Perry Memorial Hospital will close its obstetrics unit at the end of the year after 93 years of delivering babies.
The small Princeton, Ill., hospital lost $500,000 on its obstetrics program last year. Under the Affordable Care Act's new payment rules for Medicare, which primarily covers people over 65, and previous federal budget cuts under sequestration, the hospital is also facing $1 million in federal cuts.
Perry Memorial is one of many hospitals around the country making difficult choices about saving or closing programs in the wake of federal cuts under the Affordable Care Act, the nation's new health law.
Princeton is like many rural communities in which populations are declining, and those who stay are getting older. The hospital delivered about 380 babies per year 15 years ago, but that number has dropped to 100 births per year.
And a growing percentage of births today are to mothers covered under Medicaid, which cover low-income people. The hospital receives about 16 cents on the dollar for care given to those patients.
Running the under-utilized obstetrics units just got too expensive. In Illinois, even if the unit is empty, the hospital is required to have a nurse on duty and to maintain Caesarian surgical services.
Rex Conger, president and CEO, said he wonders what closing the obstetrics unit will mean for his hospital's future.
"At larger community hospitals, people assume they would have OB services," Conger said. "It is one of those basic services hospitals historically offer. I am concerned about the long term. Will we be able to continue to exist? I think, 'What have I done?' But then I think about the half a million dollars a year we were losing."
When the hospital's obstetrics department closes, prenatal and postnatal programs also end. Women will have to travel about 25 miles to the nearest hospitals for deliveries and those programs.
Andrea Anderson works with low-income families through the United Way in Princeton. She said the 25-mile drive will be a hardship for many low-income families who lack vehicles or extra money for gas.
"I think it is going to be detrimental to our women to have to seek service 20 minutes away for prenatal care," she said. "In the scheme of things, I think it is going to be a tremendous loss."