Kimberly L. Skidmore, MD
Associate Professor
Louisiana State University Health Sciences Center
Shreveport
Volunteer Associate Clinical Professor
University of California, San Francisco
The author reported no relevant financial disclosures.

The definition of a “maternity care desert” is a county with no hospital providing obstetric care. Low access to maternity care services is defined as fewer than 60 clinicians per 10,000 births. Half a million of the 3.5 million to 4 million annual births in the United States are in these low- to no-access areas.

Introduction

Healthcare expenditures in the United States doubled compared with 20 years ago, exceeding $9,650 per capita in 2016 and $12,800 in 2021. The COVID-19 pandemic widened the spending gap between critically ill and primary care patients. Hospitals ended 2022 in a fragile state, stacked with approximately $100 billion in debt. More than 65% of hospitals fell into the red in 2022 versus 34% in 2019. Primary care and obstetrics were funded less, as Medicare and Medicaid reimbursed hospitals for selected devices and drugs used in advanced chronic disease. Considering the average individual’s rising disease burden and lowered life span, Medicare and Medicaid pricing structures should redirect funds toward effective preventive medicine, orchestrated within integrated hospital networks.

This review summarizes the literature about recent staffing shortages as well as reimbursement differentials for cardiology, orthopedics and primary care. We contextualize the alarming sprawl of maternity care deserts in the United States, as it parallels hospitals at their breaking points. By contrasting hospital networks and reimbursement patterns in California and Louisiana, with respect to maternal–fetal outcomes, we describe approaches proven to improve primary care.

Anesthesiologists were uniquely positioned in hospital management and at bedside to ensure safety from birth to end of life. However, recent consolidation of collections into distant corporations has shut out most anesthesiologists from business decisions. Eight key factors contribute to burnout among anesthesiologists. These same errant management decisions appear to destroy many physician and nursing groups. Finally, this review offers solutions based on models that are working well, such as smaller groups with self-directed management.

Staffing Crisis

Twenty percent of physicians and 40% of nurses plan to quit within two years. Travel nurses in some hospitals outnumber permanent staff, creating a vicious cycle of poor morale and lack of retention. Permanent staff see travel nurses with less experience in specific settings earn three times more per hour, plus a lighter night call schedule. The two main reasons staff quit are requirements to work extraordinary hours at half the pay of travelers and lack of empowerment to contribute to their small group’s management of patient care. A glimmer of hope arose between 2000 and 2018, when the United States experienced an increase of 22% in licensed nurses, as opposed to 12% in comparable countries.

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The Association of American Medical Colleges projects a shortage of 124,000 physicians by 2033. This is partly the result of a Medicare-imposed cap on residency positions, frozen at 1996 levels. In 2019, more than 3,100 medical school graduates could not begin residency training, comprising about 8% of all U.S. graduates. Louisiana is offering a new voluntary program for an unmatched medical student to bill independently and pair with a primary care physician preceptor. While this is a valiant effort, a student could feel isolated in an environment without the structural support of large hospital network–funded primary care clinics or a residency. Medicare imposed a cap because teaching hospitals are associated with a financial loss of 8.7%. The improved payor mix for orthopedic or cardiac care incentivizes hospitals to hire specialty physicians and self-pay for a few specialty residency slots.

Nonacademic hospitals often preferentially close maternity wards, while an orthopedic or cardiac ward thrives. Some hospitals elect not to accept Medicaid, but the Emergency Medical Treatment and Labor Act requires their emergency department to not turn away any patient. Thus, all ERs are overflowing and in the red. Many times, obstetric patients have no prenatal care clinic available and show up at a local ER. Sometimes ERs are already delivering a baby, yet no obstetrician or midwife is available.

If Medicare and Medicaid matched fee schedules to simple but specific realistic outcomes at large hospital networks, simultaneous to allowing smaller groups to manage their schedule and department protocols, staffing turnover would improve. For example, most physicians no longer can afford to run small private practices, so they are placed on an annual salary by a large hospital network. Only when local staff can decide their on-call schedule, different compensation rates and formulate patient care policies in response to small group meetings can staff be content. Examples of this abound historically where staff spent their entire career working in one hospital, never needing travelers.

