Economic uncertainties compel employers to rethink their strategies around employee benefits. As companies seek to de-risk in anticipation of potential downturns, optimizing healthcare expenses becomes a priority. The shift away from lavish perks towards more cost-effective healthcare solutions is not just a trend but a necessity for sustainable business operations.
Employer Focus on Healthcare Cost Reduction
With the potential for economic downturns, employers are increasingly focusing on cost-reduction strategies. According to a survey by the National Business Group on Health, 70% of large employers cited managing healthcare costs as a top priority in 2023, compared to 54% in 2020. This emphasis on cost management highlights the need for efficient healthcare solutions that balance cost control with employee well-being.
The High Cost of Maternity Care
Among the myriad expenses that employers face, maternity care stands out as one of the most significant, particularly for self-funded plans. The cost is driven by multiple factors:
Multiple Births: More common in births via in-vitro fertilization (IVF), multiple births significantly increase healthcare costs. Multiple births, such as twins or triplets, are associated with higher medical costs compared to singleton pregnancies. These costs arise from a higher likelihood of preterm births, low birth weights, and increased medical interventions. According to the American Journal of Obstetrics and Gynecology, the average medical cost for a twin pregnancy is approximately 5 times higher than that for a singleton pregnancy. Triplet pregnancies can cost nearly 20 times more.
Key statistics, the average cost per pregnancy in the US:
- Singleton pregnancy: ~$21,000.
- Twin pregnancy: ~$105,000.
- Triplet pregnancy can exceed $400,000.
These figures highlight multiple births' significant financial burden on healthcare systems and insurance plans. According to the CDC, the rate of multiple births has risen by 76% over the past three decades, largely due to assisted reproductive technologies.
High-Risk Pregnancies: Factors such as becoming parents later in life, lack of adequate access to maternity care, and higher risk among BIPOC (Black, Indigenous, and People of Color) populations contribute to the prevalence of high-risk pregnancies. The rate of preterm birth in the United States is highest for Black infants (14.6%). The National Vital Statistics Reports indicate that high-risk pregnancies account for nearly 18% of all births, leading to higher medical costs and extended hospital stays.
Medical Stop Loss Premiums: Multiple births often result in preterm deliveries, low birth weight, and extended neonatal intensive care unit (NICU) stays. According to the Journal of Pediatrics study, the median cost of a preterm birth of infants born without major congenital anomalies is $269,974 per patient. These higher costs can quickly exceed stop-loss thresholds, leading to increased premiums for employers.
How Stork Club Helps Employers Drive Cost Reduction
At Stork Club, we have implemented a managed care model (vs. reimbursement model) that significantly reduces the incidence of multiple births and controls the costs associated with high-risk pregnancies. Our recent outcomes study, validated by a leading actuary firm, highlights the effectiveness of our approach:
Reducing Multiple Births
Stork Club's care model delivers superior clinical outcomes compared to the national average. Specifically, the program results in more births with fewer IVF cycles and healthier births and babies born via IVF. Our model prioritizes single embryo transfers during IVF, reducing the likelihood of multiple births. This approach not only decreases associated healthcare costs but also improves health outcomes for both mothers and babies. Research supports that single embryo transfer can significantly reduce the risk of complications associated with multiple births.
Stork Club's approach has led to an 83% reduction in the multiple births rate, now at an exceedingly low 0.5% compared to the national rate of 2.9%. This demonstrates our dedication to the health of mothers and babies by minimizing the inherent risks of multiple pregnancies.
Personalized Care Plans
By offering personalized care plans, we address the specific needs of our members, particularly those at higher risk of complications. This approach ensures that each member receives the most appropriate care to advocate for the mother and minimize unnecessary interventions and costs. For example, a personalized care plan for a Black mother is tailored specifically to address their pre-existing conditions and coach them on what care might be most impactful based on recent research.
Access to Managed Fertility and Maternity Care in Rural Areas
We provide access to managed reproductive technologies and comprehensive maternity care nationally and globally. In the US, Stork Club helps close gaps in rural care by offering Stork Club's In-Person Birth Doula Care. This care is designed to include both virtual and in-person services with a locally-based, vetted, certified birth doula. Research shows onsite birth doulas can significantly improve clinical maternity outcomes. The Stork Club's In-Person Birth Doula Care drives 1.75X ROI even if all mothers utilize the care.
In light of potential economic downturns, employers are re-evaluating their healthcare benefits to optimize costs without compromising quality. By adopting strategic care models for maternity care, they can effectively reduce one of their highest expenses while ensuring employees have access to modern, high-quality family-building services. Stork Club is dedicated to partnering with employers in this transformation, offering solutions that benefit both — employers and employees. We look forward to collaborating with new partners to drive better outcomes and achieve cost savings together.
