The observation room in the Dr. Maurice Fitz-Gerald Birthing Center at Whitfield Regional Hospital, Tuesday, June 27, 2023 in Demopolis, Alabama. (Vasha Hunt for Alabama Reflector)
DEMOPOLIS, Alabama — Whitfield Regional Hospital closed its labor and delivery unit in 2014. Operating the unit and offering labor services was unsustainable.
Then maternal mortality increased in its service areas.
“I can’t tell you how many times we had patients show up in our emergency department who would say they didn’t even know they were pregnant,” said Douglas Brewer, the CEO of Whitfield Regional. “We had two of those about a year before we opened the program, who literally came in with abdominal pain, had no idea why, and before they left this hospital, delivered the baby in our emergency department.”
Last year, Whitfield decided to reopen the unit.
“I wish we could say that we have all the money to pay our bills, but we don’t,” Brewer said. “We struggle every day to continue to provide the care, and the service, and we get by. But we feel like it is part of our mission, and we have to do it. You can’t see that you have the highest mortality rate in the state in this region, and not do everything you can to try and address that.”
It’s an increasingly rare development in Alabama’s Black Belt. Many other medical centers in the region don’t have a labor and delivery unit, forcing many expectant mothers to drive hours to have infants delivered at a more urban center.
A 2022 report from the March of Dimes listed 25 counties in Alabama as maternity deserts, lacking obstetrics services or obstetricians available for residents. Another 21 counties are classified as places with low access to maternity care.
Roughly 1.6 million Alabamians, about a third of the state population, live in those areas. Of the counties with little access to maternal care, only four (Coosa, Dale, Dallas, and Fayette counties) have populations under 50,000.
The places with the worst access also have some of the most vulnerable populations, and experience higher rates of infant and maternal mortality.
Alabama had the sixth-highest infant mortality rate in the nation in 2020, according to statistics from the Centers for Disease Control and Prevention, with 403 deaths, a rate of 6.99 per 1,000 live births. Only Mississippi, Louisiana, Arkansas, South Dakota and West Virginia had higher rates that year.
The Alabama Department of Public Health reported the state infant mortality rate rose to 7.6 deaths per 1,000 live births in 2021. There are sharp racial disparities in the numbers: among white Alabamians, infant mortality was 5.8 per 1,000 live births that year. Among Black Alabamians, it was 12.1 per 1,000. In Marengo County, where Whitfield Regional is located, the infant mortality rate was 13.1 per 1,000.
According to a 2020 ADPH report that reviewed 80 maternal deaths in Alabama, more than 55% of the deaths were preventable.
More than three quarters of the preventable deaths had some “modifiable contributing factors.” About 86.3% of the deaths had multiple contributing factors. Some of it was at the patient and family level, including substance abuse or a delay in referral or access to care.
There were factors related to the provider, such as knowledge of care and a lack of referral to required services or consultation. Systemic issues were also identified, from poor communication to lack of access.
The reasons for the decline in maternal care units are many, involving declining rural populations, the economics of American health care, and the ability of wealthier patients to choose urban or suburban settings.
George Pink, deputy director of the North Carolina Rural Health Research and Policy Analysis Center, which studies the impact of federal insurance programs on rural areas, said rural hospitals struggle to attract enough patients to keep their doors open. Many patients who come may be uninsured and struggle to pay their bills who will unlikely be able to pay the hospital for the care they receive.
“Typically, they have been losing money for years and years,” Pink said. “They essentially draw down their reserves, max out their credit, sell off assets until they really have no other way to go. They can’t try to put themselves up for sale, and there are no other alternatives left for them.”
Harold Miller, the president and CEO of the Center for Healthcare Quality and Payment Reform, a Pittsburgh-based group that advocates for changes to health care payment and delivery systems, said the largest number of hospital closings happened in 2019 and 2020, when 35 rural hospitals closed due to years of financial pressures.
Federal subsidies to hospitals during the COVID pandemic provided some relief in 2021 and 2022. But with pandemic funding running dry, many face a dire financial picture.
