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The high rates of mortality and morbidity arising from preterm birth and low birthweight impose an immense burden on the health, education and social services and on families. This was evaluated in several economic studies published in the 1970s and early 1980s, but an ability to intervene effectively to increase survival has transformed neonatal care over the past two decades. In addition, the relative prices of resource inputs are vastly different. This paper surveys the scientific literature on the economic consequences of preterm birth and low birthweight, including: (1) studies, which estimate the economic costs of the conditions and (2) economic evaluations of primary and secondary prevention and treatment strategies. This paper summarises the scope and scientific quality of the published evidence, identifies gaps in our knowledge and considers the future research agenda in this area.