Context. Although the increasing effectiveness of neonatal programs for extremely low birth weight (ELBW, birth weight <1000 g) infants has been established from cohort studies, there is a paucity of data on the relationship between the costs and the consequences of neonatal intensive care.

Objective. To determine the changes in the efficiency of neonatal intensive care for ELBW infants in Victoria, Australia over 2 decades.

Design. Economic evaluation (cost-effectiveness and cost-utility analyses) in a population-based cohort study of consecutive ELBW infants born during 4 distinct eras (1979–1980, 1985–1987, 1991–1992, and 1997) followed to at least 2 years of age.

Setting. The state of Victoria.

Patients. All ELBW live births of birth weight 500 to 999 g in the state in the calendar years indicated (1979–1980: n = 351; 1985–1987: n = 560; 1991–1992: n = 429; 1997: n = 233).

Main Outcome Measures. Costs were assessed primarily by the consumption of hospital resources. The consequences included survival and quality-adjusted survival rates at 2 years of age.

Results. The cost-effectiveness ratios (expressed in Australian dollars for 1997) were similar between successive eras at $5270, $3130, and $4050 per life-year gained, respectively. The cost-utility ratios were similar between successive eras at $5270, $3690, and $5850 per quality-adjusted life-year gained, respectively, and were similar to the cost-effectiveness ratios. The cost-effectiveness and cost-utility ratios were generally higher in lower birth-weight subgroups, but there were consistent gains in efficiency over time in infants of lower birth weight.

Conclusions. As there have been large increases in effectiveness from the late 1970s to the late 1990s, the efficiency of neonatal intensive care for ELBW infants in Victoria has remained relatively stable.

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