Budget Crisis Stemming From High-Intensity Billing

Spending on healthcare increased from $1.4 trillion in 1996 to $3.1 trillion in 2016 (rising from 13%-18% of gross domestic product, or $5,259-$9,655 per person, above $12,800 in 2021). In 2016, about half was paid by the government and half by insurers (or 9% out of pocket). The highest amount of spending was approximately $425 billion on back or joint pain (about 57% by private insurance). Next ranked diabetes at $110 billion. Heart disease and falls came in third and fourth place, each at about $90 billion.

Hospitals close when the payor mix lacks highly reimbursed procedures. In the fee-for-service model, obstetricians formed small groups to supplement maternity care with surgeries. Even if obstetricians include midwifery 40% of the time in antepartum care, the reimbursement from Medicaid was $500 less per baby than expenditures. As another example, Medicaid fees for maternity-related anesthesia consistently do not cover the cost of procedures, and differences in cost must be made up by hospital subsidy. As far back as the mid-1990s, Medicare and Medicaid organizational charts showed obstetric care is not considered the same as anesthesia during surgery. Thus, nurse anesthetists were already practicing solo, years before California became an opt-out state for physician supervision. The chance of malpractice claims arising during obstetric anesthesia is eight times that during general surgery, so it stands to reason that anesthesiologists would be more helpful to supervise high-risk anesthesia at maternity wards.

Typical annual malpractice insurance premiums remain $80,000 per obstetrician or $25,000 per anesthesiologist. The same anesthesiologist moving within California to a county with a higher rate of poverty doubles this annual premium, creating another deterrent to work within a maternity care desert. A hospital will elect not to offer maternity care if threatened with bankruptcy. In attempts to avert bankruptcy, many rural hospitals performing half as many elective surgeries as normal during COVID-19 elected to close half of all inpatient beds and their entire maternity wards. Each year that passes, maternity care deserts cost society immediately $30 billion, not to mention the untold costs of each lifetime of disability.

Continuity of Care

At a federal level, an ethical and cost-effective payment system needs to benefit the most patients for the longest time frame. Consider the moment of delivery of a baby, wherein not only the moment of birth but the condition of the mother and baby matters. Over 53% of maternal deaths are between days 7 and 365, not during the hospitalization for delivery.

Similarly, a patient’s coronary artery blockage is not defined by the one day they received a stent. Consider an example of complex issues before and after coronary artery bypass graft surgery (CABG). At one Kaiser Permanente location, with continual care inherent in a health maintenance organization (HMO), the 30-day mortality rate was just 0.5%, under four times the state’s average. Kaiser enjoys a high Medicare reimbursement rate per heart surgery and is a closed payment system of members. Kaiser is popular, chosen by over one-fourth of Californians as their insurance plan. From 2003 to 2007, 1.25 million CABG outcomes were evaluated according to Medicare, Medicaid or private insurance. Medicare was associated with mortality in 3.3%, Medicaid in 2.4%, uninsured in 1.9% and privately insured in 1.1%. Length of stay was longest for Medicaid patients at 11 days, with the highest cost at $113,380. Because more Medicaid and Medicare patients are critically ill, poor and older, the mortality rate is explained in part. The continuity of care—preoperative optimization, subspecialty groups and regionalization of specialties, to name a few—and specific organizational protocols yielding 0.5% mortality would be worth emulating.

A large study published in JAMA showed Veterans Affairs hospitals had better outcomes than private hospitals among older men with a heart attack or pneumonia. The VA directly provides continuity of care rather than piecemeal fee-for-service Medicare incentives that other hospital networks need to survive. One study showed veterans dying of cancer between 2010 and 2014 had more high-intensity treatment days if at a Medicare hospital rather than at a VA hospital.

