You’ve probably heard by now that, one by one, rural hospitals are closing their doors. And it’s true: Rural hospitals are hemorrhaging money, in part due to low insurer reimbursement rates, and are often forced to close. It’s a growing trend across rural America, including North Carolina. And according to an April 22nd article in NC Health News, 40% of rural hospitals are losing money specifically on obstetrics (OB) care.
The news article covers a new study from University of Minnesota Rural Health Research Center (UMRHRC), with some hospitals reporting that they needed “200 births per year to maintain safety standards and remain financially viable.” More than 40% said that they already aren’t meeting that threshold, and access to care is at serious risk.
The study found that many rural hospitals continue to operate these units in the red. Why? With serious complications possible if patients must drive long distances to deliver their babies, rural hospitals are putting patient needs first and continuing to provide these critical services, despite losing money as a result.
Losing a maternity unit is not just bad for the health of patients, but for the health of hospitals. According to the article, oftentimes “Losing childbirth services…[is] a precursor to closure.” In fact, between 2013 and 2020, nine maternity units closed in North Carolina.
Julia Interrante, a researcher from the UMRHRC, stated:
“It’s not always the case – sometimes we see things where hospitals will enter into mergers or move those services to another hospital location…. But often when they end up closing OB services, then it usually kind of leads toward the hospital closing.”
Of course, health insurers have become major critics of hospitals merging to save themselves over the last several years. But insurers do so to deflect the blame – knowing that reimbursement is one of the main reasons obstetrics units keep closing.
It’s a perfect illustration of just how complex hospital operations are. To have a safe place to deliver babies, you need licensed doctors and nurses, a sterile facility, all the necessary equipment and medication, and the resources to handle any complications that might arise.
You won’t know when the deliveries will happen (babies tend to not keep office hours), and you won’t know how many you’ll see in a year. You don’t know if any given birth will go perfectly or become a serious medical emergency. But, as a hospital, you have to be ready for all of it—all of the time.
So, when insurance companies are billed for these deliveries, all of that goes into the calculation. Because you aren’t solely delivering that patient’s baby, under that insurance company’s expectations. You’re preparing to deliver any baby, under any circumstances.
Insurers continue to highlight hospitals as the driver of healthcare costs. Meanwhile, “researchers concluded that…. how low-volume, rural hospitals are reimbursed should be investigated to ensure those hospitals’ financial viability.”
While rural hospitals continue to prioritize people over finances, can health insurers say the same?