Two rural Minnesota labor wards are on the brink of closure

New Prague Clinic
Mayo Clinic in New Prague is one of two hospitals so far this month to announce a closure of its delivery ward.
Jackson Forderer for MPR News 2012

Updated: 4:31 p.m.

There’s a public hearing Tuesday evening in Fosston, in northwest Minnesota, on a decision to stop delivering babies at the hospital in town.

It is the second hospital this month to announce a closure of its delivery ward. Mayo Clinic in New Prague also said it intends to close its ward.

That means pregnant people in Fosston and New Prague will have to travel longer distances to find an obstetric unit that delivers babies.

MPR News host Cathy Wurzer spoke with Fosston’s mayor, Jim Offerdahl. Offerdahl said that city officials, community members and doctors alike are upset about the decision from the organization that runs the hospital, Essentia. He argued Essentia breached their agreement with the town.

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Katy Backes Kozhimannil, a professor at U of M’s school of public health, also joined Minnesota Now to talk about what it might mean for those two rural birth wards to be at risk of closing soon.

Essentia sent MPR News the following statement:

“Due to a pending dispute with the City about the terms of the affiliation agreement, Essentia will not comment on matters that will be resolved through an arbitration process.

Decreasing birth volumes, the growth in high-risk pregnancies and challenges recruiting providers have resulted in Essentia Health-Fosston relocating labor and delivery care. We remain committed to providing high-quality obstetric care and continue to offer excellent access for women locally, with expert prenatal and postpartum services available in Fosston. We work closely with our patients to ensure a seamless delivery plan at Essentia Health St. Mary’s-Detroit Lakes.

We appreciate the opportunity to further explain this transition during the public hearing. We recognize that members of the community have questions about this change, and we look forward to providing additional information. Our highest priority is the safety and well-being of the patients we’re privileged to serve, and this increasingly common model of shared maternity services provides the safest care possible to our moms and newborns.”

Use the audio player above to listen to the full conversation. 

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Audio transcript

CATHY WURZER: There's a public hearing tonight in Fosston, Minnesota, which is in the Northwestern part of the state, on a decision to stop delivering babies at the hospital in town. It's the second Minnesota hospital this month to announce a closure of its delivery ward. The Mayo Clinic Hospital in New Prague also intends to close its ward.

That means that pregnant people in Fosston and New Prague will have to travel unprecedented distances to find an obstetric unit that delivers babies. Earlier today, I spoke with the mayor of Fosston, Jim Offerdahl. He said that city officials, community members, and doctors alike are upset about the decision from the organization that runs the hospital, Essentia Health, based in Duluth. He argued that Essentia breached its agreement with the town. I started asking the mayor how important the hospital is to Fosston and surrounding towns.

JIM OFFERDAHL: Well, first of all, certainly from a health care standpoint, I don't think there's probably anything more important than having a strong, viable hospital for health care. Fosston is about 40 miles from the nearest hospital that delivers babies, which is Sanfords Hospital in Bemidji. So it's important from a geographic standpoint also.

Surrounding communities utilize the hospital in Fosston. From an economic standpoint, it's extremely important. It's our largest employer in the city.

CATHY WURZER: What might the effects be of closing down the labor and delivery unit at the Fosston Hospital?

JIM OFFERDAHL: From a health care standpoint, it means that moms would have to drive to Detroit Lakes. That's the current plan of what Essentia calls a shared care model. And what that means to the moms and the dads that are going to be driving them is about an hour and 15 minute drive. And, unfortunately, that drive is on two-lane narrow highways. And often, in the dark of night and 20 below weather icy roads, that's not a safe thing.

CATHY WURZER: Essentia told us, Mr. Mayor, that they're having a tough time staffing the unit. There aren't as many babies being born in your area. And what's your response to that?

JIM OFFERDAHL: CEO Dr. David Herman and his entire team has told us all along, this is not about money. However, we've always believed that it is about money and not about the safety and well-being of the moms. We disagree with them on the fact that they're having difficulty hiring.

We also have and confronted them with evidence that we know that they have not made a good faith effort to hire. In fact, a doctor that was hired and received a signing bonus from a foundation that supports our hospital locally declined to take the job, returned his cash signing bonus after an Essentia executive informed that doctor, prior to their discontinuing deliveries, that that doctor would not have a viable OB practice in Fosston.

