Most rural hospitals no longer deliver babies – Twin Cities

By Anna Claire Vollers, Stateline.org

Nine months after Monroe County Hospital in rural South Alabama closed its labor and delivery department in October 2023, Grove Hill Memorial Hospital in neighboring Clarke County also stopped delivering babies.

Both hospitals are located in an agricultural swath of the state that’s home to most of its poorest counties. Many residents of the region don’t even have a nearby emergency department.

Stacey Gilchrist is a nurse and administrator who’s spent her 40-year career in Thomasville, a small town about 20 minutes north of Grove Hill. Thomasville’s hospital shut down entirely last September over financial difficulties. Thomasville Regional hadn’t had a labor and delivery unit for years, but women in labor still showed up at its ER when they knew they wouldn’t make it to the nearest delivering hospital.

“We had several close calls where people could not make it even to Grove Hill when they were delivering there,” Gilchrist told Stateline shortly after the Thomasville hospital closed. She recalled how Thomasville nurses worked to save the lives of a mother and baby who’d delivered early in their ER, as staff waited for neonatal specialists to arrive by ambulance from a distant delivering hospital.

“It would give you chills to see what all they had to do. They had to get inventive,” she said, but the mother and baby survived.

Now many families must drive more than an hour to reach the nearest birthing hospital.

Nationwide, most rural hospitals no longer offer obstetric services. Since the end of 2020, more than 100 rural hospitals have stopped delivering babies, according to a new report from the Center for Healthcare Quality & Payment Reform, a national policy center focused on solving health care issues through overhauling insurance payments. Fewer than 1,000 rural hospitals nationwide still have labor and delivery services.

Across the nation, two rural labor and delivery departments shut their doors every month on average, said Harold Miller, the center’s president and CEO.

“It’s the perfect storm,” Miller told Stateline. “The number of births are going down, everything is more expensive in rural areas, health insurance plans don’t cover the cost of births, and hospitals don’t have the resources to offset those losses because they’re losing money on other services, too.”

Staffing shortages, low Medicaid reimbursement payments and declining birth rates have contributed to the closures. Some states have responded by changing how Medicaid funds are spent, by allowing the opening of freestanding birth centers, or by encouraging urban-based obstetricians to open satellite clinics in rural areas.

Yet the losses continue. Thirty-six states have lost at least one rural labor and delivery unit since the end of 2020, according to the report. Sixteen have lost three or more. Indiana has lost 12, accounting for a third of its rural hospital labor and delivery units.

In rural counties the loss of hospital-based obstetric care is associated with increases in births in hospital emergency rooms, studies have found. The share of women without adequate prenatal care also increases in rural counties that lose hospital obstetric services.

And researchers have seen an increase in preterm births — when a baby is born three or more weeks early — following rural labor and delivery closures. Babies born too early have higher rates of death and disability.

Births are expensive

The decline in hospital-based maternity care has been decades in the making.

Traditionally, hospitals lose money on obstetrics. It costs more to maintain a labor and delivery department than a hospital gets paid by insurance to deliver a baby. This is especially true for rural hospitals, which see fewer births and therefore less revenue than urban areas.

“It is expensive and complicated for any hospital to have labor and delivery because it’s a 24/7 service,” said Miller.

A labor and delivery unit must always have certain staff available or on call, including a physician who can perform cesarean sections, nurses with obstetric training, and an anesthetist for C-sections and labor pain management.

“There’s a minimum fixed cost you incur (as a hospital) to have all of that, regardless of how many births there are,” Miller said.

In most cases, insurers don’t pay hospitals to maintain that standby capacity; they’re paid per birth. Hospitals cover their losses on obstetrics with revenue they get from more lucrative services.

For a larger urban hospital with thousands of births a year, the fixed costs might be manageable. For smaller rural hospitals, they’re much harder to justify. Some have had to jettison their obstetric services just to keep the doors open.

“You can’t subsidize a losing service when you don’t have profit coming in from other services,” Miller said.

And staffing is a persistent problem.

Harrison County Hospital in Corydon, Indiana, a small town on the border with Kentucky, ended its obstetric services in March after hospital leaders said they were unable to recruit an obstetric provider. It was the only delivering hospital in the county, averaging about 400 births a year.

And most providers don’t want to remain on call 24/7, a particular problem in rural regions that might have just one or two physicians trained in obstetrics. In many rural areas, family physicians with obstetrical training fill the role of both obstetricians and general practitioners.