A rural Oregon town lost its maternity ward. As Trump’s Medicaid cuts loom, other hospitals may be next

It was the middle of the night on April 2, 2024, when Teela Banister went into labor. She and her husband raced out the door of their rural home on the outskirts of Baker City in Eastern Oregon, hoping to make the hourlong journey to a hospital before she delivered their daughter.

They could not go to the hospital just 15 minutes away, Saint Alphonsus Medical Center, which shuttered its labor and delivery unit in August 2023 — weeks before the couple found out they were expecting a second child.

Banister, 25, dreaded the prospect of giving birth without the Baker City obstetrics program. An aspiring labor and delivery nurse herself, she knew being so far from a hospital was risky, especially given how quickly she gave birth to their first child.

“My biggest fear … was that I was going to give birth on the highway driving to the hospital,” Banister recalled to InvestigateWest.

That fear ultimately came to pass. She and her husband only made it 20 minutes into the drive north to a hospital in La Grande before she felt her water break. Ten minutes after that, her husband still barreling down the highway, she had a daughter in her arms.

But Banister’s newborn did not make any sounds — she had fluid in her lungs. She frantically tried suctioning out her baby’s nose and reaching into her mouth to see if there was anything blocking her airway.

“Mom instincts took over,” she recalled. “She’s not crying and I just need to do these things to get her to make noise or at least try and breathe.”

When the couple finally arrived in La Grande, their daughter was rushed to the emergency room, wrapped in the sweatshirt Banister had been wearing. Doctors quickly cleared the newborn’s system, saving her any further complications.

“I was shaking for a few hours after the fact,” Banister said. “I stayed in a lot of shock.”

Banister is one of many parents in Baker County grappling with the loss of reliable, local obstetrics care in the two years since Saint Alphonsus closed its program, limiting their birthing options to staying at home or traveling to a hospital an hour away or more.

One woman told InvestigateWest she temporarily relocated her family to Idaho well before a scheduled cesarean section in case she went into labor early. Another said her appointment for induced labor in La Grande was pushed back multiple times, only for her to begin labor naturally at home — she was seven centimeters dilated by the time she made it to the hospital.

Their experiences offer a sobering glimpse of challenges many more families in rural Oregon could face under changes to Medicaid made as part of President Donald Trump’s signature tax cuts and spending package, known as the “One Big Beautiful Bill.”

The Republican-led law is expected to slash Medicaid programs nationwide, including more than $11 billion from the Oregon Health Plan through 2031, according to a preliminary estimate from Gov. Tina Kotek’s office.

With roughly half of all Oregon births covered by Medicaid, hospital administrators say it is likely that more hospitals — already operating on thin margins — may follow Baker City’s lead. The result: more dangerous pregnancies and higher rates of maternal and infant mortality.

“Most hospitals lose money on maternity services already,” said Jeremy Davis, CEO of Grande Ronde Hospital in La Grande, the hospital where many Baker City women have turned to for obstetrics care after Saint Alphonsus closed its birthing center.

“It’s just going to put further pressure on hospitals on whether they can continue to retain some of these essential services,” Davis said.

A handful of Oregon health care providers are already taking steps to scale back maternity care. Providence Seaside Hospital — a 25-bed rural hospital on the North Coast — is eliminating inpatient obstetric and newborn care in early October, citing the rising cost of care and staffing challenges. Oregon Medical Group plans in November to shut down its OB-GYN department, which serves patients at McKenzie-Willamette Medical Center in Springfield, because of an exodus of providers.

The Samaritan Health system was also considering eliminating labor and delivery units at two of its five hospitals — North Lincoln and Lebanon Community, both serving rural areas — due to resource and cost constraints. But last month, amid a groundswell of community opposition, the health care system announced it would hold off on closing the departments and explore alternatives to “ensure services remain viable.”

