Costs of newborn care in California: a population-based study.

OBJECTIVE: We sought to describe the current costs of newborn care by using population-based data, which includes linked vital statistics and hospital records for both mothers and infants. These data allow costs to be reported by episode of care (birth), instead of by hospitalization.
METHODS: Data for this study were obtained from the linked 2000 California birth cohort data. These data (n = 518,704), provided by the California Office of Statewide Health Planning and Development (OSHPD), contain infant vital statistics data (birth and death certificate data) linked to infant and maternal hospital discharge summaries. In addition to the infant and maternal hospital discharge summaries associated with delivery, these data include discharge summaries for all infant hospital-to-hospital transfers and maternal prenatal hospitalizations. The linkage algorithm that is used by OSHPD in creating the linked cohort data file is highly accurate. More than 99% of the maternal and infant discharge abstracts were linked successfully with the birth certificates. These data were also linked successfully with the infant discharge abstracts from the receiving hospital for 99% of the infants who were transferred to another hospital. The hospital discharge records were the source of the hospital charges and length-of-stay information summarized in this study. Hospital costs were estimated by adjusting charges by hospital-specific ratios of costs to charges obtained from the OSHPD Hospital Financial Reporting data. Costs, lengths of stay, and mortality were summarized by birth weight groups, gestational age, cost categories, and types of admissions.
RESULTS: Low birth weight (LBW) and very low birth weight (VLBW) infants had significantly longer hospital stays and accounted for a significantly higher proportion of total hospital costs. The average hospital stay for LBW infants ranged from 6.2 to 68.1 days, whereas the average hospital stay for infants who weighed >2500 g at birth was 2.3 days. Overall, VLBW infants accounted for 0.9% of cases but 35.7% of costs, whereas LBW infants accounted for 5.9% of cases but 56.6% of total hospital costs. Although total maternal and infant costs were similar (approximately 1.6 billion dollars), the distribution of maternal costs was much less skewed. For infants, 5% of infants accounted for 76% of total infant hospital costs. Conversely, the most expensive 3% of deliveries accounted for only 17% of total maternal costs.
CONCLUSIONS: The very smallest infants make up a hugely disproportionate share of costs; more than half of all neonatal costs are incurred by LBW or premature infants. Maternal costs are similar in magnitude to newborn costs, but they are much less skewed than for infants. Preventing premature deliveries could yield very large cost savings, in addition to saving lives.