Medicare and Medicaid could save money and improve quality of life if Congress set up a system to pay for these capitated healthcare systems. Medicare provides a list of required prerequisites for a given procedure. Each private insurance negotiates this itemized fee with each hospital. Hospitals advertise widely if a profit is likely. Prior to the pandemic, hospitals cost-shifted profits to the underinsured.

Spine and joint surgeries accounted for up to $425 billion per year of the $3.1 trillion in 2016. In the United States, twice as many MRI machines per capita exist versus at European counterparts. Inpatient hip replacement rates in the United States are similar in Switzerland and Germany at 16 per 1,000 population, while Canada and the United Kingdom perform only 10 per 1,000. Joint replacements are required about 30 times more often in the presence of morbid obesity and advanced age, possibly accounting for these higher numbers, but also hospitals are likely to seek the incentive of high reimbursement even when comorbidities might make a primary care doctor cringe. Another example is an Alzheimer’s drug, narrowly approved by the FDA, likely to win funding by Medicare soon, despite a price tag of $40,000 per person (plus more MRI scans, etc.) annually and a dangerous frequent side effect of brain swelling.

As we will explain pertaining to maternity care, mental health is the No. 1 chronic health problem facing the United States. Half as many mental health professionals (at about 25/100,000 population) are employed in the United States, compared with Germany, France and Canada, and only one-fourth compared with Australia and the Netherlands. More physicians in the United States flock to higher paid specialties, with only 12% being primary care doctors. Per 1,000 people, the United States has 2.6 physicians, while most European countries have four. Acute care beds per 1,000 people in Germany were six, 3.1 in France and only 2.5 in the United States in 2017, falling from three in 2000. There are fewer hospital beds and fewer physicians, especially after the pandemic began.

Maternity Care Deserts

The definition of a “maternity care desert” is a county with no hospital providing obstetric care. Low access to maternity care services is defined as fewer than 60 clinicians per 10,000 births. Half a million of the 3.5 million to 4 million annual births in the United States are in these low- to no-access areas.

Assuming 55% of maternity care is paid by Medicaid nationally, Medicaid paid approximately a mere $20 billion of the total $3.1 trillion healthcare spending on maternity care. The problem with “bundled payments” is that Medicaid and Medicare often cite reasons not to reimburse a hospital, despite these complications not being the fault of the hospital. Private insurance reimburses twice the amount per delivery, funding another $40 billion. California has more funds available to form collaboratives to organize outreach clinics, with only 43% Medicaid population versus Louisiana with 68% Medicaid population.

California conducted a quality improvement collaborative among 99 hospitals from 2011 to 2016. They reduced maternal morbidity from hemorrhage by educating all the hospital staff about an algorithm to identify a high-risk pregnancy and placed a treatment card on a new supply cart in the delivery suites. The result was maternal mortality of 11 women per 100,000 deliveries for white patients and 13 per 100,000 for Hispanic patients, and for Black patients, 40 per 100,000. In 2018, Louisiana had the nation’s highest mortality of 58 women per 100,000 deliveries. Many maternal deaths are associated with bleeding arising from scar tissue etc. with repeat caesarean deliveries. Kaiser reported in Anaheim in 2020 a caesarean delivery rate of only 21% compared with 23% in California. After a concerted effort to convince hospitals to reduce caesarean deliveries, the Louisiana rate dropped to 28% from 37% the year before. This California collaborative halved the maternal death rate via several steps: mobilizing public private services, creating a data center to provide feedback to hospitals, educating nurses based on past deaths and achieving 75% to 92% of hospitals’ adoption of hemorrhage and preeclampsia education algorithms and tool kits.

