Less than half of rural hospitals in the U.S. still offer labor and delivery services, and researchers warn the situation will worsen unless commercial payers, Medicaid programs and employers change how they pay for maternity care.
A June 8 report from the Center for Healthcare Quality and Payment Reform found 139 rural labor and delivery units have closed or announced closures since 2020, with nearly 100 more at financial risk. The report lays out a crisis driven by chronic underpayment and worsening workforce shortages, and calls for immediate action from federal and state officials, private employers and health plans.
Five things to know:
1. Rural labor and delivery closures have accelerated. Since the end of 2020, 139 rural hospitals have stopped delivering babies or announced plans to do so before the end of 2026, representing a 13% decrease in rural labor and delivery units. Rural obstetric units have closed in most states over the past five years, averaging more than two closures per month, according to the report. In six states, at least one-quarter of rural maternity hospitals stopped delivering babies during that period.
2. Most rural hospitals no longer provide maternity care. Only 41% of rural hospitals still offer labor and delivery services. In 12 states, fewer than one-third do. The report frames this as a fundamental structural shift: in much of the country, local maternity care has effectively ceased to exist as a default hospital service, not a gap in an otherwise intact system.
3. Distance is creating life-threatening risk. In most urban areas, travel time to a hospital with labor and delivery services is under 20 minutes. In rural areas, patients whose closest hospital no longer delivers babies may need to travel at least 30 minutes, and often 50 minutes or more. Researchers argue that communities without local maternity services face higher risks of complications and death for both mothers and newborns, and that women are less likely to receive adequate prenatal and postpartum care when services are not available locally.
The broader mortality context is stark. The U.S. already has one of the highest rates of maternal and infant death among advanced economies. Black women are two to three times as likely to die from pregnancy-related causes as other racial and ethnic groups, according to the report. Authors of the report estimate that more than 80% of pregnancy-related deaths are preventable with appropriate prenatal, labor and delivery, and postpartum care.
4. 99 more rural maternity units are at financial risk. The report identified 99 rural hospitals that still provide labor and delivery services but lost money overall in both of the two most recent years available. Those hospitals could be forced to close their maternity units to survive. In eight states, at least one-fifth of rural maternity care hospitals are in that situation.
5. Payment failures are a bigger driver than commonly understood. Safe maternity care requires physicians capable of performing cesarean sections, obstetric nurses, midwives and anesthesia support, all available around the clock. The fixed cost of maintaining that staffing is the same whether a rural hospital delivers 50 babies a year or 500, and payments rarely reflect that reality.
The report challenges the common assumption that low Medicaid rates are the primary cause of hospital losses on maternity care. Commercial payers, including Medicare Advantage plans, are paying rural hospitals less than the cost of delivering care, according to the report. More than 40% of births in rural communities are covered by private health plans, meaning inadequate commercial rates are a direct contributor to the financial unraveling of rural maternity care.
Researchers have recommended a two-part payment model: standby capacity payments, which would compensate hospitals monthly for maintaining round-the-clock staffing regardless of birth volume, paired with smaller delivery fees tied to individual births. It also calls on employers to require their health plans to demonstrate adequate payment for rural maternity services, and on states to impose the same requirement on Medicaid managed care plans.
Click here to access the full report.
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