Newspaper articles cited financial issues as the main reason for the closure. I was talking with someone a few weeks back whose friend a hospital administrator. Here's the inside scoop:
55% of our hospital's maternity patients were on Medicaid. Medicaid reimbursements were so low that the hospitals' maternity department lost $500,000 last year. The administrators feared that the entire hospital would have to close if this trend continued. So they decided to close the maternity department, rather than risk shutting down the hospital.
Now, I'm not sad that this particular hospital closed. It had one of the higher c-section rates in the state (33.4% as of 2008). It also banned VBACs, another thumbs-down in my book. In contrast, a small community hospital 30 minutes away had a cesarean rate of 23.7% the same year. Both hospitals served nearly identical patient populations--only low-risk pregnancies and near/full-term babies--and did the same number of births per year.
But I am disappointed that I no longer have a hospital 5 minutes away. Granted, I'd only go there in an extreme situation where it would be impossible to travel to the other hospital (which does VBACs and is working on its Baby-Friendly certification).
Low Medicaid reimbursement doesn't just affect hospitals. Currently 60% of my midwife's clients are on Medicaid, 20% have private insurance, and 20% pay out-of-pocket. Although her global fee is $3,600, Medicaid only pays 15% of that amount per birth (a bit under $700). She cannot require her Medicaid patients to cover the rest of her global fee, which means that she actually has to pay to take Medicaid clients. Her birth supplies and birth assistant cost her more than she gets paid. She is currently deliberating whether to stop accepting Medicaid, since it is causing her practice to lose money.
A flip side of low Medicaid reimbursement is exorbitantly high billing for those with private insurance. A friend had her baby at our hospital a few months ago, before it closed. She had a spontaneous vaginal birth with no maternal or infant complications and no nursery stay. The total fees for her prenatal care and birth came to $25,000. The bill was negotiated down a few thousand dollars, coming to a total of around $22,000. Between her deductibles and co-pays, she had to pay close to $5,000 out-of-pocket to have her baby.
Other reading on the topic:
- Will Your Hospital’s Maternity Ward Close? By Dr. Linda Burke-Galloway
- Lower TennCare rates for C-sections upset obstetricians (thanks to The Unnecesarean)
- Bye-bye babies: South Seminole closing its birthing unit today
- 2 VA hospitals closing maternity wards
- Hospital Maternity Wards Are Closing Across U.S.
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Part of the reason I felt so comfortable with a homebirth was that the hospital is less than 10 min away. I'm not sure how I'd feel if it was 30 min or more.
ReplyDeleteYour friend paying $5,000 out of pocket? That's why I question women who say, "I wanted a homebirth, but my insurance wouldn't cover it." My midwife's fees are $2,000, but people have been trained to believe they can't do anything "out-of-network" even if it means less money out of pocket.
My midwife, and the others in my area, have stopped accepting Medicaid because they pay so low it's not worth their time to bill them. It's really crappy that Medicaid reimburses homebirths so little. They covered my entire hospital stay and c-section* so I'm not sure why they wouldn't be happy to pay 1/10 of that cost for a midwife.
I know there are a lot of people who can't come up with a midwife's fees on their own, but many accept payments and Medicaid can be there as a back up if a hospital transfer is needed.
*I guess I don't know exactly how much was reimbursed, but I'll bet it was more than a midwife's fees.
Yup,If I had had my baby at a hospital, my out-of-pocket would have been $6,700. Instead, I had a PERFECT homebirth, which I LOVED. And my midwife only charged me $2,000.
ReplyDeleteThe whole system is just a joke.
Unbelievable, but I do believe it. My one hospital birth (with insurance) cost me about $150. My homebirths have cost me (out of pocket) $2500, and 2X $3400. It's difficult, but we'll do it every time to avoid the problems inherent in hospital birthing for me!
