. Accruing debt early in a newborn’s life can limit doctor visits and impact long-term health. It can also force decisions to forgo nourishing food, safe housing, and enriching activities.

Altogether, medical debt in the United States is estimated to be over $140 billion¹ and affect over 100 million Americans.² Medical debt impacts credit scores and drives 66.5% of bankruptcies.

High-deductible plans are driving debt.

A study found that 55.7% of private-sector workers were enrolled in high-deductible health plans in 2021 — the highest on record and the eighth yearly increase.¹ Enrollment in high-deductible plans with saving options also increased – from 19% of covered workers in 2012 to 29% in 2022.²

The idea behind high-deductible plans was to ensure employees had “skin in the game.” If they had to open their wallets every time they visited a doctor, they would be more selective and less wasteful when using their medical benefits. These deductibles range from $5,000 to $6,000. While these plans reduce monthly premiums, they also increase the risk of crippling medical debt from a major medical event. Even with solid private insurance, high deductibles and out-of-pocket costs can saddle a family with a financial burden.

NICU admissions trigger astronomical costs.

For members on a high-deductible plan, premature births with a NICU admission can deliver an enormous financial blow. The New York Times profiled Stacey Brown, mother of triplets, who was rushed to the hospital for an emergency C-section. The triplets’ care ultimately reached $4 million, leaving Stacey and her husband with thousands of dollars in out-of-pocket costs. Stacey had to leave her job with no paid maternity leave because her pre-K teacher salary could not cover childcare costs.³

Giving birth is expensive – $18,865 on average, including pregnancy, delivery, and postpartum care, according to the Peterson-Kaiser Family Foundation.⁴ For preterm infants (<37 weeks), average medical costs have risen to $76,153.⁵

Financial consequences continue to mount.

Beyond the hospital bill, the cost of morbidities continues to mount. A California study quantified these financial consequences, citing a median cost of $269,974 per patient.⁶

For women with employer-based health insurance, the average amount spent out of pocket for maternity care increased from $3,069 in 2008 to $4,569 in 2015, according to a study published in Health Affairs.⁷

“Most of my patients don’t have $4,500 just waiting around,” Dr. Michelle H. Moniz, an OB/GYN at Von Voigtlander Women’s Hospital at the University of Michigan and the study’s lead author, told the New York Times.⁸

When a parent like Stacey Brown is forced to stop working to care for a preterm infant, she often qualifies for Medicaid. Still, Medicaid coverage is only retroactive for three months, which means the hospital claims might not be covered. The federal Children’s Health Insurance Program (CHIP) provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women.

For employees with high-deductible plans, paying a monthly healthcare premium and then getting hit with thousands of dollars in out-of-pocket costs can feel like having no insurance at all.

Self-insured employers are adding NICU benefits.

For this reason, employers are including a NICU care management benefit in their self-insured plans to help mitigate risks. By helping overcome SDoH challenges, guiding families dealing with complex conditions, and coordinating with clinical teams, NICU care management serves as a true lifeline to families. Additionally, utilization management reduces financial burdens on employees by ensuring infants receive the proper leveling of care and length of stay. Because of this, NICU care management is a must have for self-insured health plans. But how can employers ensure they are maximizing savings?

ProgenyHealth’s NICU Payment Validation & Assurance program helps prevent inaccurate payments and realize maximum value from its NICU Utilization and Case Management services through close auditing of NICU claims costs. ProgenyHealth typically sees that approximately 20% – 30% of all NICU claims submitted are inconsistent with authorized services and/or the coding reflected on the claim is not supported by the conclusions and treatments delivered and documented in the medical record. For this reason, ProgenyHealth reviews 100% of NICU claims.

The false promise of Payment Integrity.

Many plans have a Payment Integrity program (PI) but miss millions in lost savings because PI programs typically target high-dollar claims, but not all NICU is high-dollar.

An infant who spends seven days in the NICU might generate $50,000 in costs and not trigger the PI high-dollar threshold. ProgenyHealth’s NICU Payment Validation & Assurance service can look at all cases and apply its clinical expertise and claims integration to capture mid-tier savings. For example, ProgenyHealth might find $2,000 in savings in a $50,0000 case or as much as $10,000 in savings in a $25,000 case. Capturing $10,000 from 100 cases delivers a million dollars in savings.

ProgenyHealth’s NICU Payment Validation & Assurance (PVA) service is tightly integrated with our NICU Utilization Management program via our Baby Trax® platform. With UM and PVA under one roof, we can target clinical information from the coding process without burdening providers with documentation requests. The program also dovetails easily with existing payment integrity processes, acting as a “second set of eyes” if needed.

Employers and plans are recognizing debt’s impact on productivity.

Research shows employees who manage high debts are less productive at work. A study from Fidelity found that employees with the highest levels of debt have twice the absenteeism and miss an additional week of work compared to employees without such debt. Past-due medical bills were the leading debt-related cause of absenteeism, poor sleep, and reduced productivity. One in eight workers reported struggling with unpaid medical bills.⁹

Health plans are equally motivated to manage the high cost of NICU. “ProgenyHealth has reduced our ALOS, reduced outlier days, and kept our readmission rates low,” a health plan CMO said.

Stacey Brown summed up why this matters. “Yes, your life is always turned upside down when you have a child. But with us, in the snap of a finger and a minute-and-a-half, we essentially doubled the size of our family and cut our income in half.” ¹⁰

To learn more about the consequences of medical debt, and how Comprehensive Care Management combined with Payment Validation & Assurance from ProgenyHealth can help decrease employee stress and improve productivity, click here to speak with a maternity and NICU expert.

1. jamanetwork.com/journals/jama/fullarticle/2782187
2. www.linkedin.com/pulse/us-health-care-system-creates-world-debt-kaiser-health-news
3. www.valuepenguin.com/high-deductible-health-plan-study
4. www.kff.org/report-section/ehbs-2022-section-8-high-deductible-health-plans-with-savings-option/
5. www.nytimes.com/2020/02/11/parenting/nicu-costs.html
6. www.forbes.com/advisor/health-insurance/average-childbirth-cost/
7. www.nature.com/articles/s41372-020-0635-z.epdf
8. ldi.upenn.edu/our-work/research-updates/the-financial-cost-of-complications-from-preterm-birth/
9. www.healthaffairs.org/doi/10.1377/hlthaff.2019.00296
10. www.nytimes.com/2020/02/11/parenting/nicu-costs.html
11. sponsor.fidelity.com/bin-public/06_PSW_Website/documents/What_is_total_well-being_Charticle.pdf
12. www.nytimes.com/2020/02/11/parenting/nicu-costs.html