Financial challenges of providing obstetric services at rural US hospitals

Abstract Purpose This study describes perspectives of rural hospital administrators regarding the financial context for operating obstetric units, including the unique challenges they face and the strategies they have implemented to maintain obstetric services. Methods In this mixed‐methods study, we used data from a survey we conducted from March to August 2021 of administrators of rural hospitals that had maintained or closed their obstetric units. Key financial outcomes included general finances, size and equipment, payor mix, workforce, and other fixed costs, examined descriptively. We also conducted thematic content analysis of open‐ended responses to financial questions. Findings Respondents from hospitals that closed obstetric services ( n = 40) reported that physician shortages (67%), financial losses (62%), clinical safety (56%), liability insurance costs (51%), and nurse shortages (39%) influenced the decision to close obstetric units. Among hospitals with obstetrics ( n = 88), more than half (55%) reported that their hospital was operating with a profit margin, but only 41% said their obstetric unit had more revenue than costs. Of the hospitals with obstetrics who responded about the future of their obstetric units, 77% (61/79) were confident that they would continue providing obstetric care in 10 years; their open‐ended responses highlighted the importance of hospital leadership's commitment to maintaining obstetric services in their communities. Conclusions Rural hospitals cite clinical workforce challenges, high fixed costs, and declining birth volumes as financial challenges to providing obstetrics. Strategies for maintaining obstetric care in rural communities should account for lower birth volumes in rural facilities and these interrelated challenges.