Study finds that rural hospitals are 30% less likely to provide obstetric services after being acquired

Maternal health disparities have long plagued rural areas, where a staggering 52.4% of 1,955 rural hospitals did not provide obstetric care in 2022, as revealed in a 2024 research letter published in JAMA. The forthcoming Medicaid cuts herald a bleak outlook for access to birthing services in these underserved regions.

Recent research conducted by Carnegie Mellon University, Northwestern University, and the University of Georgia sheds light on the barriers to maternal care access in rural areas, pointing to mergers and acquisitions as a primary culprit. The study, a National Bureau of Economic Research working paper, unearthed a disheartening reality: five years following mergers, rural hospitals are 30% less likely to offer obstetric services.

Carrie Cochran-McClain, chief policy officer at the National Rural Health Association, characterized this trend as a concerning and escalating issue within rural communities. The study, based on data analysis from the American Hospital Association and Irving Levin Associates, scrutinized 467 mergers and acquisitions from 2006 to 2019, 317 of which involved at least one rural hospital.

Cochran-McClain explicates three core reasons for the struggle rural hospitals face in providing obstetric care. Firstly, Medicaid, which accounts for 47% of all rural hospital births, notoriously reimburses providers significantly less than commercial insurers, with an average shortfall of $8,732 for all deliveries, as indicated by a 2022 study of 38 states. This financial strain leads providers to operate obstetric services at a loss.

Moreover, staffing shortages compound the challenge, given the diminished birth rates in rural regions and inadequate payments that impede hospitals from adequately compensating employees and maintaining essential labor and delivery equipment. The persistent burden of malpractice insurance further squeezes hospital providers, with stakeholders positing that rural facilities would need to conduct approximately 100 deliveries annually merely to offset insurance costs, a threshold that could potentially surpass the total number of deliveries in a rural facility for an entire year.

Consequently, financially strained facilities are often compelled to shutter their obstetric services due to the myriad obstacles hindering their ability to provide comprehensive care, laments Cochran-McClain. Such mounting challenges often render rural hospitals susceptible to acquisition deals, which sometimes stand as their sole lifeline for survival. While mergers can offer advantages like enhanced access to technology, specialized care, and broader patient networks, they also come at a cost, resulting in a loss of independent decision-making autonomy for facilities and communities regarding service offerings and operational decisions.

In the case of obstetrics services, communities may find themselves voiceless in determining the fate of essential services that were once integral to their healthcare landscape. Cochran-McClain underscores the urgent need to address these systemic issues to ensure equitable access to maternal care in rural areas.