ReplyDeleteIt is kind of a vicious cycle. Woman can't afford a hospital birth because it is too expensive so they get on Medicaid. The hospital raises their costs because Medicaid pays them too little. When 50% of patients are on Medicaid it says something about the state of our healthcare system. I wish I did not have to use Medicaid but when I had chosen to pay out of pocket in the past it almost ruined us financially. I spent 2 years paying off an ambulance bill and a few hour stay in the ER. I can't afford to take that risk again and insurance is way too costly for us right now. Even with Medicaid we still cannot afford the copayment for my husband to see a doctor.
ReplyDeleteWe are currently on Medicaid and although I wish we weren't, it is how it has to be in this moment. We have homebirths, however, and pay out of pocket. My midwife has a rate for low-income people and also barters, which makes it possible for us (I am so grateful she makes it possible). However, here in Arizona, Medicaid does not cover midwives - whether in a hospital or at home. The only choice is to see an OB.
ReplyDeleteHow in the name of everlovin' goodness can a hospital honestly charge $22,000 for an uncomplicated vaginal delivery?
ReplyDeleteI'm shocked. Seriously? What's the point of having insurance at that point? Go with a midwife. Ours charges $2,200 for all the prenatal care and the delivery. $750 facility fee to birth in her birthing center, no additional charge for homebirths.
You'd think insurances would be hopping all over the out-of-hospital birth bandwagon. It's so much cheaper for them. Even if you don't have insurance, midwives are usually much, much cheaper. Not to mention that the quality of care, at least with ours, has been exceptional.
I currently live in Utah, and there are a lot of Medicaid abusers here. We have a lot of young married college students here that will go on Medicaid, when they have parents who pay their tuition, and then some. They see it as "free health care!" It's infuriating because there is a HUGE waiting list for Medicaid as a result and it's making health care that much more expensive because of it. My husband and I probably could go on Medicaid, but I would feel dishonest doing it because my family is paying for his schooling. I want to let someone else who REALLY needs it have it.
ReplyDeleteThe midwife I wanted to have with my second child, who turned out breech and had to have a c-section for lack of Docs and midwives willing to deliver a vag-breech, had a fee of $2,500 and my ins, Blue cross, would pay for her so I would have only had to pay co-pays and deductable!
ReplyDeleteMy section on the other hand was to the tune of $48Large!!!
With my third baby, a breech as well, the external version was $9,000! My ins paid all but $72 of the ECV! We had already meet our deductable with midwife visits throught the pregnancy! Thankfully it worked so I could VBAC, but I would have GLADLY paid every penny myself than have another c-section! But instead of being able to have my first VBAC at home I had to do it in the hospital and it was close to $22,000 with another $15,000 for the baby! And we were only there 24 hours!! It amazesme how much hospitals think they can charge!
With this healthcare crisis one would think the insurance companies, Medicaid, and lawmakers would be bending over backwards for midwives and pushing homebirths!
Good grief! I'm SO glad I life in Canada-that is absolutely ridiculous. What a stupid system, no wonder outcomes are worse in the US.
ReplyDeleteWow makes me glad I live in Australia. I have had two hospital births and with both the only costs I have paid are for the tv in my room.
ReplyDelete@ kami ... I have several friends in Arizona who were on Medicaid when they had their babies, and Medicaid covered midwives at a free-standing birth center. My friends didn't pay anything. It also would have covered CNM-attended hospital births.
ReplyDeleteThe birth center where I had my second baby (in Colorado) just stopped taking Medicaid, which is sad. They do payment plans - sometimes very generous ones - for self-pay clients, and I understand they can't work at a loss, but it's still sad.
I have pretty crappy insurance, and I paid $1,300 for that birth center birth. I would have paid only a few hundred more for a hospital birth - even a c-section - because almost all of that was deductible.
However, my insurance had a total exclusion for home birth. The midwife I interviewed said we could try billing prenatal separately, but even in that best case scenario, I would have been looking at $2,500 out of pocket, possibly up to $4,000, and none of that would count toward my deductible if I ended up transferring - so maybe up to $6,000.