“In many cases, the rural hospitals have looked very profitable over the past couple of years because they got these big, one-time grants,” Miller said.
The facilities themselves may have issues. Some could be deteriorating physically or employ outdated technology. They may also be facing a physician shortage, without the doctors needed to cover shifts when the medical facility accepts patients.
“If you are running an emergency department, you have to have a physician there 24 hours a day, 7 days a week to deal with emergencies,” Miller said. “But if you are in a small, rural hospital, you have fewer emergencies.”
Physicians and medical staff have specialized training that often requires paying them a premium for their expertise. Those expenses remain regardless of the time, unlike other businesses in which their employees can be relieved when business is slow.
Alabama’s rural areas have declined over the last decade. The total population of the state’s counties with populations of 50,000 or less fell 4.6% from 2010 to 2020, according to the Montgomery Advertiser. Perry County in the Black Belt lost 20% of its population during that time.
That affects rural hospitals.
“They tend to be located in small, or declining, populations,” Pink said. “They have high unemployment rates, numbers of uninsured patients. There is a high proportion of Medicare and Medicaid patients, and they could be in close proximity to competition.”
Barbour County in the southeastern part of the state, has just 25,000 residents, a number that has been basically static since the 1980s. Wilcox County, Gov. Kay Ivey’s home and another place listed as a maternal health desert, has a population of almost 10,500. It’s declined about 28% since 1980, when its population was about 14,500.
Counties with populations of 100,000 or more are generally more adequate for providing access to maternity health services, according to the report.
Hospitals must also have the right payor mix, with enough patients who have insurance that will reimburse the hospital enough to offset the costs of those who struggle to pay.
People generally have three insurance types: Medicaid, Medicare, and private insurance. The proportion of each of those could mean the difference whether a hospital remains viable or gets overwhelmed with the operating costs.
Medicare reimburses rural hospitals more than others through a special payment system. The insurance pays rural hospitals for the actual cost of delivering services, and only small, rural hospitals qualify for the program.
“For small, rural hospitals, Medicare is actually their best payor,” Miller said. “It doesn’t mean that they are making profits on those Medicare patients, but it does mean they are not losing very much, if any, money on Medicare patients.”
Miller claims the issue for hospitals in rural areas is that private insurance companies are not reimbursing health care facilities enough for treating patients.
“One is because they can,” Miller said. “Health plans are big; small rural hospitals are small, and so the health plan can say ‘Here is what we pay. Take it or leave it.’ Whereas big hospitals have far more negotiating power, so the small rural hospital can be paid less than bigger hospitals for the same service.
The cost of delivering services may also be higher in the rural areas than urban centers, and insurance companies are not willing to cover that additional cost.
“There is a general myth that somehow only patients going to rural hospitals are Medicare and Medicaid patients,” Miller said. “About half of their patients are private insurance payors. If those private health plans don’t pay more for small, rural hospitals, the small, rural hospital will lose money and may be forced out of business on that basis.”
According to information compiled by the Center for Healthcare Quality and Payment Reform, three hospitals with large negative margins for private payor insurance are all in maternity care deserts. Two-thirds of the patients at J. Paul Jones Hospital, located in Camden, are private payors in which the hospital loses 70 cents for every dollar it receives from private insurance. For Hill Hospital of Sumter County, about 57% of its patients are private payors, with a margin of -68%. A third is Tanner Medical Center-East Alabama, about 61% of its patients have private insurance with a margin of -45%.
Pink argued that Medicare is a good payor, paying 99% of costs, but not one that will be especially profitable. There are large differences among the rates that private insurance will reimburse for services.
Medicaid pays about 84% of what Medicare pays, according to KFF. Many rural counties have a high number of lower-income individuals, who are more likely to have Medicaid. The poverty rate for Barbour County is 21.7%. For Wilcox County, it is 21.4%.
But Medicaid remains critical to Alabama health care. According to the annual report from the state’s Medicaid agency, about half of all births are paid via the program.
