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How To Determine Potential for High Maternity Costs

October 1, 1993
Related Topics: Benefit Design and Communication, Health and Wellness, Featured Article
On average, between 2% and 4% of a work force will experience pregnancy in a year, based on group demographics. Of those, approximately 15% to 17% will be high risk. The March of Dimes states that the national preterm birthrate is between 6% and 8%, costing, on average, $20,000 to $40,000 in medical care.

The following formula uses the example of a large employer to estimate the potential for high-risk pregnancies in its work force and the related costs of these pregnancies. Insert your figures in this four-step formula to determine your company's risk for high maternity costs. This isn't a scientifically based formula; it is meant to be a guide for estimating risks.

Number of employees in the work force (50,000)

  1. (50,000) x 2% = (1,000 pregnancies)
  2. (1,000 pregnancies) x 6% = (60 preterm deliveries)
  3. (60 preterm deliveries) x $20,000 = ($1.2 million in preterm health costs for the infants' hospital care). This figure doesn't include the mothers' care, physician fees or lost productivity, absenteeism and after-care costs.

Studies indicate that work-site prenatal programs that include all the necessary components potentially can decrease these costs by 20% to 50%. For example, among the 20,000 participants in Baby Benefits, the prenatal work-site program developed by Richmond, Virginia-based Health Management Corp., the preterm birthrate is less than 2%, compared with the average of 6% to 8%. The potential savings in the previous example using a prenatal program is $240,000 to $600,000.

Personnel Journal, October 1993, Vol. 72, No.10, p. 45.

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