Dr. Jack Ludmir of the University of Pennsylvania Health System views a sonogram of Angela Montanaro of Philadelphis with sonographer Deanne Adler. Photo by: Curt Hudson.
When Jeanes Hospital shuts down its maternity department at the end of the month, it will become the 14th local hospital to either get out of the baby delivery business or close altogether in the past decade.
The number could soon grow to 15. Chestnut Hill Hospital officials are reviewing whether its obstetrics department will remain open.
That leaves 28 hospitals and two birthing centers to handle the estimated 50,000 births that occur each year in Philadelphia and its four surrounding Pennsylvania counties.
Many of those hospitals are struggling to find ways to address the economic, physical capacity and staffing requirements needed to handle more births.
"Clearly it's a crisis; there's no question about it," said Dr. Jack Ludmir, chairman of the department of obstetrics and gynecology for Pennsylvania Hospital.
Pennsylvania Hospital, part of the University of Pennsylvania Health System, had the busiest obstetrics department in the area last year, handling 4,839 deliveries. Ludmir said the health system's administration is reluctant to invest money in additional space or technology for his department because obstetrics is not a service line that generates profits.
"Obstetrics, compared to other service areas like orthopedics or cancer care, can't compete," he said. "There's a huge discrepancy. If it takes a hospital 10 deliveries to make what it earns in one 30-minute knee surgery, why would they invest in obstetrics. It's a problem, a problem of reimbursement."
'Unacceptable and dangerous'
The Delaware Valley Healthcare Council and its parent, the Hospital & HealthSystem Association of Pennsylvania, are lobbying state lawmakers to create an obstetrics stabilization fund.
Such a fund would support hospitals with large volumes of medical assistance patients to assure continued access to obstetric services for expectant mothers and babies relying on Medicaid. The state has similar funds to help support trauma centers and burn centers.
"We've already crafted the legislation, and we have sponsors in the House and Senate," said DVHC Senior Vice President Ken Braithwaite. "This is a real problem. It's a problem of capacity, a problem of reimbursement and a problem of liability insurance."
The Philadelphia delegation of state legislators sent Gov. Ed Rendell a letter three weeks ago asking him to address the OB closings, which they described as an "unacceptable and dangerous" trend.
"Women in labor are rightfully fearful of increased travel time to reach their delivery site," the letter states.
The DVHC's OB Services Task Force formed last year to study the issue is scheduled to outline its full slate of recommendations next week. Those recommendations include medical-liability reforms, such as the continuation of the state's MCare abatement program that uses cigarette tax funds to cover the state-mandated portion of ob/gyns medical malpractice premiums. The task force also backs the expanded use of nurse midwives, physician assistants and family practitioners to support obstetricians in "normal" deliveries.
Braithwaite said the council has discussed the OB reimbursement issue with Independence Blue Cross and Highmark, the state's two largest Blue Cross organizations, which intend to merge.
"They said they are going to take a look at their rates and see if there is some way they can help the hospitals," he said.
Ludmir said the heads of the obstetrics departments at the Philadelphia hospitals that are still delivering babies have been meeting monthly to "strategize about resources" and work with the DVHC task force on the issue.
Of rules and money
Also represented on the task force is the nonprofit Maternity Care Coalition in Philadelphia, which spurred the formation of the task force after issuing a report, "Childbirth at a Crossroads," on the troubled state of obstetrical care in southeastern Pennsylvania.
Among the report's findings: "Obstetrics is no longer the gateway to lifelong loyalty to a hospital. Today, referral patterns are determined by insurance contract agreements."
The coalition is urging the state to temporarily relax obstetrical department guidelines that govern physical space devoted to the service so hospitals can take on more deliveries without needing to spend millions of dollars to expand or renovate space to be in accordance with state Department of Health regulations.
Letty Thall, the coalition's public-policy director, said the group also supports allocating extra funds to hospitals that have a high volume of Medicaid deliveries.
The coalition has also brought up the idea of prohibiting hospitals that receive state support from closing obstetrical departments. "We don't think they should be able to drop OB for service lines with more favorable reimbursements," Thall said.