Nationally, 80% of maternal deaths are preventable. In 2020, the U.S. maternal mortality rate was 23.8 women per 100,000 births (within 42 days). Compare this with France, Canada and the United Kingdom, whose rate was around seven women per 100,000 births. Mental health—including addiction—is the No. 1 killer in the United States, at about 26%, heart disease at 22% and hemorrhage at 14%. In all healthcare, excess mortality (annual deaths from all causes above the year prior to COVID-19) from 2020 to 2022 was 27% in the South, compared with 18% in California, which has a more insured population and more clinicians. Sixty thousand women per year suffer long-term adverse events after delivery. Infant mortality increased from 5.4 babies per 1,000 births in 2020 to 5.5 in 2022. Risk factors are morbid obesity, drug use, prematurity and poverty.

Tracking hospital budget shortfalls of 2022, it’s logical that loss of maternity wards is accelerating. Between 2003 and 2013, 366 obstetric units closed; rural obstetric unit closures were more likely in Black communities. Louisiana has many maternity care deserts, while California has almost none. Nationally, 9% of rural counties lost their obstetric services between 2004 and 2014, when added to another 45% of rural counties that already had no hospital obstetric service, means 54% of rural counties have no obstetric care. Between 2007 and 2015, maternal morbidity increased from 109 women per 10,000 births to 152 per 10,000. When controlled for sociodemographic and clinical comorbidities, rural residents still had a 9% greater chance of morbidity. Between 2010 and 2021, 136 rural hospitals closed. Nineteen of those occurred in 2020, the most of any year in a decade. Federal COVID-19 bailouts helped hospitals avert closure from 2020 through 2022, but 2023 is concerning.

Disintegration of Anesthesiologists Private Practice Groups

Management of a business appears ideal at a medium size. A small group manager who allows discussion of the problem list and action plan before creating new policies often results in efficient and content colleagues. We propose eight key factors affecting staff burnout:

  • small group director: decide daily schedule;
  • work–life balance;
  • respect of work through adequate pay per hour;
  • prioritizing supplies and equipment purchase;
  • morale of entire team including housekeeping and administrative support;
  • pay for performance for optional overtime in subspecialties;
  • safe staffing ratios and rules of supervision or training levels; and
  • morbidity and mortality meetings with action plans that are feasible.

When anesthesiologists formed private medical groups, if someone was suddenly ill or someone else wanted to work additional hours, he or she contacted the small group’s medical director to change the schedule. A predictable schedule was described in the job contract. The average work hours per week were conducive to work–life balance. Anesthesiologists, when medical directors for perioperative services including maternity wards, decided the pay for specific types of duties, the educational level required for certain procedures and distributed policy algorithms after examination of recent morbidities. They would order supplies as soon as deemed necessary and keep surgery efficient and safe.

Recently, large management groups have dictated the compensation model. This problem is not unique to anesthesiologists. All staff are saddened when the rooms are not cleaned properly, staff training and job performance is not as in prior years, and when their daily issues are ignored. Now, jobs require forced overtime from permanent staff (but not from travelers), sometimes 85 or 95 hours per week, working despite being sick, incessantly on call from home, etc. Nurses are quitting the profession for a similar reason. Turnover is incredible, like at a merry-go-round.

Unfortunately, anesthesiologists are often now unable to have a seat at the table during meetings about the budget for supplies as simple as IV pumps, laryngoscopes, end-tidal carbon dioxide monitors or arterial blood gas machines. Instead of presiding over discussions of recent morbidity cases, anesthesiologists have been replaced by all nurse anesthetist groups to cut up-front costs. While anesthesiologists used to be the authors of the local clinical algorithm for obstetric emergencies, or enhanced recovery after surgery in orthopedics protocols to prevent obstructive sleep apnea or excessive pain medication, they are now often employed to work in a job defined by a long-distance manager.

Anesthesiologists formerly had safe and efficient throughput in the OR when fee-for-service was sufficient to reimburse their small group staff, but now that larger, more distant managers redefined the pay for performance indicators, anesthesiologists are less efficient. To be credentialed at hospitals to perform the same job as a nurse anesthetist is not efficient. Possibly it is time to triage some cases to CRNAs, but this should be determined by a medical director who is an anesthesiologist in that hospital. Initially, this review was written without mentioning anesthesiologists precisely because their leadership role is disintegrating.

