Preemie Babies = Profits for Hospitals

…infants born at 37 weeks are nearly 23 times more likely to suffer severe respiratory distress than those born between 39 and 41 weeks.

Yes, inducing even at 37 weeks, what most OB's consider "full term", can have very real risks.  So, why are inductions on a steep rise in this country?

According to some experts

  1. Obstetricians deliver but don’t care for newborns. They move quickly from birth to birth, and lack a complete understanding of the complications associated with early deliveries.
  2. Natural deliveries are difficult to anticipate. Nature can be fickle and tends to ignore the schedules of busy physicians. Patients may simply agree because they see little harm in early deliveries.
As I recently reported, there may be one more incentive at play.  More money.  NICU's and pre term births are big money at hospitals.  No one is accusing hospital's and staff of seeing dollar signs when they schedule inductions and putting money before health, but in the end, until recently, I'm sure seeing the extra revenue wasn't something that the hospital business heads were sad about.

The average cost of caring for a premature baby is $41,610 versus just $2,830 for a full term baby. A clear line can be drawn between more early term births and more days spent (and dollars generated) in the NICU. Increasing the numbers of preterm births creates a perceived need for additional NICU beds, thereby increasing the need to fill those beds. A self perpetuating cycle quickly emerges. 

One hospital system has brought their induction rates down to 2%.  2%!!!!  That is unheard of.  How did they do it?  And considering they were theoretically losing money with this move, WHY did they do it?

Such a cycle can be broken, as illustrated by Intermountain Healthcare. This Utah and Idaho-based health system reported a 30% rate of early induced labor in 2001 before introducing a protocol that explicitly urged doctors to avoid performing early inductions unless medically necessary. At first, some obstetricians didn’t see a problem. Convincing them required bridging the‚ “information gap,” between what doctors thought they knew and the evidence-based reality. 

By 2004, Intermountain’s rate of early elective deliveries had plummeted to 5%. They have since brought this rate even lower to 2%.

Maybe it’s time to start thinking about babies first and changing the way we pay for births. Simply put, as hospitals reduce their early elective deliveries, they’ll see reduced NICU profits. Intermountain is a capitated health system, so there is little incentive to provide unnecessary care. TEarly elective deliveries involve more care at a very great cost – a baby’s health.

How?  They did something simple, they urged their doctors to stop and educated them as to the harm they were inflicting.
Why?  They  weren't getting more money for more NICU babies, and they cared about having healthy outcomes, rather than profitable ones.

IHC is a leader in this care, and considering that some hospitals in this country have a 100% induction rate, other hospital's can take a cue from IHC.  Put the moms and babies first, and your bottom line last.

To learn more about pre term labor, please visit


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