Rural Hospitals End Birthing Services After Many Mergers

American birth rates have been falling precipitously since 2007, reaching a historic low of 1.6 births per woman last year.  Hospitals everywhere are losing money on their underutilized birthing departments, but the financial pain is especially acute in rural hospitals.  Aspirus Health just closed their Ironwood Hospital birthing center despite being offered $ 1.2 million in state funds to keep it open.  No merger was involved:

https://michiganadvance.com/2025/09/15/repub/rural-hospitals-often-scrap-labor-and-delivery-services-after-mergers-study-finds/

Rural hospitals often scrap labor and delivery services after mergers, study finds
By Anna Claire Vollers - September 15, 2025

Rural hospitals are less likely to offer obstetric services after they’ve been acquired by a larger health system, leading to mixed outcomes for mothers and babies, according to new research.

It’s part of an accelerating trend that’s reshaped how Americans get health care: Larger health systems gobble up smaller facilities in a bid for financial stability.

“The hospital industry has undergone tremendous transformation over the past few decades, with nearly 1,600 mergers between 1998 and 2021,” said Martin Gaynor, a coauthor of the study and emeritus professor of economics and public policy at Carnegie Mellon, in a statement.

Those large-scale changes to the health system can affect costs, quality and access to care, he said.

Over the past five years, more than 100 rural hospitals have stopped delivering babies or announced they’ll stop in 2025, according to the most recent data from the Center for Healthcare Quality & Payment Reform. Less than half of rural hospitals still offer labor and delivery services.

Gaynor and a team of researchers from Carnegie Mellon, Northwestern University and the University of Georgia examined how hospital mergers have affected access to obstetric care in rural areas, and the quality of that care. They found that rural hospitals were part of more than 450 mergers from 2006-2019.

Once those rural hospitals were acquired by larger systems, they were 30% less likely to still offer labor and delivery services five years later. Many of the shuttered obstetric departments were the sole local source of obstetric care.

That loss translated to fewer resources — such as practicing OB-GYNs — in the county where the acquired hospital was located, researchers found.

The number of births in those counties didn’t change; families just had to go elsewhere for care.

Less access to nearby care could explain those counties’ small increases in health problems among women during or after pregnancy and child birth, and higher rates of smoking among pregnant women, researchers said.

On the flip side, they found that some patients went to higher-quality facilities farther away. And in rural hospitals that didn’t close their obstetric departments following a merger, the quality of care tended to rise.

In recent years, officials in dozens of states have championed laws to increase oversight of mergers and other health care dealmaking.

In the wake of devastating hospital closures tied to corporate financial maneuvering, some states have strengthened their antitrust laws.

Last year alone, 22 states enacted at least 34 laws related to health system consolidation and competition, according to the National Conference of State Legislatures, an advisory think tank for lawmakers. Other states, meanwhile, have paved the way for health mergers in a bid to save failing rural hospitals.

At least 35 states now require hospitals, health systems, providers and private equity firms to notify a state official of proposed mergers or other contracts.

Earlier this month, California lawmakers passed a bill to expand the state’s authority in overseeing mergers and acquisitions in health care. It’s headed to Democratic Gov. Gavin Newsom’s desk, though Newsom vetoed a similar measure last year.

At the federal level, President Donald Trump’s administration has not signaled an interest in increasing antitrust oversight. But Trump’s recent tax and spending law did include $50 billion in funding over the next decade aimed at helping states strengthen rural health care. Massive cuts to Medicaid also in the law could have devastating impacts on rural hospitals struggling to stay afloat, however.

The Centers for Medicare & Medicaid Services this week announced that states have until Nov. 5 to apply for rural health funding. States must show that they’ll use the federal dollars in a way that aligns with certain CMS goals, including helping improve access to care and strengthening retention of health care workers.