This last baby wasn't planned and came during a very financially trying time for us. I just couldn't justify the extra cost. It would have crippled us. But I really don't get why insurance doesn't want to cover homebirths. On a population level, it would save them a lot of money. In some ways, it's surprising they don't require evidence of a medical condition to cover hospital birth!
It is pretty crazy, though, to contrast what insurance pays with what hospitals bill. If I hadn't had insurance, my first hospital birth - vaginal, CNM, no epidural, no complications with the baby, less than 24 hour postpartum stay - would have cost $15,000 (5 years ago - so less than it would be today). My insurance only paid $3,500, and I only paid around $800. They charged $1,500 "room and board" for an entirely breast-fed baby who stayed in my room!
See, this is why Canada rocks!! $22,000 for a birth??? The only cost here is $50 for a private room - and most people have insurance that covers that, so they walk out having only paid for their parking... How can a society work if having a baby ruins you financially? That is so insane.
ReplyDeleteAnd, seriously, does anyone have an answer about why insurance won't pay for midwives/homebirths? I mean, for an industry based on costs, that makes less than no sense. It is really that no one at the insurance companies has thought of this????
according to this chart: www.mana.org/state chart.html, AZ is one of the few states where licensed midwives can get medicaid reimbursement...is the chart incorrect?
ReplyDeleteMy husband is an entry-level hospital administrator. His hospital stopped doing L&D before he started working there. Apparently, corporate has decided providing maternity care at their hospitals is not worth it--not enough income and too much liability risk.
DH has explained to me that the reason hospitals bill high is that all insurance companies negotiate, and they always expect the insurance to low-ball, so they set the asking price higher to give more room for negotiation. Hospitals can't continue providing care if they aren't getting enough money in to cover all of their expenses. Under the current system, government insurance is seriously underpaying hospitals, and I fail to understand how expanding government insurance while still having things paid for the same way is supposed to help anything.
The reason insurance and medicaid don't pay for home birth is because what they cover is partially determined by the "professional" advice of people like ACOG, who tell them it is "alternative" and not safe. Home birth midwifery is not integrated into the system very well in most areas of the U.S. (some are more forward-thinking than others in this respect).
"Under the current system, government insurance is seriously underpaying hospitals..." Or the hospitals, et al, are seriously overcharging for their services. If a midwife can attend births at home or in a birth center for a fraction of the cost*, I question why the hospitals charge so much.
ReplyDelete*I appreciate that many midwives do what they do because they have a passion for giving care to women and earn very modest incomes. But, even taking into consideration OBs who earn more money, the cost of hospital births are astronomical.
This isn't something that I like talking about - but it's important.
ReplyDeleteFor years we've been in a position to have insurance. The last couple years of unemployment and now part-time employment, we've been on medicaid. I just finished a pregnancy/birth, and I didn't want to tax the system and always wanted a homebirth. So I paid $3000 OOP for midwifery care and homebirth (additional costs for birth supplies) and signed up for medicaid just in case I needed to transfer in labor. I had no reason to suspect that I would - I've had two completely natural births in a hospital before, I don't want to be in a hospital (1:3 chance of a c-section... my time is UP!).
Perfect pregnancy, contractions started, water broke... and contractions got wonky. After 48 hours of weird labor patterns (the last 4-5+ hours were transition like contractions one on top of the other) - I transferred. I don't regret that decision - it was what I needed to do (and it still look over 4 hours to dilate the last .5 cm with pit and an epidural). I don't regret the money that was spent on midwifery care, even though that was HARD for us to pull together. I *do* regret how poorly reimbursed the hospital will be - especially for all the extra tests that were run on my poor daughter because of length of ruptured membranes (51 hours at birth) and because she was part of what I'm sarcastically calling a "dirty, dirty homebirth." I don't go to the doctor unless it's absolutely necessary - I'm a big believer in preventative nutrition and supplements. I can't even imagine what this trip costs (for real), what it would have been charged to private insurance companies, and what medicaid will actually pay.
