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Subject: Companies Working to Cut Costs of Premature Births;Pregnant Workers Helped
Date: Wed, 28 Oct 92 04:28:31 EST
Message-ID: <12.1992Oct28.042831@AmeriCast.com>

Companies Working to Cut Costs of Premature Births;Pregnant Work-
ers Helped With Medical Care<By Sandra Sugawara=Washington Post
Staff Writer=

Like most other companies, Haggar Apparel Co. of Dallas was
alarmed about rising health care costs. When it analyzed its ex-
penses, the firm found what an increasing number of companies are
discovering - premature births were costing the company a bundle.

 Of its 50 most expensive medical claims in 1989, seven were due
to premature births. In 1988, 26 employees gave birth premature-
ly.  Because of the premature births, the firm averaged about
$26,000 in medical expenses  for each baby, compared with the
$2,000 average cost of a full-term birth in Texas.

 Haggar's discovery wasn't unique, according to a recent study by
Cigna Corp., an insurance company based in Hartford, Conn. Cigna
found that for most employers, expenses related to childbirth are
the largest single component of total health care costs, ranging
from 10 percent to 49 percent. And these costs, which often in-
volve expensive hospital stays and high-tech equipment, are grow-
ing.

 For that reason some companies are rethinking their approach to
maternity benefits. To encourage pregnant women to get frequent
checkups, they are assuming more upfront expenses, are banking on
the idea that preventive care will reduce the number of costly
premature births.

 "You feel lucky if the cost of caring for a premature baby is
only $150,000. It's not unusual for one to cost $300,000 these
days - they are doing so much more to keep babies alive today
that they wouldn't have been able to do five years ago," said
Elaine Moore, senior vice president of benefits at  Dallas-based
Haggar.

 Black & Decker Corp., the Towson, Md.-based power tools company,
had two employees in Maryland whose sickly premature babies cost
the company about $1 million in 1990, according to Ray Brusca,
director of benefits.

 Sunbeam-Oster Appliances Co.'s plant in Coushatta, La., found
that  in 1984 and 1985, five premature births cost the company
$1.15 million, more than half the plant's entire medical expenses
for those two years.

 Pregnancy costs are "one of the largest components of our medi-
cal expenses," Gail Turek, director of benefits for PHH Corp.,
said at a recent conference on infant mortality in Annapolis.
PHH, a Hunt Valley, Md., company with more than 4,000 employees,
leases fleets of cars and helps companies relocate employees.

 In addition to the costs of covering their own employees and
their families, employers bear a substantial portion of the costs
of uninsured women because hospitals increase their rates to cov-
er the bills of such patients, analysts say.

 A study sponsored by Cigna estimated that in 1992 U.S. employers
will have to cover more than $4 billion in uncompensated care
costs incurred by pregnant women and their babies. In Maryland,
employers paid about $30 million of those costs in 1991.

 Most employers say that they are focusing first on reducing
premature births at their own companies.

 Experts generally agree that  proper medical care throughout
pregnancy will reduce the chances  that babies will be born small
or early - the major reasons for  large hospital bills.

 Haggar has one of the more aggressive programs to cut the number
of premature births, according to a study by the Southern Region-
al Project on Infant Mortality.

 For instance, Haggar has reducedthe amount employees need to pay
out of their own pockets when they're pregnant. The company
agreed to pay"You feel lucky if the cost of caring for a prema-
ture baby is only $150,000. It's not unusual for one to cost
$300,000 these days... . "<Elaine Moore, vice president>of Haggar
Apparel Co. 100 percent of the cost of medical visits during
pregnancy, as long as the employee or spouse began seeing  the
physician during the first three months of her pregnancy.

 To encourage regular visits with doctors, Haggar arranged to pay
the doctors' bills directly rather than requiring employees to
pay upfront and then receive reimbursement. And it began offering
a series of prenatal health classes designed by the March of
Dimes organization. Employees who attend all the classes  get a
free infant car seat.

 In 1991, the number of premature births at Haggar dropped to
six, and so far this year there have been three premature births.

 A cost analysis by Sunbeam-Oster, which initiated its prenatal
care program in 1986, found that average medical costs per birth
were $27,000 in 1984-85, but by 1990 had dropped to $3,500 per
birth.  From 1986 to 1990, there was only one premature birth.
The program costs the company about $14,000 a year.

 Sunbeam-Oster's program includes free pregnancy testing and bi-
monthly maternity classes for the largely female work force at
its Coushatta plant, where steam irons are made.

 The classes, which are taught by nurses and cover a range of
topics from prenatal care to diet, are conducted during working
hours. All pregnant women are required to attend.

 Black & Decker, which had particular problems with premature
births at two plants in North Carolina, initiated a program simi-
lar to Haggar's in 1991.

 The company eliminated the deductible and co-payment require-
ments of its insurance, and employees pay only $10 for each phy-
sician visit.

 The company has not done a detailed cost analysis, but Brusca
said, "Our managed-care plan is much less expensive than the
traditional plan."<

02:08 10-28C9999-----

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
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