California maternity unit closures are limiting care options across the state

In January 2023, El Centro Regional Medical Center in Imperial County closed its maternity wing after 67 years of service. The closure of El Centro's maternity wing left only a single hospital, Pioneers Memorial, providing maternity care in the entire county, which stretches some 4,000 square miles, and has a population of 175,000 people, not including an influx of migrant workers during parts of the year. Pregnant people who were patients at El Centro were told that outside of Pioneers Memorial Hospital, their other options were a 62-mile drive out of state to Arizona, or a 108-mile drive to Palm Springs.

In California, this story is increasingly the rule rather than the exception. In the past 10 years, at least 46 hospitals in California have shuttered their maternity units. Between 2020 and 2022, 16 hospitals closed their maternity units, and in 2023 there were at least 11 maternity units that ceased operations.  The situation is particularly dire in rural areas. California has 56 rural hospitals, 10 of which are at immediate risk of closure.  Only 24 of these 56 hospitals have maternity units, resulting in significant drive times for patients. With longer travel times, patients often skip prenatal and postpartum visits and may encounter dangerous situations during labor and delivery.

The reasons for these closures are multifaceted, but the overriding factor is that maternity units are rarely profitable. Like emergency rooms or intensive care units, maternity units must maintain 24-7 staffing and provide one-to-one nursing care during active labor. With high overhead costs and poor reimbursement rates in both Medicaid and private insurance, maternity units often operate in the red, relying on other hospital services with higher revenue to cover costs. The low profit margins are further exacerbated by California's declining birth rate, now at a record 100-year.

Home births and births in freestanding birth centers were already on the rise, but the COVID-19 pandemic created a palpable shift in demand, especially among Black birthing people and other birthing people of color. However, regulatory challenges have made it difficult for many services to expand. For example, freestanding alternative birth centers, which are meant to function more like a home than a hospital, are nonetheless required to meet building code regulations designed for hospitals. Midwives report having their birth center licenses denied for not having the right sized window or having a sink in the wrong location. Required renovations may be cost-prohibitive, yet without licensure the facility cannot be reimbursed for services. Additionally, under current birth center licensing rules in California, a freestanding birth center must be within 30 minutes of a hospital able to manage obstetrical emergencies, a requirement increasingly difficult to meet with maternity wings closing.

Also pressing are limits on certain services that should be reimbursed. For example, under Medi-Cal, licensed midwives are currently unable to bill for a Bakri balloon, an important tool to control a severe postpartum hemorrhage en route to the hospital. With maternity wings closing, the distance between a home or birth center and a maternity hospital is ever-increasing, and the Bakri balloon could very well be the difference between life and death. The result is that midwifery services eat the cost of certain medications and devices, further jeopardizing the financial stability of their practice.

Moreover, reimbursement rates for midwives are low compared to the actual costs of care. Total professional and facility fees for a normal vaginal birth with Medi-Cal barely break $1800. Midwives cannot sustain a community birth practice in maternity deserts unless their significant overhead costs are adequately reimbursed. Already, we see freestanding birth center closures due to inadequate staffing, a direct consequence of poor reimbursement rates. Reimbursement must also consider comprehensive care management and longer visits that lead directly to excellent outcomes for low-risk patients with midwifery care.

Solutions to preserve hospital maternity wings also require changes in reimbursement. The most obvious strategy is for Medi-Cal health plans to substantially increase facility reimbursement to maternity units to better align with the actual costs of service delivery. Other efforts include "standby payments" to incentivize hospitals to maintain on-call staffing for maternity services at all times, regardless of changes in profit from actual deliveries.

At the national level, consistent with these solutions, draft legislation was introduced in June aimed at preventing maternity unit closures by increasing Medicaid payment rates for labor and delivery services in certain rural and underserved communities, and providing standby payments and low-volume payment adjustments for hospitals with low birth volumes. The Biden Administration also recently issued new policies to reduce maternal mortality, which include a rate increase for hospitals and ambulatory surgical centers that meet certain quality reporting mandates, and propose baseline quality requirements for obstetrical services in critical access hospitals. 

Meanwhile, two California bills this session aim to address maternity wing closures, both by focusing on financial transparency and assessing community impact. AB 1895 requires hospitals contemplating maternity service closure to submit certain financial data to the state, undergo a community impact assessment, accept public comment, and hold at least one public hearing. SB 1300 similarly requires an impact analysis report, in addition to encouraging a public hearing. New York implemented similar measures last year. In late 2023, following a community impact assessment and public hearing, St. Peter's Hospital in Troy, New York, delayed the pending closure of its maternity unit, leaving enough time for the state to step in and stabilize operations.

California is on the verge of an unprecedented maternity care shortage. For many residents, the situation is already dire. California is a proven leader in health innovation and reproductive justice, and we already possess the solutions to course correct and think beyond short-term stopgaps to keep maternity units open. Now is the time to take the lead and make these solutions a reality.