Rural Hospitals Are Dying

Rural Hospitals Are Dying and Pregnant Women Are Paying the Price

Heavily reliant on Medicaid dollars, small hospitals shut down maternity wards just to stay afloat.

By LISA RAB

Three years ago, Lucia Parker gave birth to her first child surrounded by people she loved. Her mother, sister, and husband were by her side at Blue Ridge Regional Hospital, and the nurses attending her were family friends. Each of them took turns massaging her back. They lifted her out of a birthing tub and gave her an epidural when the labor pains grew too intense. By the time her son was born, there was not a dry eye in the room. “It felt like family,” Parker says.

The hospital, in Spruce Pine, North Carolina, was 25 minutes from Parker’s home. But this February, when her second baby is due, she won’t be able to deliver there. Instead, she plans to drive an hour-and-a-half southwest to Mission Hospital in Asheville, on mountain roads that could be slick with ice and snow, to give birth in a room with nurses and staffers who are strangers. “I have no idea how that’s actually going to work,” she says. “I am not gonna know anybody when I have this baby.” She doesn’t have much of a choice. Blue Ridge’s labor and delivery unit, which delivered 173 children last year, shut down on September 30. The next closest hospital with a maternity ward, McDowell Hospital in Marion, is roughly an hour southeast of Parker’s home, but she’s afraid to drive there in labor. To reach it, she would have descend 1,400 feet in elevation, navigating a road with curves so tight motorcycle riders call it “The Devil’s Whip.”

Parker is not alone. As Congress debates repealing and replacing the Affordable Care Act, rural hospitals are in a kind of purgatory, unsure about their Medicaid budgets and the private health insurance that sustains them. At least 81 rural hospitals have shut down across the country since 2010, according the North Carolina Rural Health Research and Policy Analysis Center at UNC. The pace of closures has been increasing since the Great Recession, but the current health care policy limbo—which leaves hospitals and insurers unable to predict their income—exacerbates the problem. “The uncertainty is really impinging providers, particularly hospitals, from making the kinds of decisions that might put them on a better footing,” says center director Mark Holmes.

Parker lives in an impoverished swath of rural Appalachia where the hospitals are particularly vulnerable. In her Congressional district, 20 percent of families with children live below the poverty line and more than 40 percent of residents—roughly 318,000 people—rely on some form of publicly-funded health care. Another hospital in the district, Angel Medical Center in Franklin, North Carolina, shut down its maternity ward in July, after officials said the unit was losing $2 million a year. And Parker’s congressman, Republican Mark Meadows, has not intervened to keep them open. The Freedom Caucus chairman has been one of the nation’s most vocal critics of Obamacare, favoring legislation that ends insurance subsidies and makes deep cuts to Medicaid.

Any cuts to Medicaid would hurt rural hospitals, says Diane Calmus, government affairs and policy manager for the nonprofit National Rural Health Association. Seventy-five percent of patients in the Mission Health system—the nonprofit that runs Blue Ridge, Angel, and four other western North Carolina hospitals—are either uninsured or on Medicare or Medicaid. These hospitals were especially hard hit when the Republican-led North Carolina General Assembly refused to expand Medicaid in 2013. Eighteen other states made the same decision, and the impact was clear: more than 70 percent of the rural hospitals that shut down in the past seven years were in 16 of those states. Four hospitals in rural North Carolina have closed since 2013, and Blue Ridge has been losing money every fiscal year since 2013. Last year it lost $3.1 million. Charity care—services that no one pays for—at rural hospitals has increased more than 50 percent since Obamacare passed. “We have a rural hospital closure crisis,” Calmus says.

Holmes and other experts say the lack of Medicaid expansion is not the only cause of the crisis. They point to low Medicaid reimbursement rates, patients who can’t afford their deductibles, consolidation of hospital ownership, declining rural populations, medical staffing shortages, and a longstanding trend of Southern hospitals struggling to make ends meet. “You really have a death by a thousand paper cuts situation here,” Holmes says. But if a hospital wants to stay open, Calmus says, it may close a unit that is well-known for losing money: the maternity ward.

A recent study by researchers at the University of Minnesota found that more than half of the nation’s rural counties no longer have hospital obstetric services, and 9 percent of them lost those services between 2004 and 2014. Katy Kozhimannil, an associate professor at the University of Minnesota School of Public Health who co-authored the study, says hospital officials make these decisions only after weighing the community’s needs against their ability to keep their doors open. More than half of all births at rural hospitals are funded by Medicaid, but the program reimburses hospitals at half the rate private insurance would. Low birth rates in rural areas compound the problem, because there are fixed costs for maintaining around-the-clock nurses, technicians, doctors and equipment. Mothers in Yancey County, where Parker lives, had 182 babies in 2015, compared to mothers in Buncombe County, which contains Asheville, who had 2,625 babies that year. “Obstetrics… is not a money maker for hospitals anywhere,” Kozhimannil says. “At some point, it just becomes untenable to have the staff available.”

Mission Health officials say the decision to close the labor and delivery unit at Blue Ridge was not a financial one. They blame low birth rates at the hospital and concerns about “clinical quality and safety standards,” says Cara Truitt, regional advocacy director for Mission Health. Truitt pointed out that Blue Ridge had just one full-time obstetrician on call to deliver babies, and officials worried about providing the “general surgery support” needed to perform C-sections. By contrast, McDowell Hospital in Marion has three obstetricians, and Mission is currently investing $45 million to rebuild that hospital, with five new delivery rooms and a C-section suite slated to open next year.

