Labor & Delivery unit on hospital chopping block

Nearly two years after last broaching the subject, the Bryan W. Whitfield Memorial Hospital decision makers spent a portion of Thursday considering the possible closure of the labor and delivery unit.

“Just trying to see how we can afford to keep it open. We’re losing and have been losing money,” BWWMH administrator Mike Marshall said. “We’re losing, on average the last three or four years, anywhere between $400,000 to $500,000 a year by keeping it open.”

The last time the discussion reached a boiling point, the City of Demopolis pitched in $100,000, a healthy sum that combined with financial contributions from other sources to extend the OB unit’s life expectancy. Other labor and delivery units on the chopping block at that time were less fortunate as cities such as Russellville saw their OB facility become an economic casualty.

“Nobody in the state makes money on OB,” Marshall said. “The whole idea behind hospitals doing OB is, from a marketing perspective, once you get the mother, you get the family for life. The spinoff business in larger markets where you have a higher commercial share of insurers, you may lose money delivering that baby, but you pick up the husband’s care, that child’s care, any subsequent children they may have and the mother’s care down the road and more of those people in those markets are insured by Blue Cross, United or any commercial carrier, so you get reimbursed a higher rate.”

The problem for the Demopolis unit – as Marshall sees it – stems from the decreasing reimbursement rate of Medicaid funding.

“Here, about 70 percent of our deliveries are covered by Medicaid or ‘no-caid’ and we get reimbursed for less than our cost of business for taking care of Medicaid patients. By that business coming back, all you’re doing is losing more money,” Marshall said. “You can’t make it up on the backside with reimbursement because your reimbursement is so low already that you’re not only losing money delivering that initial episode of care and delivering the baby, but you’re losing money every time the family comes back. Obviously it is not the family’s fault. They’re doing the best they can. It’s because our Medicaid program is so underfunded.”

As local physicians and others clamor to keep the unit open, the BWWMH board will find itself facing a tough decision when the matter comes to a vote April 25 at the next scheduled meeting.

However, Marshall warns, the economic climate is showing no signs of improvement and the purse strings may become tighter yet.

“With everything else getting as tight as it is – for example with the Medicare cut that that went into effect with the sequester April 1, we’re going to lose over the course of the next year somewhere between $250,000 and $300,000 in Medicare reimbursement unless something happens to change that. Effective July 1, we’re going to be taking a five percent cut in what the state pays us for our Health Start maternity care program,” Marshall said. “The pie is not going to get any bigger. I personally think it is going to get smaller. If it doesn’t get any bigger to the tune of 3.5 percent every year, medical CPI eats that up.”

With those factors in mind, Marshall said the priority for the hospital in the coming weeks is to devise a way to keep the unit open.

“If we can’t figure that out, go forward with a plan to phase it out. Those are the priorities in that set order.,” he added.

The unit currently boasts a staff of 11, a number that has not changed in recent years. Over the last 10 years, the largest number of babies delivered in a given year came in 2008 when the facility accounted for the birthing of 361 babies. But, Marshall noted, the most productive year of that stretch and the least productive year of that span featured the same amount of staff members in the OB, a fact he says points to the reality that staff of the unit cannot be slashed any further.

“We’re going to experiment with some alternative staffing models and see how they stack up in terms of whether they are going to be able to accommodate what we need from a risk management standpoint liability wise. If we can satisfy that target and then see what kind of money it would save us. And then look at doing some creative purchasing of the equipment we need. All that stuff we’ve been doing for several years now,” Marshall said. “We can’t slash the staff anymore. We might be able to do some different things scheduling wise. I’d hesitate to say I’m not optimistic, but I’ve been down this road before two years ago. We’re just going to have to make a decision whether we’re going to do it and know it’s going to lose money or get on down the road, cut it, deal with the fallout and get on down the road.”

If the board votes to close the unit, the next step would be to put a plan into place that would gradually lead to the closure of the unit. Marshall said that plan would likely see the unit stay open no less than 60 days and no more than 90.

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