Ten years ago, 19 hospitals in Philadelphia were in the business of delivering babies.

Next month, only eight will remain.

Blaming financial losses and a deluge of patients who previously might have gone to other, now-defunct maternity wards, Jeanes Hospital is closing its obstetrics unit May 31. Chestnut Hill Hospital is reviewing its obstetrics program as well and has not ruled out closure.

The demise of so many units has left hospitals still committed to birthing babies scrambling to find more space and staff. And complaining about money.

Maternity care is a money loser for most hospitals, and there is no break-even point, hospital leaders and financial consultants say. Losses rise with the number of patients - especially when those patients are poor. The culprits are high expenses for malpractice insurance and relatively low reimbursements from health insurers, the experts said. In recent years, as obstetricians threatened to leave the state because of high premiums, many hospitals took on the extra expense of employing the doctors and paying their insurance bills.

"I think clearly the economics don't support hospitals' remaining in the obstetrical world," said Rick Mankin, executive director of Temple Physicians Inc. Jeanes is part of the Temple University Health System, which hopes that some moms who would have gone to Jeanes will now move to other facilities in the system: Temple University and Northeastern Hospitals. But they have room for only a fraction of the 1,700 babies a year Jeanes was delivering.

"I think women would like to be able to deliver in their community if given that option," Mankin added. "Unfortunately, that's no longer an option in the Northeast."

While hospitals that ring the northern half of Philadelphia, where a disproportionate number of the closings have occurred, say they are doing their best to welcome even more new moms, one has to wonder: Do they really want the business?

Hospitals most affected by the closures say they are sticking it out because they need new moms to train young doctors or because they see obstetrics as an essential community service, but they are struggling to make the finances, and their facilities, accommodate more pregnant patients and sick babies. Several said their neonatal intensive-care units, a more profitable line of business, are at or approaching capacity.

"This is not a Temple or a Jeanes issue. This is a looming public health crisis, and Jeanes is just the latest illustration and clearly not the last," Mankin said.

What can be done?

Because of the closings, the Hospital and Healthcare Association of Pennsylvania is proposing a state-supported "obstetrics stabilization fund" that would bolster Medicaid payments for care of pregnant women and babies who need intensive care. The hospitals continue to push for state help in reducing malpractice expenses.

The Maternity Care Coalition, a Philadelphia organization that advocates in behalf of pregnant women and young children, wants the state to identify areas that have too few obstetricians and provide them with extra funding. It is also calling for higher Medicaid-reimbursement rates. And the state and the public should have a say in maternity-ward closures, the organization said.

Jeanes' patient base is likely to fan out to Albert Einstein Medical Center and other city hospitals, as well as hospitals in the suburbs, like Abington Memorial and Holy Redeemer Hospital & Medical Center.

Those hospitals are nervously eyeing Chestnut Hill Hospital, where 1,100 babies are born each year. Chief executive officer Brooks Turkel said he wanted to keep the money-losing program open, but he would not promise he would. He did say, "We do not have plans for program closure, nor did we embark on a program-closure review."

Einstein in North Philadelphia absorbed 800 more moms with the closing of Parkview Hospital's maternity program in 2003 and Frankford Hospital-Torresdale's last year, said Carol Irvine, vice president of operations. It expects an additional 500 after Jeanes closes. Patients who live south and west of Jeanes will find it too difficult to travel to suburban hospitals, Irvine said, and may not be able to use their Medicaid managed-care plan there.

"We are in the epicenter of the closures," said Arnold W. Cohen, Einstein's chairman of obstetrics and gynecology.

Einstein has room for only an extra 100 moms, Irvine said. An architect has developed an expansion plan, but the hospital will need help paying the estimated price tag: $10.3 million. "We don't have the capital funds within Einstein to do the magnitude of this expansion," she said.

Hospitals can do little to restrict how many births they handle. If Einstein were to try to cap enrollment in its prenatal programs, the women would probably still show up in the emergency room at delivery time, Irvine said. Plus, this is an important service.

"We've been delivering babies for 155 years," she said. "It is core to who we are."

Suburban spillover

Abington, which delivered almost 4,600 babies in fiscal 2006, says it can handle an additional 300 to 800 births, but it will have to make $8 million in renovations if the number rises above 400. Holy Redeemer is quickly spending $700,000 to make room for some of the Jeanes moms, said Marian Thallner, vice president of women's and children's services. It now handles about 2,300 deliveries a year and expects the Jeanes closure to add 300 to 700.

Lower Bucks Hospital can "easily" handle an additional 200 to 300 births, spokesman Bob Harris said. The hospital built a new labor-and-delivery suite a few years ago. "We built the capacity," he said, "and now it's coming."

While hospital leaders say there is a maternity crisis, the problem still appears to be more one of long-term financial viability than of immediate access to a hospital. Women are not yet having babies in hallways.