CATHY WURZER: So what's the next step here? Is the city prepared to take this as far as it has to? Can you find another operator of the hospital?

JIM OFFERDAHL: The operator of the hospital certainly can be, again, what it was prior to the affiliation in 2009. And that's First Care Medical Services. First Care Medical Services employed the entire staff and operated the hospital as a 501(c)(3) beginning in 1993.

CATHY WURZER: So it could be possible to go back to First Care. Say, I'm wondering, what are you hearing from the community, if I could ask?

JIM OFFERDAHL: Well, the community is very much behind the effort. We're driven by the community's feelings on this issue. So the next step, we're in a legal dispute. We have a very unique agreement with Essentia. In fact, they forgot that they had this agreement with us.

President of the First Care Medical Service board of directors presented them with the agreement when it was disclosed that they might be shutting down OB delivery. And it's spelled out in the agreement specifically as a core service that says that they will provide primary hospital OB services. The only hospital OB service that's provided is delivering babies.

We are now in a legal dispute. We went through mediation, which ended in an impasse. And when that's complete, the city of Fosston has the right to terminate the agreement with Essentia. And that's what we will do.

CATHY WURZER: All right. Mr. Mayor, I appreciate your time. Thank you so much.

JIM OFFERDAHL: You are very welcome, Cathy. Thank you, too.

CATHY WURZER: That was Fosston, Minnesota mayor Jim Offerdahl. And due to a pending dispute with the city about the terms of the affiliation agreement, Essentia says it won't comment on an issue that could be resolved through an arbitration process. We'll have their full statement on our website.

We're going to turn right now to Katy Backes Kozhimannil, cusimano a professor at the U of M's School of Public Health. She's here to talk about what it might mean for those two rural birth wards, the one in Fosston and New Prague, to be at the risk of closing soon. Welcome, professor. You with us, professor?

KATY BACKES KOZHIMANNIL: Hi there. Yes, Cathy.

CATHY WURZER: Thank you.

KATY BACKES KOZHIMANNIL: It's nice to see you today.

CATHY WURZER: Thank you for taking the time to talk with us. We appreciate it. Let's talk a little bit about what we heard from the Fosston mayor. Essentia has said lower birth rates, increases in high risk pregnancies, staffing shortages have led to the decision to close the birthing unit in Fosston. Are delivery units like the one in Fosston a money loser for health care providers like Essentia?

KATY BACKES KOZHIMANNIL: On average, yes, they are. And the statement that you that you cited is similar to what other hospital administrators have discussed. At the Rural Health Research Center, we've been conducting research on rural maternity care for over a decade now. And one of the things that we've done is to talk with rural hospital administrators about offering labor and delivery services and understanding the decisions to keep a unit operating or when they need to close a unit. And certainly, what we hear from them are sort of three themes.

One is financial viability. One is workforce shortages. And the other is clinical safety. And those are three major concerns that come up.

CATHY WURZER: So now, apparently, we'll see what happens in Fosston, but there's the possibility that those in Fosston and the surrounding towns might have to travel 45 minutes to Crookston or to Bemidji to find an obstetric unit that delivers babies. The mayor kind of pointed out some of the potential risks. But from where you stand, what are some of the risks of taking a longer time to drive to a hospital?

KATY BACKES KOZHIMANNIL: That is such an important question. And it's one that resonates for me. My folks live, actually, about halfway between Fosston and Detroit Lakes. So I know the roads well that the mayor described.

And they can be harrowing on a good day. So if you're in labor, that could be really difficult. Our research team has asked the question of, what are the consequences after a rural community loses hospital-based obstetric care? And there were some important consequences that are really necessary to understand when a closure is being discussed or being planned, because we can't ignore the consequences that we know happen.

And those consequences are an increase in out-of-hospital births and in emergency room births that happen. And we found that the effects of losing hospital-based obstetric care are concentrated in rural counties that are not adjacent to an urban area-- so not close to an urban area. And in those more remote rural counties, the rise in emergency room births is very large. And it stays high.

Whereas in rural communities that are located closer to urban areas, you see a rise in emergency room births, usually as people are adjusting, then it declines over time. The other major consequence that happens in more remote rural communities is an increase in preterm births. And that's important, because preterm birth is the leading cause of infant mortality.

