Assessing the costs of HMO services: a preterm birth prevention program

The prevention of preterm birth has been widely recognized as a means of improving health outcomes as well as reducing medical care costs. Group Health, Inc. (now HealthPartners), a large HMO in Minneapolis/St. Paul, Minn, developed a comprehensive preterm birth prevention program. The cost savings of the program were estimated through retrospective review of medical records. The impact of the program on birth outcomes was used to project the estimated reduction in expenses. The results suggest a probable savings of $615,000 for the 33 babies born full-term, who might otherwise have been preterm. There is a significant need for improved methods to assure that this kind of cost estimate is valid.