This *was* our closest hospital - and it was still about 25 minutes away. I can't even imagine how much further we'd have to travel in the event of a life threatening emergency.
MamaOnABudget, I just want to say I understand where you are coming from. I got pregnant when we didn't have insurance, paid for our midwife completely out of pocket and signed up for medicaid just in case. I also needed to transfer and ultimately have a c-section. So, I get it, and I don't think we need to feel bad about it.
ReplyDeleteCrazy. Truely crazy. I know hospitals are expensive places to run, but really, how can it cost that much for 24 hour stay? (I know there's some answers in the comments).
ReplyDeleteDon't hospitals realize that natural, vaginal births are cheaper?
Also, I don't get why your midwife "cannot require patients to cover teh rest of her gloval fee". Is that some sort of law? You can't go to a car repairman and say "I"m on unemployment so you can't charge me the full amount". I wouldn't accept services from a professional and assume that they shouldn't get paid for their job just because I'm on Medicaid...do other medical fields do this too? Wouldn't having some sort of repayment plan be better than eating the cost?
TrackKM--it's a law that you can't charge Medicaid patients extra if you're a contracted Medicaid provider.
ReplyDeleteWow, that's sad. The most I ever paid out of pocket for a hospital birth was $1000. I personally am GLAD I live in the USA, if I lived somewhere else with higher taxes I would have to work...with our lower taxes here in the state of Texas, our family is able to live very well on one income:) I'll gladly pay a small out of pocket fee in order to stay home with my kiddos:)
ReplyDeleteHospitals have to pay a lot more expenses than homebirth midwives do--they have housekeepers, nurses, anesthesiologists, electric bills, laundry services, food service people, etc. to pay. Just because an uncomplicated vaginal birth CAN cost $3000 at home, that does not mean all uncomplicated vaginal births in all settings SHOULD cost $3000. Do I think insurance companies and medicaid would save a lot of money by covering homebirths? Absolutely. Do I think that is motivation enough for all of them to do it when the "medical experts" are telling them not to? No.
ReplyDeleteNicole-Even in Canada, the birth *costs* more than $50. You just aren't charged for it. Someone pays for it. The taxpayers of Canada pay for it. And Canada is not finding it easy to go on financing its medical system. In the US, if you have insurance and need an arthroscopic knee surgery, you see the orthopedist, he writes up a justification for an MRI, you have the MRI and the insurance company gets a copy, and within three weeks of the first visit to your primary care doc, you can have your knee surgery. My husband missed 5 weeks of work for his surgery. He couldn't work with his knee the way it was as his job involves physical labor. He had that much sick time saved up. But in Canada, there are waiting lists for arthroscopic surgeries and knee replacements and hip replacements-and many other "elective" procedures. He might have been unable to work for half a year or more...thus paying less in taxes to fund the system! Canadians who don't want to wait and who can afford it, come to the US to have these surgeries. Those who can't afford to do that-wait. Everything has to be paid for one way or another.
ReplyDeleteSusan Peterson
Thanks Rixa for the explanation. That's a truely stupid law.
ReplyDeleteI know that a hopsital birth wouldn't cost $3500 like a homebirth, but does anyone know what an uncomplicated birth "should" cost? I just find it hard to believe that if a hospital delivers 500 babies/year, that it really costs $12 500 000 to operate just that department. This is probably the biggest reason I feel healthcare should not be a profit-driven business. You all deserve healthcare, not just the ones who can pay for it (I'd rather wait for a surgery here in Canada, than go bankrupt to have it, or just not be able to due to no money).