And we know infant mortality is higher in rural communities. Both maternal and infant mortality are higher in rural communities compared to urban communities. So there are serious consequences.

CATHY WURZER: Can I get back to a person delivering in the emergency room? Why would that be an issue?

KATY BACKES KOZHIMANNIL: So, many hospital emergency rooms are not always fully equipped with the staff or the equipment to care for someone in labor and delivery. And in our rural communities, especially, if a laboring patient presents in an emergency room, getting them transport to a hospital that has obstetric services is sometimes very difficult.

Many of our emergency medical services, EMS services are volunteer-based. Some counties have only one ambulance in rural Minnesota and in other rural communities. And the other thing is that we actually also did a survey of rural emergency rooms and asked them about their capacity to provide emergency obstetric care.

We looked at the World Health Organization's international criteria for emergency obstetric care, and we found that many of our rural emergency rooms are lacking in this capacity. And about a third of them that we surveyed had an adverse event associated with a birth happen-- so some kind of bad outcome that they would have liked to prevent. And 80% of the rural hospital emergency rooms that we surveyed said that they need more training on obstetric care.

CATHY WURZER: You outlined some very serious ramifications. And I'm wondering, as hospital systems look, as we talked about prior, that a birthing center is a bit of a money loser, at least in greater Minnesota, what's to be done? And this has been happening now for quite some time.

My goodness, 20 years ago, there were almost 120 hospitals in Minnesota that delivered babies. Now, there are only about 76. So what's to be done to maybe help some of these hospitals?

KATY BACKES KOZHIMANNIL: I'm glad that you asked that. And I've had this discussion after Ely closed its obstetric unit, and Grand Marais, and Albert Lea. And this is a discussion that we keep having. And we're not going to continue to have it as long as the financial situation remains as it is.

And I think the fundamental challenges are twofold. First, labor and delivery services require that you have equipment and staff that are ready to handle a labor and delivery at any time, because babies come seven days a week, 24 hours a day. And the cost to have those people and infrastructure in place is a fixed cost.

The revenue to cover those fixed costs come with every patient who gives birth in your hospital. And so for any rural or remote community where your volume is low, the amount of money that you get in to cover those fixed costs is always going to be a constraint. And the other factor is that in Minnesota, over 40% of births are covered by Medicaid, our state Medicaid program. And that portion is higher in rural communities.

And it's a really important source of support and health insurance coverage for folks who are pregnant. But Medicaid pays about half of what private health plans pay. So if you're depending on patient-based revenue to cover your costs of obstetric services, and you have a higher proportion of Medicaid-paid births, that increases the financial pressure on that service line.

And it's incredibly difficult to make ends meet for rural hospitals. So to turn things around, we really need to talk about addressing those financial challenges. We need to pay for access to obstetric care as a basic community infrastructure if that's how it is valued and perceived.

CATHY WURZER: And I wonder what that mechanism would be. You're the expert, and I'm not. So would this be something that the state would look into, perhaps, in terms of funneling money for this service?

KATY BACKES KOZHIMANNIL: I think there are a lot of different approaches. And I expect that each community and each state would take a unique approach. And I will say the rural clinicians, the rural moms, and the rural hospital administrators I've talked to have really good ideas about this, as well as state legislators.

And there are a number of different options-- looking at low volume payment adjustments, increasing the amount that comes with each pregnant patient for those lower volume settings, or doing something like a cost-based reimbursement model like we do for critical access hospitals. That's been recognized as a core hospital-based service that's needed in some rural areas. And so it's reimbursed differently in order to accommodate that.

That's a federal program. But, of course, states can innovate around different types of payment as well. And I'd love to see more exploration of those options.

CATHY WURZER: Professor, you gave us food for thought. Thank you so much.

KATY BACKES KOZHIMANNIL: Thank you. I appreciate it, Cathy.

CATHY WURZER: We've been talking to Katy Backes Kozhimannil, a professor at the University of Minnesota's School of Public Health. By the way, Mayo Clinic will host a hearing on February 6 in New Prague to provide a forum for the Greater New Prague community to talk about the change in services and available alternatives for Mayo Health System patients. You can follow that coverage of that story and the Fosston story at mprnews.org.

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