"The problem is choice," said Gerald Katz, a health-care consultant with Kurt Salmon Associates Inc., of Plymouth Meeting. "The problem is being able to select an obstetrician near your home, or one with a great reputation."

Some hospitals in the region still have room. Thomas Jefferson University Hospital, for example, is rebuilding an obstetrics program hurt by the departure of many of its doctors to New Jersey several years ago. In the most recent report from the Pennsylvania Department of Health, some hospitals - especially those in suburbs such as Doylestown, Grand View and Phoenixville - still had obstetrics occupancy rates below 50 percent in the fiscal year ended June 30, 2005.

But Abington Memorial, Einstein, Temple and Hospital of the University of Pennsylvania were reporting occupancy rates at or above 100 percent.

Overall, the number of births in Philadelphia and the Pennsylvania suburbs dropped 8.1 percent over the last 10 years - from 55,395 in fiscal 1995 to 50,885 in fiscal 2005 - while the number of staffed beds for obstetrics and/or gynecology dropped 18.8 percent, according to state Health Department records. The decline was greatest in Philadelphia, where births dropped 16.6 percent and the number of staffed beds fell 35 percent. (Births there have stabilized recently.) Meanwhile, the number of beds grew in Bucks and Chester Counties.

A decade ago, many hospitals had extra room. Obstetrics occupancy rates in each county ranged from 35 percent to 54 percent.

Financial distress

Because hospitals do not want to reveal their expenses and revenue from services for competitive reasons, they would not provide specifics to back up their claims of financial distress.

The Delaware Valley Healthcare Council, which represents hospitals in the region, cited a Lewin Group study that found that, in general, Medicaid pays hospitals 77 percent to 82 percent of cost. A spokeswoman said she did not know whether payments were better or worse for maternity.

Most hospital officials said private insurers paid better than Medicaid managed-care plans, but declined to say how much better. Meg McGoldrick, chief operating officer at Abington Memorial, said Medicaid paid about half what commercial insurers did.

The health council said the Medical Liability Monitor estimated malpractice insurance costs for obstetrician/gynecologists at $160,000 a year in the Philadelphia area. Some hospitals are now self-insured and gave widely varying estimates of their expenses. The hospitals must buy liability insurance not only for doctors they employ, but also for the hospitals themselves.

The state provides extra money for hospitals with large numbers of Medicaid patients and has been helping with malpractice costs. Hospitals say that is still not enough for them to break even on maternity care.

Losing money on births

Jeanes Hospital has been losing $1,000 per patient on obstetrics, said Linda Grass, its chief executive officer. Deliveries there leapt from about 800 a year to 1,700 with the closing of Parkview and Frankford. The hospital spent $500,000 last year to make way for the extra patients, but then realized it would have to double its maternity space to handle an anticipated 2,200 deliveries by 2011. That was too much, Grass said.

She said closing the program was a "sound and reasonable decision to protect Jeanes to be able to serve the community in the future."

The obstetrics program's losses rose from about $200,000 five years ago to close to $2 million this year, Grass said. Its patient mix also changed as more poor, pregnant patients gravitated to Jeanes. In the last five years, the percentage of maternity patients on Medicaid has grown from about 6 to 35. It has remained unchanged at about 6 percent in other hospital departments, Grass said.

Einstein, where 78 percent of maternity patients are on Medicaid, loses $2,000 per delivery.

Even Abington Memorial, where only about 6 percent of maternity patients have Medicaid or are uninsured, is losing $4 million a year on obstetrics, said spokeswoman Linda Millevoi.

For all the talk of the need for obstetrics care, Debra Somers, an ob-gyn who now works at Jeanes, is having trouble finding a new job. She has offices in Elkins Park and Northeast Philadelphia and is convinced her patients would not go farther into the city to have their babies. She has talked with Abington, but says it could be months before anything is final there. She is even looking across the river in New Jersey. "It's tough," she said. "There's not a lot of jobs out there."

Though she loves obstetrics, she will have to practice gynecology only until she can find a new place to deliver babies. She is sending her pregnant patients to other doctors now.

"I had to send out a couple of my OBs yesterday," she said Friday morning. "They were in tears, and I was in tears."

Who's Out of the Baby Business

One group counts 14 obstetrics units having closed in Southeastern Pennsylvania since 1997. Only one has opened, at Jennersville Regional in Chester County.

Hospital/year OB unit closed

Medical College of Pennsylvania (1997)

Nazareth (1998)

Germantown (1999)

City Avenue (1999)

Roxborough (1999)

Warminster (2000)

Elkins Park (2001)

Episcopal (2001)

Mercy Philadelphia (2002)

Methodist (2002)

Mercy Fitzgerald (2003)

Parkview (2003)

Frankford-Torresdale (2006)

Jeanes (2007)

SOURCE: Maternity Care Coalition

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Contact staff writer Stacey Burling at 215-854-4944 or sburling@phillynews.com.