Closing maternal care units
Labor and delivery units are some of the least profitable departments for a hospital. With rural populations in decline, the units rarely drive profits at the hospital. They also must be continuously staffed, adding to fixed costs.
“It is even more of a challenge and burden in rural areas when it comes to labor and delivery, or obstetric units’ staff when you have fewer people because you have lower birth volumes,” said Julia Interrante, a research fellow and statistical lead at the University of Minnesota’s Rural Health Research Center.
At Whitfield, Ashley Steiner, OB Director, UMC (University Medical Center) Demopolis, said that ideally the unit would be staffed by two registered nurses with one or two technicians, with the hospital having at least four physicians rotating weekend on call duty one weekend per month.
Whitfield plans on having three providers in about a month.
Rural areas have fewer practicing obstetricians versus medical centers located in more urban centers. Shortages of physicians in rural areas push pay demands higher. There is also the added cost of malpractice insurance, which is higher for labor and delivery issues.
“Having access to an operating room if there is a need for a caesarean delivery that has to occur, that is another high fixed cost,” Interrante said. “We see challenges that don’t have a dedicated surgery room for obstetrics. One service room that must be shared across all services, that can be challenging.”
In a statement, Christopher Zahn, interim CEO and chief of Clinical Practice and Health Equity and Quality of the American College of Obstetricians and Gynecologists, said the COVID-19 pandemic and the Supreme Court’s decision last year to strike down federal abortion rights had exacerbated problems delivering care.
“The United States is the only well-resourced nation with a maternal mortality rate that is on the rise,” the statement said. “The stark racial and ethnic disparities in maternal mortality are significant and concerning. CDC data demonstrate that maternal mortality rates in rural counties are almost double those of metropolitan counties, and Black women experienced a rate that is roughly three times higher than that of white women in the same counties.”
The Sheps Center at the University of Carolina at Chapel Hill lists 7 rural hospitals that closed in Alabama since 2005. According to the Alabama Department of Public Health, 45 of the 54 rural counties provided obstetrics services in 1980. Now only 16 rural counties provide it.
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Some women in rural areas choose to deliver babies in urban areas.
“Delivery is a service that can be very elective, meaning that patients can choose many days in advance, it is not an emergency,” said Ge Bai, professor at the Johns Hopkins Bloomberg School of Public Health’s Department of Health Policy and Management. “The lady can say, ‘I don’t want to deliver a baby in this rural hospital. I am going to take a two-hour drive to a larger one. I can do that.’ This can be arranged in advance.”
Bai pointed to a 2015 study in The Journal of Rural Health in 2015 that found that about 48% of residents in rural areas bypass their local hospital or medical center and drive to more urban areas for elective procedures. A 2015 study published in the American Journal of Obstetrics and Gynecology found that about 25% of women in rural areas give birth in a nonlocal medical setting.
Bai said rural hospitals struggle to convince residents their services are high quality.
“People intuitively understand volume means higher quality,” Bai said.
That travel is not necessarily an option for poorer patients. But if those with private insurance go elsewhere, it leaves fewer people with insurance that covers the cost of maternal care units.
“That becomes the first victim when the hospital is thinking about getting a lean operation,” Bai said.
Those dynamics are playing out in the case of Whitfield Regional Hospital. Many of the patients who have their babies delivered at Whitfield are on Medicaid. Brewer estimates that for every 100 infants delivered at his hospital, about 95 of them will have Medicaid insurance, whose reimbursement rates are inadequate to fund a fully functioning labor and delivery unit.
“You know, I am trying to think of a better word to use than ‘adverse selection,’ but, really and truly, that is what it is, from a payor source standpoint.” Brewer said. “The problem with labor and delivery programs in rural Alabama is that we do not have Medicaid expansion here in Alabama.”
The birthing center offers the hospital a more traditional service option for delivering infants. Prior to the unit opening last year, expectant mothers would be transferred to DCH Regional Medical Center in Tuscaloosa. Those giving birth immediately would do so in the hospital’s emergency department.
