The closure of a maternity ward in Baker City, Oregon, serves as a stark warning for rural healthcare access across the state and nation, with impending Medicaid cuts threatening to exacerbate a growing crisis. Saint Alphonsus Medical Center in Baker City ceased its obstetrics services in August 2023, forcing expectant mothers in Baker County to travel an hour or more to reach the nearest hospital for childbirth care. This event is emblematic of a broader trend impacting rural communities, where financial pressures and shrinking reimbursements are leading to the decimation of essential services, particularly maternity care.
The Desertification of Rural Maternity Care
The loss of maternity services in Baker City is not an isolated incident but part of a national pattern. Across the United States, rural hospitals have been steadily closing their obstetric units. A study by the University of Minnesota found that by 2022, a majority of rural U.S. hospitals (52%) no longer offered maternity care, a significant increase from previous years. This decline disproportionately affects the most remote areas, contributing to the creation of “maternity care deserts” – counties where access to obstetric services is severely limited or nonexistent. For residents of Baker County, the closure means a desperate scramble for care, with some women forced to give birth during long-distance drives or face significant delays. This has raised alarms about increased risks of complications, preterm births, and higher maternal and infant mortality rates, especially in areas already facing health disparities.
Financial Pressures and the Medicaid Squeeze
Rural hospitals, like many across Oregon, operate on razor-thin margins. Maternity services, in particular, are often not profitable. Contributing factors include declining birth rates, rising costs for staffing and supplies, and critically, inadequate reimbursement rates from government payers like Medicaid. In Oregon, Medicaid reimbursement for childbirth care can be significantly lower than the actual cost of providing that care, covering only about 56 cents for every dollar spent, according to the Hospital Association of Oregon. For rural hospitals, which tend to have a higher proportion of Medicaid-covered patients, this financial strain is particularly acute.
“Most hospitals lose money on maternity services already,” said Jeremy Davis, CEO of Grande Ronde Hospital in La Grande, which has absorbed some of the patient overflow from Baker City. “It’s just going to put further pressure on hospitals on whether they can continue to retain some of these essential services.”
Looming Medicaid Cuts Threaten a Fragile System
The threat of substantial cuts to Medicaid funding, particularly those stemming from federal legislation like the “One Big Beautiful Bill” (H.R. 1), looms large over the future of rural healthcare in Oregon. Estimates suggest these cuts could reduce federal funding to Oregon’s Medicaid program by billions of dollars over the next decade. With nearly half of all births in Oregon covered by Medicaid, hospital administrators fear these reductions could be catastrophic. Such financial blows could force more rural hospitals, already struggling to maintain essential services, to re-evaluate their offerings, potentially leading to further closures of maternity wards and other critical care units.
This potential funding shortfall is compounded by the fact that rural hospitals often cannot offset losses from maternity care with profits from other services, as many are already operating at a deficit. Reports indicate that almost half of Oregon’s rural hospitals are currently operating in the red, making them highly vulnerable to any reduction in revenue.
Beyond Baker City: A Statewide Concern
The challenges faced by Baker City are mirrored in other rural parts of Oregon. U.S. Senators Ron Wyden and Jeff Merkley have identified several other rural hospitals in Oregon, including those in Silverton, Seaside, Madras, and Hermiston, as being at high risk of closure or service reduction due to financial instability and anticipated Medicaid cuts. Providence Seaside Hospital, for instance, announced plans to close its labor and delivery unit in the fall of 2025 due to rising costs and a decline in births. Grant County’s only hospital recently cited potential Medicaid cuts as a reason for workforce layoffs.
Legislative efforts are underway to address aspects of this crisis. Oregon has seen bills like SB 1214 aimed at boosting Medicaid reimbursement rates for rural hospitals. Furthermore, federal programs like the Rural Health Transformation Program (RHTP) aim to provide states with funding for strategic health system improvements, with Oregon expecting to receive significant annual allocations to address rural healthcare needs.
A Call for Sustainable Solutions
As rural hospitals grapple with these multifaceted challenges, the focus is shifting towards finding sustainable solutions. This includes exploring innovative models like freestanding birth centers, enhancing telemedicine capabilities, and advocating for more equitable reimbursement policies from both government and private insurers. However, without robust financial support and a commitment to preserving essential services, the trend of rural maternity ward closures is likely to continue, jeopardizing the health and well-being of countless families in underserved communities across Oregon and beyond. The experiences in Baker City underscore the urgent need for comprehensive policy interventions to safeguard rural healthcare access before more communities face similar critical losses.