TracyKM, no hospials don't need $12,500,000 to do 500 babies/year, but the reality is that they don't actually get paid that. As I explained in my first comment, the amount billed is actually never the amount paid. With medicaid patients, the amount paid is always very low, so private insurance has to pay more to make up for the money lost on medicaid patients. I don't believe that everyone "deserves" free healthcare any more than I believe everyone "deserves" free groceries (we need to eat to live, right?) Health insurance is something that if people believe is important to have, they will budget for it. If they truly can't afford it, we have medicaid for that. People who choose not to have insurance are taking a risk that they will have to pay for medical expenses that come up themselves, whereas those who have insurance are paying the insurance carrier to take on that risk.
ReplyDelete@ TracyKM ... It's not a stupid law. If Medicaid providers could charge clients above and beyond the Medicaid reimbursement, it would totally defeat the purpose of Medicaid. What if a woman on Medicaid has a medically necessary emergency c-section and her baby spends a month in the NICU? If they could, the hospital would bill the family the tens or even hundreds of thousands of dollars extra that costs. This to a family that is already indigent and has a new child to care for.
ReplyDeleteThey can't make an exception just for homebirth midwives to charge whatever they want, while preventing hospitals from doing it.
What they should do is increase the reimbursement to midwives.
TracyKm, It did cost that much for my third birth. It was an un-medicated delivery and I was only in the hospital for 7 mins before the baby was born! Crazy I know! My CMN didn't make it, heck we almost didn't make it to the hospital, LOL. After the birth the baby had some retractions and they conned me into letting her go to the nursery, not even the NICU, with my husband, whom I swear is retarded, and he gave permission for them to X-ray her! UUUGH after I said NO 500 times! Come on X-ray my 2 hour old baby for very minor retractions! Then she was in room and I never let her out of my sight the 24 hours following. I felt like a momma loin fiercely gaurding her cub from the hospital staff! Our ins did get the bill adjusted and I am sure they didn't pay all of that $22,000. But I only had to pay a fraction with my ins. I would rather pay that any day than have socialized medacine! And I would NEVER live ANYWHERE but the USA! VIVA LA USA!( I do like Canada by the way, It would be my second choice! LOL)
ReplyDeleteAnd everyone gets health care, The hospital I delivered at writes off tons of no-insured bills with their charity assistance. I had a friend with cancer and she had med bills in the $100,000's and what ever her ins didn't pay and she couldn't pay she was able to get written off! I am a stay at home mom and we only pay $135 bi-weekly for a fam of 6 for our ins and it covers a ton!, verses a friend in Belgium who pays 47% of their TOTAL income! Yup I would say USA is lookin pretty good!
"If Medicaid providers could charge clients above and beyond the Medicaid reimbursement, it would totally defeat the purpose of Medicaid"
ReplyDeleteBut why shouldn't Medicaid pay what it actually cost for a medical event? Isn't that the point of Medicaid? Does Medicaid actually think a homebirth/pregnancy can happen for $700?I don't expect providers to charge above what a birth should cost, but they should be able to cover their costs and not lose money bringing new people into the world. That's what doesn't make sense to me. If it costs $3500 for a homebirth, then Medicaid should pay for that, rather than $22000 bill for the same birth in a hospital.
And if "everyone gets health care, The hospital I delivered at writes off tons of no-insured bills with their charity assistance" then why is health/illness the number one cause of bankruptcy in the US? By writing it off, it makes it more expensive for everyone else. If they have to write off a $22000 birth, wouldn't it make more sense to just cover a $3000 birth to begin with?
It seems sad that there are hospital executives with big salaries and bonuses while midwives have to turn down the poorest people.
I don't think people should get free groceries, LOL, but I just think if there's a system in place to pay for medical bills of the poorest people, then it should do so reasonably.
Ladies, you have to understand how FEW Medicaid patients are healthy, involved mothers dedicated to the welfare of their children. The reason 50% of these patients are on Medicaid in the first place is because, with very few exceptions, they are young and unmarried. When 50% of babies are born out of wedlock, 75% in some communities, we don't just have a crisis of healthcare coverage or payments, we have a crisis of American families (or the lack thereof!)
ReplyDeletePattie, RN