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The Dose - JK Wall

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

Babies, business and the bottom line

March 13, 2015

For years, employers have focused on preventing huge health bills that can result from their older workers: bypass surgery due to controlled heart disease or needing a hip replacement due to obesity.

But now Leonard Hoops, the CEO of Visit Indy, Indianapolis’ convention and tourism recruiting agency, is trying to get employers to focus on the costs of the youngest members of their health plans: premature babies.

Hoops is the corporate chair for a semi-annual fundraiser for the Indiana chapter of the New York-based March of Dimes Foundation, which is trying to raise businesses’ awareness of the issue of premature births in Indiana. The March of Dimes calls its campaign “Babies, Business and the Bottom Line.”

Hoops can relate to the impact that comes from birth complications. His son Cannon arrived on time 10 years ago, but suffered a lack of oxygen during birth, which caused him to develop cerebral palsy. Hoops and his wife, Dorene, spent 23 nights with Cannon in the neonatal intensive care unit before he was able to come home.

"There were a lot of preterm babies in that unit," Hoops said. "A lot of kids with special needs are the result of kids with premature birth."

The March of Dimes figures the costs of premature births is most likely to hit home with employers—from which the not-for-profit wants to raise $100,000 this year. The March of Dimes will host its fundraiser walk, called the March of Babies, on May 9 at the White River State Park.

The average amount employer health plans pay for an uncomplicated birth is $4,389, according to 2013 data prepared for the March of Dimes by Truven Analytics, which manages a database of claims from private insurance companies. That figure does not count patient contributions to the bills.

But the births of premature babies and low-birthweight babies (the two often go hand in hand) cost employers $54,149 on average. That’s 12 times higher than the uncomplicated average.

One of every 11 babies in Indiana is born premature. And with employers covering 47 percent of all births, according to 2010 data from the U.S. Centers for Disease Control and Prevention, employers stand a decent chance of having one of those premature births happen among their workforce.

Hoops is asking employers to check their insurance policies to see if they offer coverage for the types of things that can prevent premature births: smoking-cessation programs, help with drug or alcohol addictions, prenatal vitamins in the early months, progesterone shots in the second half of pregnancy and medical help if preterm labor starts.

"The ones I did talk to, there was a lot of, 'Aha! I wasn’t aware of that,'" Hoops said. "If you’re a smaller business, that thing can have a huge impact."

The issue has also caught the attention of the biggest funder of births in Indiana—the Indiana Medicaid program.

The Medicaid program spends nearly $128 million per year on newborns with health complications, according to data released last year by Milliman Inc., the actuary for the Indiana Medicaid program. That’s $52,574 per baby—compared with just over $2,019 per year for all other Hoosiers less than one year old.

Partly in response to the those costs, Gov. Mike Pence and the Indiana State Department of Health have been working to reduce infant mortality—one of the leading causes of which is premature birth.

The rate of premature births has come down 7 percent nationwide since 2006—and has fallen 17 percent in Indiana during that same period.

But after a huge run-up in premature births from the early 1980s until the mid-2000s, the rate is still higher than it was historically.

“With the rise in cost and incidences of infant mortality in recent years, it's more relevant to business leaders than ever before,” Tracey Drzich, who works out of Indianapolis as the executive director of the central division of the March of Dimes.
 

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