Maternal health has long been a challenge in rural areas, with 52.4% of 1,955 rural hospitals not offering obstetric care as of 2022, according to a 2024 research letter published in JAMA. With Medicaid cuts coming, experts have previously told us access to birthing services is only expected to become more difficult.
New research from Carnegie Mellon University, Northwestern University, and the University of Georgia may provide more insight into why maternal care access is challenged in these areas—namely, due to mergers and acquisitions.
The study, which is a National Bureau of Economic Research working paper, found that five years after rural hospitals are acquired, they are 30% less likely to provide obstetric services.
“It is very much a growing and troubling trend in rural communities,” Carrie Cochran-McClain, chief policy officer at the nonprofit National Rural Health Association, told Healthcare Brew.
Study session. To conduct the study, researchers pulled M&A information from the American Hospital Association and data analysis firm Irving Levin Associates, and reviewed 467 M&As (317 involving at least one rural hospital) from 2006 to 2019.
There are three main reasons rural hospitals struggle to offer obstetrics care, Cochran-McClain said.
For one, Medicaid covers 47% of all births at rural hospitals, according to KFF, and tends to reimburse providers much less than what commercial insurers do ($8,732 less on average for all deliveries, a 2022 study of 38 states found).
“They’re losing money on the obstetrics services they’re providing,” Cochran-McClain said.
Staffing is difficult as a result, she added, noting that lower birth volumes (as fewer people live in rural areas) and low payments make it hard to pay workers and maintain the right equipment for labor and delivery services.
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Last, malpractice insurance puts pressure on rural hospital providers, she said. In a 2022 report from independent watchdog the Government Accountability Office, stakeholders said the number of deliveries a provider needed to perform to offset the cost of malpractice insurance (around 100 a year) could be the total amount performed in a rural facility that year.
It’s more likely facilities that are struggling financially are “choosing to or having to” close because there are so many factors “stacked against being able to offer labor and delivery,” Cochran-McClain said.
Easy acquisition. These challenges can leave rural hospitals open to an M&A deal, too, as it’s sometimes their only means of survival. And health systems can help the rural facility grow market share and access more patients.
There were 128 M&As of critical access centers (a federal designation for certain rural hospitals at least 35 miles from another hospital) between 2010 and 2022, according to 2024 research from University of Minnesota, University of North Carolina-Chapel Hill, and University of Southern Maine researchers.
Cochran-McClain said M&As can bring increased access to equipment, technology, referral networks, and specialty care. But it also means the facilities and communities lose “independent decision-making” about what services to offer or if the hospital will even stay open.
“Obstetrics is definitely a good example of [when] the community may not have the same influence on being able to provide that service as when it was an independent,” she said.