“If you go to Brookwood in Birmingham, probably 10% of those are going to be Medicaid,” Brewer said. “There’s not going to be a lot of Medicaid moms in Mountain Brook. They are getting paid much higher rates by Blue Cross Blue Shield, by Cigna, by United, by all the commercial insurers.”
That payor mix is a function of the area and the characteristics of the population.
“Particularly when you are talking about 18–25-year-old females,” Brewer said. “There’re not tons of high-end jobs here where they have great benefits.”
Brewer said the hospital loses $20,000 to $25,000 on the labor and delivery unit, though he expects those losses to fall to $10,000 when it fully develops. But the unit has to be subsidized from profits in other operating areas, such as its wound and stroke units.
Labor and delivery and maternal mortality
Without labor and delivery units, it was effectively cost prohibitive for doctors to practice in the more rural parts of the state.
“What happens is if you get pregnant, you need prenatal care,” Brewer said. “Well, it is very, very difficult for obstetricians to make a living where they can’t deliver babies.”
There were not even pediatricians because there were so few OBs to create a viable market for pediatricians to practice in the rural areas, according to Brewer.
“Well, you say, ‘no big deal, people just go an hour and 15 minutes and get to an OB,’” Brewer said. “But we are talking about 90% of Medicaid patients, they don’t have cars that will get them to Walmart.”
Steiner said that a labor and delivery unit provides a soon-to-be mother with prenatal care service.
“I can bring that woman in,” she said. “I can get her blood pressure under control.”
Hypertension is one of the more common complications that can happen during pregnancy, which can require some interventions if it is not kept under control.
“There’s an ideal cutoff at about 34 weeks gestation when it is really a turning point in the pregnancy,” Steiner said. “When your blood pressure is getting out of control to a critical point in that management, the question always comes, ‘Do I deliver the baby early to minimize risk to mom, or do I allow mom to be pregnant longer and hope to benefit the baby?’”
A labor and delivery unit allows patients access to that level of monitoring and expertise. The mother can come in, have a room available, and allow the physician to get the blood pressure under control and stabilize the patient.
The Alabama Department of Public Health is playing up the work the state is doing with prenatal care. In 2022, the Legislature voted to extend postpartum Medicaid coverage for 12 months after birth.
“Medicaid expansion for women with prenatal care and postnatal care up to a year after delivery is very significant because previously, women only had coverage for care up to 60 days after delivery,” said Karen Landers, the state’s chief medical officer. “Going up to a year after delivery is really good.”
She also cited outreach programs in Cahaba, and a UAB partnership with Dallas County.
“I really think some answer to this is to have women perhaps being able to get prenatal care closer to home and then being able to deliver even in an adjacent county or a county that is close by,” Landers said. “I know that is the situation in a number of our more rural counties. There may be a provider in the county, but they deliver in a hospital that is a county, or two, or three, away.”
Landers acknowledged that establishing labor and delivery units is more cumbersome.
“We would like to have more labor and delivery units in our state, in our more rural counties, that would be a good thing,” Landers said. “But I think if we look at providing such types of units, certainly now, it is something that might be more difficult to have happen.”
One possible solution for the closures according to Miller is to pay hospitals for providing a service that the public takes for granted.
“There needs to be, what we argue, is a standby payment,” he said. “The hospital should get a certain fixed amount every year to have a labor and delivery unit available. They will still get paid for individual deliveries, but those payments can be lower for the individual deliveries, which also makes it more affordable for the mothers who are delivering babies, but you need to have a payment that covers that fixed, standby cost.”
The authors of the March of Dimes report recommend expanding Medicaid which would make insurance available to people living at or below 138% of the federal poverty level ($20,140 a year for an individual; $34,307 for a household of three). Expanding Medicaid would increase Whitfield’s customer base and improve reimbursements.
“That is the bottom line,” Brewer said. “That is a huge amount of money to improve the health of our population if we could ever make it happen.”
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