When OBs are scarce: insurance costs and other pressures are causing obstetricians to leave the practice—affecting employers and their pregnant employees

HR Magazine, August, 2007 by Susan J. Wells

On a chilly morning last April, about 100 people, among them expectant mothers and parents carrying bundled-up babies, rallied outside Chestnut Hill Hospital in northwest Philadelphia to show that they didn't want the facility to close its labor and delivery unit.

After the head of Chestnut Hill's obstetrics and gynecology department resigned, the hospital had announced it was reviewing the future of its obstetrics unit, where about 1,200 babies are delivered each year.

The group had reason to be concerned: Over the past 10 years, 14 hospitals in the Philadelphia area have closed their maternity units; three did so in one year alone. "Women are getting very anxious, not knowing where their physicians will end up," says JoAnne Fischer, executive director of the Maternity Care Coalition, a nonprofit women's health advocacy organization in Philadelphia that has tracked and studied the trend. "I would say we have moved from a crossroads to a crisis," she adds.

Although Chestnut Hill eventually decided to keep its obstetrics unit open, a few weeks later, across town, Jeanes Hospital, part of the Temple University Health System, closed its labor and delivery unit, which was comparable in size to Chestnut Hill's.

The situation in Philadelphia reflects a problem that has developed in various places across the country: a declining supply of obstetricians and the closing of the hospital maternity units that support them and their patients.

Meanwhile, HR and benefits professionals are fielding the troubling, everyday results of the fallout: Employees who lose established doctors are forced to travel farther and take more time off work to access care, and many have to deal with reduced care or delayed care. All of those results can drive up medical claims costs.

What's Causing the Exodus?

Many obstetrician/gynecologists (OB/GYNs) are no longer delivering babies (or are giving up obstetrics while retaining their gynecological practices) because of the rising costs of medical malpractice premiums and concerns about being sued, according to the American College of Obstetricians and Gynecologists (ACOG), a 49,000-member organization in Washington, D.C. One survey reported that OBs' malpractice premiums had risen about 53 percent in a recent four-year span. (See "Negative Numbers," below.)

More than 8 percent of OB/GYNs who responded to a 2006 survey by ACOG said they had stopped practicing obstetrics during the previous three years, and the organization says more than one-third of OB/GYNs have cut back on high-risk obstetrics care. (For comparative purposes, ACOG's 2004 survey--which covered 1999-2003--showed that about 14 percent of OB/GYNs had stopped practicing obstetrics.)

In areas where the liability crisis is most pronounced, "there are now populated areas with no OB/GYNs actively practicing the specialty," says Dr. Ralph W. Hale, ACOG's executive vice president.

In Tennessee, for example, 42 of the state's 95 counties now have no residing OB/GYN in patient care, according to the most recent data from the American Medical Association (AMA) in Chicago and the Nashville-based Tennessee Medical Association (TMA). A TMA survey in 2006 found that 70 percent of Tennessee's physicians believe the state has a shortage of high-risk specialists, and the AMA recently designated it as a crisis state. (See "The States of Medical Liability" on page 60.)

Because of the lack of available doctors, pregnant women in some areas must travel long distances--60 miles or more in some instances--to find a physician willing to provide obstetric care, some experts say. The same is true for women trying to find OB/GYNs willing to perform complicated gynecologic surgery.

"It's a very serious problem," says health-policy expert Helen Darling, president of the Washington, D.C.-based National Business Group on Health (NBGH), which represents health care interests of more than 200 large employers. "The fear of being sued is driving OBs and other specialists out of practice," she says, and that in turn can lead to higher costs for employer-sponsored health plans.

HR's Stake in OB Shortages

Employers' health coverage expenses are affected by OBs' liability concerns, experts say, not only because of increases in premiums but also because of the extra diagnostic tests and consultations that doctors may order at least partly to shield themselves against possible litigation. "Defensive medicine," as some call it, can also lead to performing more cesarean-section births than may be medically necessary. Such financial pressures can cause employers' overall medical costs to be 20 percent to 30 percent higher than they otherwise would be, the NBGH estimates.

In addition, experts say, a scarcity of obstetricians could result in troubled pregnancies or medical problems for newborns--both of which can drive up costs. And employers may bear the expenses of productivity losses when the closing of an obstetrical practice causes their employees to travel much farther--and take time off to do so--for prenatal care and delivery. Premature deliveries may also lead to longer maternity leaves.