But many of Blue Ridge’s doctors and nurses don’t buy that argument. In addition to the obstetrician, four other people currently deliver babies at Blue Ridge, and two of them are family practice physicians trained to perform C-sections. The real challenge, some argue, is not quality but quantity: Blue Ridge was projected to deliver 200 babies this year, which was not enough to offset its expenses. “It appears to us that the motive to close labor and delivery was largely financial,” the hospital’s medical providers wrote in a joint public statement released this summer. “Hospitals across the country face financial challenges. Labor and delivery units usually lose money.”

Mission concedes that the closure of Angel Medical Center’s labor and delivery unit was due, in part, to uncertainty over the future of Obamacare and the lack of Medicaid expansion in North Carolina. If the state had expanded Medicaid, Mission would be $8 million “better off,” instead of $34 million behind its budget goals, Mission CEO Ron Paulus told the local newspaper in May. (Paulus, through a spokesperson, declined to be interviewed for this story).

In April, senior Mission officials discussed the hospitals’ predicament with Meadows, who told local reporters he was shocked by the announcement that Angel’s labor and delivery unit would close. “Obviously it came as a bit of a surprise to me, but the decision was not predicated on anything we’re working on in regards to the repeal and replace of Obamacare—it was an independent business decision that was made,” Meadows told the Smoky Mountain News.

Meadows also denied that Medicaid expansion would have helped Angel keep its maternity ward open. “When looking at expanding Medicaid, it was mostly going to be for able-bodied single adults—that’s a totally different argument,” he said. In fact, pregnant mothers were covered by Medicaid before Obamacare passed. But Kozhimannil says an expansion would have sent more Medicaid payments to other parts of the hospital, and helped sustain money-losing operations, such as maternity wards.

Hospitals like Blue Ridge also receive special Medicaid funding, known as disproportionate share hospital payments (DSH), which help cover the cost of serving impoverished patients. Under Obamacare, those payments were supposed to disappear. In theory, they would be replaced by more patients receiving Medicaid coverage. But after many states refused to expand Medicaid, Congress repeatedly delayed the DSH funding cuts. They were slated to take effect on October 1, slashing $2 billion in federal funding from hospitals like Blue Ridge in the next fiscal year.

In May, Meadows said he was trying to find a way to avoid that funding cut. “I’m working with colleagues in the Senate on how we can work with what they call the disproportionate payment for Mission and other hospitals,” he told the Smoky Mountain News. “We now have to look at how we can make sure there’s incentive for taking care of those with critical needs and also keep providers financially viable.” It’s unclear if Meadows’ negotiations were successful. His press secretary did not respond to repeated requests for comment.

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In the last week of September, the doctors at Blue Ridge delivered a baby every day, sometimes more than one. “The system is not ready for our department to close,” Dr. Dorothy DeGuzman said. DeGuzman, a family practice physician trained in high-risk obstetrics and C-sections, has been delivering babies at Blue Ridge for six years. Now she’s afraid the hospital will not be able to help women who need an emergency C-section. “And then a baby will die, and possibly a mother.”

A 2011 study of more than 49,000 pregnant women in Canada found that traveling more than an hour to give birth led to higher rates of babies being admitted to neonatal intensive care units. Mothers also have more unplanned deliveries when hospitals close their maternity wards. “They end up delivering in their car on the way to the hospital, on the side of the road, [or] in the emergency room,” Calmus says.

Truitt, the Mission spokesperson, downplayed such health risks. In the “very, very rare cases” when a women needs to give birth on her way to another hospital, she says, Blue Ridge can deliver the baby in its emergency room, and have an ambulance transport the mother and newborn to Asheville or Marion.

But DeGuzman also worries her more impoverished patients will stop going to their prenatal appointments, which could affect the health of their babies. Blue Ridge will continue to offer prenatal care, but many women prefer to see the same doctors for their pregnancies and delivery. Calmus says lower-income women might intend to drive to Asheville for such appointments, and then stop showing up because they have to take a day off work, or can’t afford the gas to drive three hours round trip. And they won’t have DeGuzman there to remind them. After she learned Blue Ridge’s maternity ward would shut down, DeGuzman accepted a job in California. She and the obstetrician who works at Blue Ridge are both leaving because they don’t want to stop delivering babies. This means the women of Yancey and Mitchell counties are losing two of the three doctors in the area who perform C-sections. “In rural America, many physicians are connected to the hospital, and when the hospital cuts service lines closes, they do lose that workforce,” Calmus says. “And the workforce doesn’t come back.”

The people who live near Spruce Pine understand what a loss this will be. This summer, families and doctors protested the closure of Blue Ridge’s maternity ward, and many were frustrated by Mission’s response. “They elected to close labor and delivery at Blue Ridge, sending us back to a level of care we have not experienced in this community since the 1960's or 70's,” Dr. Elizabeth Peverall, who cares for newborns at Blue Ridge, wrote in a letter to the editor of the local paper.

Some residents wonder how they will attract more young people and jobs to the area if mothers have no place to deliver their babies. Katie Willett, another patient of DeGuzman’s, said she would like to see a birth center open in the area. However, Kozhimannil, the University of Minnesota professor, says birth centers, which are primarily staffed by midwives, face many of the same financial challenges as hospitals. And it would be tough for one to open without a nearby obstetrics unit available to handle C-sections.

Meanwhile, Willett’s second child is due in February. She’s considering delivering at a birth center in Asheville, about an hour away from her home near Blue Ridge. But she’s not happy about it. “I’ve told Dorothy [DeGuzman], I can’t imagine this process—pregnancy and labor and delivery—not here and not with her by my side,” Willett says. If she goes into labor when it’s snowing in the middle of the night, Willett and her husband will pack extra blankets and water in their car and start driving toward Asheville or Marion—whichever path is safest. “Worst case scenario, I think we’d have to consider the road.”