The disappearance of maternity wards from community and rural hospitals is an accelerating public health crisis across the United States. Since 2010, hundreds of hospital obstetric units have closed, with over 500 shuttering their doors between 2010 and 2022. This trend has led to a dramatic rise in “maternity care deserts”—counties lacking any birthing facility or obstetric clinician. More than one-third of all U.S. counties now qualify as maternity care deserts, leaving millions of women with limited or no local access to care. The driving forces behind this widespread closure represent a complex, interconnected set of financial, staffing, and structural challenges.
The Economics of High-Risk Care
The primary challenge facing hospital maternity units is the financial structure of delivering specialized care with inconsistent patient volume. Maintaining a labor and delivery unit requires a high degree of readiness, meaning hospitals must budget for equipment and dedicated space staffed 24 hours a day, seven days a week. This need for constant, specialized coverage creates high fixed costs that are difficult to offset, particularly for smaller facilities.
Declining birth rates mean that units are often not delivering enough babies to justify this expense. Studies suggest a maternity ward needs at least 200 births annually to reach a financial break-even point. When patient volume is low, fixed costs are spread across fewer procedures, leading to significant financial losses.
A major contributing factor to this revenue deficit is inadequate reimbursement for labor and delivery services. About half of all U.S. births are covered by Medicaid, which often reimburses hospitals at lower rates than commercial insurers. Hospitals serving a high proportion of Medicaid patients, such as rural and safety-net facilities, struggle to cover the actual costs of care. This financial strain often makes the obstetric unit one of the first services eliminated when a hospital faces budgetary pressures.
The Crisis in Obstetric Staffing
The availability of specialized personnel is a major factor contributing to unit closures. A maternity ward cannot function safely without a full complement of highly trained staff, including OB/GYNs, specialized labor and delivery nurses, and immediately available anesthesiologists. The United States is experiencing a workforce shortage in obstetrics, with projections estimating the country will only meet 82% of the anticipated demand for OB/GYNs by 2037.
Recruiting and retaining these professionals is particularly difficult for hospitals in rural areas. Only about 7% of obstetric providers work in rural areas, even though 20% of the U.S. population lives there. Burnout among existing staff, especially labor and delivery nurses, is exacerbated by the high cost of retaining specialized workers and the pull of higher pay from travel nurse agencies.
The shortage creates a safety risk, leading to inconsistent nurse-to-patient ratios. When a hospital cannot guarantee adequate, 24/7 staffing, the risk of complications rises, and the unit often becomes unsustainable. The high cost and difficulty of staffing a unit around the clock is a major operational hurdle that low-volume hospitals often cannot clear.
Skyrocketing Malpractice Insurance and Liability
The high cost of medical liability insurance places a significant financial strain on obstetric services. Malpractice premiums for OB/GYNs are among the highest in all of medicine, comparable to those paid by neurosurgeons. This is due to the high-risk nature of birth, which involves caring for two patients—mother and baby—and the potential for catastrophic outcomes.
The severity of potential damages, particularly in cases involving a neurologically impaired infant, drives up insurance costs. Claims related to birth injury can have a “long-tail” liability, meaning lawsuits can be filed up to 21 years after delivery. An OB/GYN practicing in a high-litigation area might pay an annual premium ranging from $100,000 to over $200,000.
For hospitals, this translates into high operating costs that must be covered regardless of the number of births. In low-volume units, this fixed insurance expense becomes disproportionately burdensome, making it financially impossible to sustain the obstetric service. Financial pressure has caused approximately 30% of OB/GYNs to stop practicing obstetrics within 12 years, often focusing solely on gynecology to reduce liability exposure.
Systemic Consolidation and Geographic Inequality
Macro-level trends in the healthcare industry, specifically hospital mergers and system consolidation, further contribute to maternity unit closures. When large health systems acquire smaller community or rural hospitals, they often seek to centralize services to improve efficiency and reduce redundancy. This strategic consolidation frequently results in the closure of smaller, less profitable obstetric units, routing patients to the system’s larger, regional medical centers.
This centralization creates geographic inequality, with rural communities bearing the brunt of the closures. Since 2011, hundreds of rural hospitals have stopped providing obstetric services; today, only about 41% of U.S. rural hospitals still offer labor and delivery services. Losing a local maternity unit means pregnant patients must travel significantly longer distances for prenatal care, emergency services, and delivery.
Longer travel times disproportionately affect women in rural areas and those who are low-income or rely on Medicaid. Increased travel distance is associated with a higher risk of adverse health outcomes, including a greater chance of preterm birth. The loss of local care is a factor that directly impacts maternal and infant health.