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Childbirth Costs: Then and Now

When you are having long conversations with elder relatives this holiday season, you may stumble upon discussions related to the cost of things “in their day” compared with prices today. It is easy to look back at years gone by in wonder, amazed at how prices for the same objects have jumped tremendously over the decades. That is perhaps most pronounced in the area of healthcare.

Much discussion has centered on what actually affects the rising cost of healthcare–including the myth of medical malpractice lawsuit influence. Most serious attempts to understand the rising costs are far more nuanced, ignoring the false “hot button” topics related to malpractice and instead focusing on the areas that might actually account for the price differences.

A recent CNN story on the changing costs of childbirth over the years provides a helpful primer on some of those issues.

The Price of Having a Child in 1947
The article centers on a man who stumbled upon a hosptial bill for his own birth in 1947. He was amazed to find that, when everything was taken into account, the total cost was $70. Keep in mind that this bill included using the operating room, the nursing, medication, and other services connected to the delivery. In fact, as was common at the time, his mother required a six-day stay at the hosptial before and after the delivery. Still, despite all of this, the total bill was $70.
Ask any new parents today and they’ll likely explain how much things have changed. A single medication can cost much more than $70.

So what explains the difference? Is it inflation? Not quite. Experts explain that $70 in 1947 equates to about $726 today. And $726 is still far short of the average cost of having a child in a hospital today. According to an industry report, the average hospital bill following a birth is about $11,000. If a C-section is needed then that total rises to about $19,000. These rates refer to uncomplicated births. When a child or mother suffers any form of injury, then the costs can skyrocket, often reaching hundreds of thousands of dollars in the most complex cases. Also, keep in mind that most mother’s leave the hosptial within 48 hours of a birth today–week-long stays are rare.

In short: the cost of childbirth today is heads and shoulders higher than it was decades ago, and inflation only acounts for a fraction of that increased cost.

So what is the real reason for the price difference?

Perhaps the area most at play are improvements in technology. Medical advances in childbirth and care have been staggering. Infants who never would have survived in the past, are saved today. According to a report from the American Congres of Obstetricians and Gynecologists, in 1950 about 30 children in a thousand died shortly after birth. Today that number has been cut to 6.4 per 1,000 births. Medical advances have saved countless lives, but they come at a cost. Technology (and the expertise to wield it effectively) is expensive. Those expenses go a long way to account for the rising cost of childbirth today as compared to fifty, sixty, or seventy years ago.

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