- Fewer than half of rural hospitals in the U.S. still offer labor and delivery care and hundreds more may shutter services due to financial challenges, according to a new report from the policy firm Center for Healthcare Quality and Payment Reform.
- The cost of providing of care at rural hospitals can surpass reimbursement from payers — particularly private insurers — which pressures rural hospitals’ rail-thin operating margins, according to the report.
- The center called for payment reforms, including ensuring care is covered by insurance, and greater payment amounts for facilities that had higher fixed costs of services, such as regions with low birth rates or staffing shortages.
More than 200 rural hospitals across the country have stopped delivering babies over the past decade, and many have also reduced prenatal and postpartum care due to financial problems, according to the report.
Some rural hospitals elect to forgo maternal health programs in a bid to keep the rest of their facilities open, the current study said. One-third of rural facilities offering labor and delivery services lose money on maternal services.
“Currently, a rural hospital is only paid when it actually provides a service. However, a small hospital must be staffed and ready to deliver a baby at all times, even though there will be no deliveries at all on many days,” the authors wrote.
The closure of labor and delivery services is part of an ongoing rural health crisis in the U.S.
Nationwide, 30% of rural hospitals are at risk of closing due to inadequate revenues and low financial reserves, according to an earlier report from the center.
Smaller rural hospitals are more likely to suffer losses. More than half of small rural maternity care hospitals lost money from 2021 to 2022. If these hospitals are forced to eliminate maternity care, community residents would likely have to travel more than 40 minutes to reach a hospital with obstetric services, according to the report.
Longer commutes to hospitals are associated with higher-risk pregnancies, complications and death, both for the birthing parent and the child, according to the report.
The report suggests moving from a fee-based system toward a standby capacity payment model that would account for the volatility of patient volumes and help keep rural maternal health units viable. Under the payment model, insurers would pay “an annual Standby Capacity Payment to the hospital for each insured woman of childbearing age living in the community,” in addition to the fee for service.