In Vermont, state officials and hospital leaders are under enormous pressure to reduce health care costs as fast as possible. By law, they need to cut over $100 million in hospital spending next year. They’ve set a goal of cutting costs by twice that amount before the year’s end, in a desperate attempt to bring down ballooning health insurance premiums.
So when Copley Hospital in Morrisville recently announced a plan to close its labor and delivery unit by November, leaders at the Agency of Human Services said they support the decision, and that it's the beginning of more changes to come.
“That's a decision by the board, and yet it is consistent with the direction that we are going,” Secretary Jenney Samuelson said in a phone interview. “We are going to see other hospitals have to make very difficult decisions.”
Their support places the agency in an awkward position as it purports to ensure affordable, high quality care remains available across the state.
Copley is the only place in Lamoille County where families can give birth, and at it's least 45 minutes from the next closest hospital. Between 150 and 210 babies have been born there each year for the past decade.
It's well established that closures of childbirth units in rural counties nationwide have led to worse outcomes for mothers and infants, including an increase in emergency room and preterm births, as well as negative long-term impacts on the local economy.
More: Concerns grow as Copley Hospital set to vote on fate of birthing center
In a letter to the hospital board, leaders of a regional initiative focused on improving outcomes for mothers and infants based at Dartmouth Health said the center “consistently meets or exceeds state and regional quality metrics.” They warn that pregnant patients will continue to seek urgent care in the emergency department, leading to “potentially dangerous situations.”
I view Copley as a harbinger of things to come, in the sense that all of us are going to have to wrestle with trade-offs.Michael Costa, president of Gifford Medical Center
And while the Agency of Human Services has framed their support for the closure around affordability, Copley Hospital has some of the lowest commercial prices in the state, according to a national hospital transparency study. The model of care at Copley, where midwives are the attendants for the majority of births, has also been shown to reduce overall health care costs.
Regardless, closing the unit will save Copley millions of dollars a year, which state officials say will ultimately translate to lower health insurance premiums. Most directly, it will improve the hospital’s finances, even at the cost of access to care. It’s a reality many hospital leaders acknowledge.
“I view Copley as a harbinger of things to come, in the sense that all of us are going to have to wrestle with trade-offs,” said Michael Costa, the president of Gifford Medical Center.
Hundreds of hospitals across the country have closed childbirth units in recent years, including at Springfield Hospital in Vermont. Their unit closed in 2019, in the months before the hospital declared bankruptcy. Experts say continued closures at rural hospitals shouldn’t be surprising because of the current policies around financing for maternity care.
“Reimbursement rates generally for labor and delivery are below cost. They're low across the board,” said Katy Backes Kozhimannil, a professor at the University of Minnesota and co-director of the Rural Health Research Center. “It's an impossible math problem.”
Other hospitals stand by obstetric care
Other rural hospitals in the state with similar or fewer births than Copley have said they will keep their labor and delivery services open, even as some face negative operating margins or limited cash.
“We’re not going anywhere,” said Tom Frank, the CEO of North Country Hospital in Newport, where 70% of patients have coverage from Medicare or Medicaid. “Come hell or high water, we're going to continue to provide that service.”
In recent years, the Newport hospital has lost several specialty services including pulmonology, neurology and urology as providers have left and the hospital has opted not to replace them. Frank said they’re not planning to close any more patient services.
Come hell or high water, we're going to continue to provide that service.Tom Frank, president of North Country Hospital
Instead, the hospital is making other changes to reduce costs — they’re sharing a pharmacy director with Northeastern Vermont Regional Hospital in St. Johnsbury, and recently opened a sleep clinic that both hospitals own.
"We're working very, very closely together on how we can do more things as sort of a Northeast Kingdom health system than individual hospitals," Frank said.
At Gifford Medical Center in Randolph, President and CEO Michael Costa said the hospital is committed to maintaining and growing the birthing center, “but it's an enormous financial challenge.”
Last year, the hospital ended their chiropractic and urogynecology services. They have no plans to cut additional patient services in the next year, but will continue to reassess.
“I think every Vermont health care organization, including Gifford, is going to have to go through that exercise on a year by year basis,” Costa said.
They’re experimenting with other ways to bolster revenue, like accepting transfers from larger hospitals like Dartmouth Hitchcock Medical Center when those hospitals are full. So far, the strategy “to be a pressure release valve” has worked — the number of patients admitted at Gifford has grown by 50% in the last six months, according to Costa.
Obstetrical care is the one thing that every human uses at least once in their life — if that's not essential care, I don't know what is.April Vanderveer, president, Vermont chapter of the American College of Nurse-Midwives
Eventually though, he said the payment model needs to change, so hospitals are provided a set amount to take care of their community, rather than a “fee-for-service” model, providing payment for individual office visits, tests and procedures.
“Maintaining and strengthening our commitment to women's health and the birthing center is, in part, a bet that after many, many years in fee-for-service, that insurance companies and government payers are going to get this right,” Costa said.
A wake up call
Until then, providers worry about the future of maternal health care in Vermont and other basic community services as the state scrambles to cut spending as fast as possible.
“I think this should be a wake up call to the state and our legislators and our health care reformers,” said April Vanderveer, president of the state chapter of the American College of Nurse-Midwives.
“Obstetrical care is the one thing that every human uses at least once in their life — if that's not essential care, I don't know what is,” she said.
“If we lose whole counties that provide that care, what are we doing as a state?"
