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Cost Savings Associated With the Use of 17 Alpha-Hydroxyprogesterone Caproate
Charles J. Carlini, MD, JD; and Karmen Anderson, BS

Cost Savings Associated With the Use of 17 Alpha-Hydroxyprogesterone Caproate

Charles J. Carlini, MD, JD; and Karmen Anderson, BS
This study quantifies cost saving potential for a health plan when 17 alpha-hydroxyprogesterone caproate prophylaxis is appropriately used for prevention of preterm births.
Objectives: To estimate the cost savings available to a health insurance company with appropriate use of 17 alpha-hydroxyprogesterone caproate (17P) for prevention of preterm birth (PTB) in the insured population over 1 fiscal year.

Study Design: Data from a large US healthcare insurer were examined to determine the ratio of those currently pregnant to the total number of insured lives. The data points were further refined by estimating the number of insured singleton pregnancies with a spontaneous PTB according to incidence data from the Centers for Disease Control and Prevention. This segment of the pregnant population is eligible for treatment with 17P.

Results: According to a previous published study denoting 17P’s efficacy for reducing the incidence of PTB in clinically eligible patients (women with a history of at least 1 prior singleton pregnancy who experienced at least 1 spontaneous PTB and are now pregnant with a singleton pregnancy), administration of 17P would have resulted in neonatal intensive care unit (NICU) savings by reducing the incidence of admissions to the NICU and, in those admitted to the NICU, the length of stay in the NICU.

Conclusions: Timely initiation of 17P prophylaxis in a clinically eligible patient population results in considerable healthcare savings, which could result in decreased premiums for healthcare consumers. Short-term savings are achieved by avoidance of admission to the NICU (and a decreased length of stay in the NICU) in addition to cost savings associated with the long-term healthcare sequelae experienced by infants born prematurely.

Am J Pharm Benefits. 2013;5(3):e80-e84
  • A decrease in the number of preterm births (PTBs) leading to admissions to the neonatal intensive care unit and the associated expense.
  • A decrease in the number of PTBs that would result in expenditures associated with long-term care.
  • The treatment of all eligible pregnancies by 17 alpha-hydroxyprogesterone caproate can decrease the healthcare costs associated with PTB and therefore result in a reduction of premiums charged to members of said health plan.
Preterm birth (PTB), defined as a delivery between 20 and 36.6 weeks of gestation (spontaneous or otherwise), is the primary cause of neonatal mortality and morbidity in the United States and elsewhere. In the developed world, PTB constitutes 12.7% of all births,1 and this percentage has risen from 9% over the past 2 decades with one-third of these deliveries occurring before 32 weeks of gestation. The incidence of PTB is noted to be higher in African American and Hispanic populations.

Preterm birth may be due to obstetrically indicated delivery, which does not qualify as a spontaneous PTB. However, PTB secondary to spontaneous preterm labor (75%-80% of PTBs) and/or spontaneous preterm premature rupture of the membranes is defi ned as spontaneous PTB.2 In this study, we examine the use of 17 alpha-hydroxyprogesterone caproate (17P) for prevention of spontaneous PTB.

Neonatal complications that arise from PTB include intraventricular hemorrhage, necrotizing enterocolitis, anemia, jaundice, respiratory distress syndrome, and bronchopulmonary dysplasia, in addition to other affl ictions that persist throughout life such as cognitive disorders and audiovisual defi ciencies. Some estimates of the annual cost associated with PTB exceed $26 billion.3

Risk factors for PTB include, but are not confi ned to, a history of previous PTB, the gestational age of the previous PTB (the earlier the age, the greater the likelihood of another PTB), the presence of a multiple gestation, the presence of a shortened cervix, pregnancy at the extremes of the reproductive years (usually defined as younger than 18 or older than 40 years), and tobacco and illicit drug use in addition to uterine malformation. For example, 45% of triplet births are delivered before 32 weeks of gestation, with an associated mortality of 59 per 1000. For full-term deliveries, the associated mortality rate is 4 per 1000.4 Overall, the risk of recurrence of spontaneous PTB ranges from 15% to 80%, depending upon the number of prior PTBs and how early in gestation the PTB occurred.5

Hence, any methodology that can be used to decrease the incidence of spontaneous PTB should be in the armamentarium of providers responsible for prenatal care. Use of this methodology according to protocol established by the scientific community and associated organizations such as The American College of Obstetricians and Gynecologists should decrease the incidence of PTB and its associated short-term and long-term consequences.

In 2003, Meis and colleagues published an article in the New England Journal of Medicine that elucidated a relationship between prevention of spontaneous PTB and the administration of 17P.6 Specifically, they demonstrated that use of 17P therapy for mothers who had experienced at least 1 spontaneous PTB reduced subsequent spontaneous PTBs approximately 18.6% (a decline in incidence from 54.9% to 36.3%). In this study, 17P was given as a 250-mg injection starting at the 16th to the 20th week of pregnancy and ending after the 36th week of pregnancy, or before then if delivery occurs, for a maximum of 21 injections.

Since that original article, other studies have verified the efficacy of 17P in reducing the incidence of PTB, including a large meta-analysis by Sanchez-Ramos and colleagues published in 2005.7 However, use of 17P therapy for women pregnant with multiple fetuses was not proved effective at preventing spontaneous PTBs, according to studies done with twin and triplet gestations. However, no study has been done wherein mothers carrying a multiple gestation also had a history of a previous spontaneous PTB of a singleton gestation.