Solutions

Delays and complexity riddle the Medicare and Medicaid system. Perhaps a new panel of federal physicians could redesign simpler reimbursement rates. Instead of penalizing hospital systems willing to open clinics to follow individual patients throughout their lives with low payments for preventive medicine, Congress could raise the cap on residency slots, lower the cap on malpractice insurance premiums and settlements, and simplify reimbursements to hospital networks to match their capitated outcomes.

Some potential solutions include:

  • Adjust and simplify Medicare and Medicaid rates to link to actual costs strictly and swiftly at each major hospital network, to encourage HMO-style primary care.
  • Build in structure for HMO-style primary care outreach clinics.
  • Reduce the fee, if a procedure is not likely to improve “quality-adjusted life-years.”
  • Increase the fee, if a hospital network is providing preventive care.
  • Eliminate the complex preapproval and denial of payments structure.
  • Assign one manager to each subspecialty locally.
  • Write clinical quality pathways based on monthly staff meetings.
  • Design daily on-call schedules.
  • Provide fair compensation per hour, with an appropriate bonus for productivity.
  • Increase residency slots Medicare allows to match the number of U.S. medical students, with a higher proportion in primary care, psychiatry and obstetrics.
  • Decrease the cap on malpractice settlements and therefore insurance premiums and the $50 to $80 billion per year lost in defensive medicine.

As with public schools, healthcare could be capitated per person served per year, with upgrades for enrolling those with certain chronic diseases into primary care visits, such as addiction care, therapy, meetings to reduce obesity, diabetes care, blood pressure monitoring and maternity care. Kaiser and many other large hospital networks are attempting to expand such telehealth services and rural outreach clinics but have little federal support in terms of regulations and direct Medicare or Medicaid structure of funds. In 2023, almost all hospitals are at some risk for closing. Even when producing good outcomes, Kaiser lost $4.5 billion in 2022. Only Tenet, HCA Healthcare and Community Health Systems operated at a profit margin. The remainder experienced $135 billion higher expenditures in 2022 over 2021. Labor accounted for $86 billion with nonlabor costs at $49 billion.

This problem has been brewing but now is exploding. In 2012, The New York Times published a chart showing U.S. medicine simply costs more than in other countries, stating that a CABG was $68,000 and a joint replacement $12,000. Currently, Medicare reimburses about $60,000 for some same-day pacemakers, while their benefit data are scant. After ischemic heart failure, resynchronizing biventricular pacemakers have no benefit in approximately one-third of the patients, especially if not placed in a more specific situation than Medicare requires. As another example, placing an aortic valve in the cardiology lab with overnight stay reimburses a hospital around $120,000. During the pandemic, such elective surgeries with insured patients went on hold indefinitely. Now patients are critically ill, and hospitals pay 1,000% higher staffing costs. Indiana hospitals, for example, have usually operated at a small profit margin, but in 2022, they lost $72 million. The Indiana Hospital Association expressed concern that many rural and some urban hospitals will have to close in 2023, stating, “Without the appropriate support and evaluation of existing policies by the state and federal government, rural hospitals will continue to be on life support.”

Low reimbursements and lack of structure for maternity care have caused hospital wards and birth centers to close. In Louisiana, Medicaid reimburses about $5,000 for a delivery, while private insurance reimburses about $12,000. In California, Medicaid reimburses an average delivery at about $6,000, and private insurance about $23,000. In contrast, half of Mississippi’s rural hospitals are at risk for closing in 2023; many include maternity wards and most include ERs. One study showed among 227,412 deliveries in women who lived within ZIP codes that lost their nearest obstetric unit from 2006 to 2015, Black women suffered the highest severe maternal morbidity rates, increasing from 1.2% to 2.3%. The March of Dimes proposed policy solutions such as extending Medicaid postpartum bundled payments from 60 days to 12 months, plus strengthening the networks to telehealth and chronic disease care. In summary, maternity care deserts will make the next generation less healthy, especially in geographic regions with poverty.

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