Under a special funding arrangement with the state, Temple University Hospital was the lone hospital in the state to qualify for a special $4.8 million payment, from state and federal matching funds, created to support the high volume of births handled by Temple's obstetrics program for women on medical assistance.
Temple officials said they were losing $25 million a year on obstetrics because of shortfalls in government payments for deliveries and the escalating malpractice insurance costs.
The infusion wasn't enough to offset systemwide losses that resulted in Temple announcing a series of cost-cutting moves that included phasing out obstetrical services at Jeanes.
A losing proposition
Jeanes CEO Linda Grass said her hospital didn't have the capacity to handle the influx of deliveries that followed the closing of Parkview Hospital in 2003 and the shutdown of Frankford Hospitals' OB unit last year.
"Jeanes has been in the OB business for 50 years," Grass said. "In the early 2000s we [reached] 800 deliveries and we thought that was it. We thought the day would never come when we broke 1,000 deliveries in a year. The department was constructed to max-out at a thousand deliveries and we thought we could accommodate that volume."
Because of the other OB closings, Jeanes reached 1,300 deliveries its last fiscal year and was on track to perform 1,700 this year. Grass said with reimbursement levels not covering its costs, particularly for Medicaid deliveries that had grown to about 37 percent of all deliveries, the unit was losing $1.5 million to $2 million. The deficit is the largest deficit for any Jeanes hospital department.
"[Closing the OB unit] was a very difficult decision, but we thought it was the responsible decision," Grass said.
Ludmir said Pennsylvania Hospital's OB department realized a small profit on deliveries paid for by private insurers. The profit is turned into a deficit when the indirect costs, primarily malpractice insurance expenses, are factored into the equation.
Pennsylvania Hospital has experienced a steady increase in medical assistance deliveries, which pay less -- about half of what the private insurers pay, according to some hospital administrators -- for deliveries. Ludmir said the hospital has also experienced a steady increase in pregnant women arriving with no insurance and having received no prenatal care. The growth of undocumented, and uninsured, immigrants in the region is only exacerbating the situation, he said.
No hospital officials would provide specific reimbursement rates for deliveries because of their confidentiality agreements with insurers. The service line is expensive not only because of malpractice premiums, but also because the units must be staffed 24 hours a day seven days a week.
Dr. Nancy Roberts, the chairwoman of Main Line Health's department of obstetrics and gynecology, said some hospitals in the region are losing up to $2,000 on every delivery. Those that don't have high percentages of patients covered by private insurance in other more profitable services lines have trouble absorbing those losses, she said.
At Abington Memorial Hospital, only about 6 percent of the 4,597 deliveries it handled last year involved women on Medicaid or with no insurance.
Meg McGoldrick, Abington Memorial Hospital's executive vice president and chief operating officer, said the medical center basically breaks even on obstetrical care.
"We see this as a major service for the community," McGoldrick said. "We need fair reimbursements for the services we provide."
McGoldrick said while the hospital has a limited capacity to handle more births after Jeanes closes its OB, it's more concerned about having space in its neonatal intensive-care units.
Neonatal options dissipate
Along with the obstetric unit closings, the region has lost about a half-dozen neonatal intensive care units (NICUs) during the past decade.
McGoldrick said the hospital is seeking a waiver from the state Health Department to expand its NICU to 31 beds from 28 during periods of high demand.
Lankenau Hospital in Wynnewood is opening an NICU next month as part of a $16 million renovation and modernization of its obstetrics department. Roberts said the hospital, part of Main Line Health, saw its deliveries drop in the mid-1990s when its health system parent proposed the idea of converting the facility into a heart hospital and transferred all obstetrics to nearby Bryn Mawr hospital.
The idea was rejected following a community uproar. Deliveries slowly climbed and have held steady at about 2,300 a year for the past decade.
Roberts said the recent OB closings in Northeast Philadelphia were too far away to affect Lankenau. She said the hospital did experience a 50 percent jump in Medicaid OB patients and overcrowding in its outpatient clinic after City Avenue Hospital closed and Mercy Fitzgerald and Mercy Philadelphia hospitals closed their OB units in 2002 and 2003. |