We divided a large US healthcare company into its different lines of business in order to ascertain the number of totally insured lives and determined the number of members in this group who were pregnant. Some of these pregnant members were then placed into a smaller subset of pregnant patients defined by the presence of a least 1 previous spontaneous PTB. Hence, the pregnant patients in this subset were the members of interest and were eligible for treatment with 17P. The following mathematical derivation illustrates the cost savings associated with the administration of 17P to this subset of patients. It can be used by any healthcare insurer for their whole line of business or any part of their book of business to calculate the potential cost savings if their eligible pregnant population were treated with 17P. The calculation is specifically based upon the findings of the previously cited study by Meis and colleagues.6

Author’s Note. This purpose of this study is not to promote 17P as the solution for prevention of preterm birth, as it is effective in some patients but not others. What this study does attempt to demonstrate is the cost savings associated with the use of 17P if (and only if) it is efficacious to the same degree as shown in the 2003 study by Meis and colleagues.6 Our overriding task was creation of a formula that would determine cost savings if the parameters it contains are populated by the latest information. These parameters are well defined, but their actual values may change as more information is published from studies currently in progress. Users of this formula must choose the best values available at the time of calculation to achieve the best estimate of cost savings. It is our intention to provide any interested readers with a formula that is applicable to their current situation so that they can make cost estimates germane to their enterprise, and nothing more.

Derivation of a Formula to Determine Cost Savings Associated With Use of 17P

To begin, let D represent the total number of deliveries that occur in 1 year and have benefit coverage by an insurance company for all needs associated with pregnancy, labor, delivery, and postpartum care in addition to all necessities for the newborn, including charges associated with admissions to, and stays in, the neonatal intensive care unit (NICU) or newborn nursery (NBN).

If the insurer is composed of different divisions, say d1 through d5 such that D is the summation of these separate 5 lines of business, then

D = 5 Σ di / i = 1

Thus, any needed calculation can be applied to the sum total of all lines of business by using D, or a specific line of business by only using di.

Next, let the following quantities be defined as follows:

α = the fraction of mothers present who have never delivered a fetus before (they may be primigravidas or have had an early miscarriage or therapeutic abortion, but no spontaneous PTB).

p = the probability of spontaneously delivering a preterm infant (between 20 weeks gestation and <37 weeks of gestation).

m = the fraction of pregnancies that are multiple gestations.

k = the percent decrease in premature deliveries if 17P is given to the subset of D that have previously spontaneously delivered preterm newborns and are not pregnant with a multiple gestation.

C = the cost of a typical treatment cycle of 17P for 1 pregnancy.

E = the average expense per day for an infant in the NICU.

E' = the average expense per day for an infant in the NBN.

F = daily neonatology professional fees associated with the NICU.

n = the number of days spent in the NICU.

nˇ = the average number of days, per infant, that a population of preterm infants spends in the NICU.

TI = total number of insured members in the health plan or division thereof.

Therefore, the number of pregnancies that have excluded those categories defined by and m above is given as

D  [1 – (α + m)]

Hence, this number of pregnancies includes a population that contains some PTBs according to p, previously defined as the probability of delivering a preterm infant. This implies that the number of pregnancies in this given population that have a history of a PTB is

p x D x [1 – (α + m)]

Now, if this number of pregnancies are treated with 17P in an appropriate fashion, the number of PTBs that are prevented, noting k to be as defined previously, is

k x p x D x [1 – (α + m)]

Then the cost per day that is saved by preventing these preterm deliveries with subsequent treatment in the NICU is, defining E and F as above, is

(E + F ) x k x p x D x [1 – (α + m)]

However, note that to achieve this yearly cost savings, all those who have experienced a PTB must be treated with 17P a priori, as one does not know which pregnancies will respond to treatment with 17P until treatment has been rendered and delivery has occurred. So the cost of treating all patients who have had a PTB with 17P is given by

C x p x D x [1 – (α + m)]

where C is defined above.

Also, note that those newborns who do not need the services of the NICU will incur expenses associated with a stay in the NBN. The total cost is calculated by multiplying the number of newborns delivered after 37 weeks through the action of 17P by the cost per day in the NBN. The typical length of stay for these term newborns is 2 days and is mandated by federal guidelines. Therefore, the expense associated with this subpopulation is given by

2 x E' x k x p x D x [1 – (α + m)]

Thus, if is defined as above, then the cost savings over a 1-year length of time is the difference of the cost of the PTBs that were prevented minus the cost of treating the total subset of patients at risk for a PTB and the costs of the NBN for those pregnancies that reached term. This cost savings is then defined as

nˇ x (E + F ) x k x p x D x [1 – (α + m)] – C x p x D x [1 – (α + m)] – 2 x E ' x k x p x D x [1 – (α + m)]


Total yearly savings = p x D x [1 – (α + m)] x {k x [nˇ x (E + F) – E'] – C}

In order to calculate the per member per month (pmpm) savings over 1 year, simply divide the above calculation by 1/(12 x TI ) where TI is as originally defined as total number of insured members.


pmpm = p x D x [1/(12 x TI)] x [1 – (α + m)] x {k x [nˇ x (E + F) – 2E'] – C)}


pmpm = total yearly savings /(12 x TI )


Referring to the 2 formulae calculated above for total yearly savings and pmpm, please refer to the following data based upon the total number of insured lives in a large healthcare company and the percentage of these lives that are pregnant as standardized to 1 year of activity. The previously defined variables have the following values taken from the literature as indicated and are expenses incurred by a healthcare company paying for services owed to its insured as defined by the benefits depicted in the insurance contract and are as follows:

P = 0.0978

k = 0.1869

m = 0.02310

α = 0.027410

C = $2312

D = 200,000 deliveries

TI = 20,000,000 covered lives

E = $2404

E' = $1000

F = $440

Copyright AJMC 2006-2018 Clinical Care Targeted Communications Group, LLC. All Rights Reserved.
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