When Saint Alphonsus announced plans to close the Baker City maternity ward in June 2023, it pinned the decision on similar difficulties, saying it was “increasingly unsustainable” to adequately staff the obstetrics department amid nursing shortages and a decline in the number of births at the hospital.

In a statement to InvestigateWest, Andrew Whelan, a spokesperson for Saint Alphonsus, said the system is in negotiations to potentially revive the unit, although work to overcome the challenges that led to its closure “will take time and the outcome is not guaranteed.”

“We are committed to and are currently working with stakeholders to attempt to overcome these challenges if possible,” the statement continued.

Until then, Banister and her husband are weighing whether expanding their family in a maternity care desert is worth the risk.

“I was happy everything worked out for me, but then I had the frustration of like, ‘Well, what if it didn’t work out and what if something more serious happened?’” she said. “Now going into it, I’m definitely more scared.”

‘Hospitals on the brink’

Hospitals across Oregon have increasingly struggled to make ends meet since the COVID-19 pandemic, fueled in part by a growing delta between the cost of providing care and what they are actually paid.

An April report by the Hospital Association of Oregon pointed to increased labor and supply costs, the slow financial recovery after the pandemic, lagging insurance reimbursement rates, administrative burdens and longer patient stays as issues driving the imbalance.

According to the report, over the past few years nearly three-quarters of the state’s hospitals have been functioning in the red or with an operating margin of 3% or less — a difference too slim by industry standards to be considered sustainable.

An InvestigateWest analysis of financial disclosures submitted to the Oregon Health Authority shows the average operating margin among the state’s 60 hospitals was about -0.5% in 2024. Two years prior, in 2022, it was about -4.1%.

These margins are even more precarious for smaller, rural medical centers.

Rural hospitals receive fewer patients compared to their urban counterparts and typically are limited in their ability to offer specialized services, which can be more financially lucrative and offset losses in other departments.

On top of that, they have a greater reliance on reimbursements from government-funded insurance plans like Medicaid and Medicare. Both plans pay providers significantly less than commercial insurers, the Hospital Association says: Medicaid in Oregon only reimburses about 56 cents for every dollar spent on a patient’s care, while Medicare pays back 82 cents.

A high proportion of patients on Medicaid can be an indicator of a hospital’s financial vulnerability. In a June letter opposing the “Big Beautiful Bill,” U.S. Senate Democrats used this metric to identify rural hospitals across the country that could be financially devastated by Medicaid cutbacks, putting them “at-risk” of service cuts or closure. Whether a hospital had been operating with negative margins for three or more years was another factor.

Four Oregon medical centers were identified as “at-risk” in the letter. This includes Providence Seaside, which has operated with negative margins since at least 2020, according to financial disclosures.

Some rural medical centers are able to make up a portion of their operating losses through other revenue, such as grants, special federal designations that raise insurance reimbursements, or through a property tax district.

Still, Medicaid remains a financial lifeline for rural hospitals, and administrators say constricting that critical source of revenue may threaten their ability to sustain services like obstetrics at the same level moving forward.

“Obstetric units do not make money,” explained Dr. Katy Kozhimannil, a professor of health policy at the University of Minnesota. “When the bottom falls out from Medicaid financing as a small rural hospital, you can’t keep maintaining a unit that is operating at a loss.”

Senate Republicans allocated $50 billion in the “Big Beautiful Bill” to provide “immediate relief” to rural hospitals. Health and Human Services Secretary Robert F. Kennedy Jr. and Centers for Medicare and Medicaid Administrator Mehmet Oz have argued that rather than putting money toward a system that has failed rural patients, the fund would transform rural health care by focusing on technological and lifestyle tools to tackle the root causes of disease.

“$50 billion has been dedicated to transform rural health care delivery nationwide—representing a structural shift away from propping up failing models toward sustainable, long-term solutions,” Oregon Republican Party Chairwoman Connie Whelchel said in a statement to InvestigateWest, adding the fund will “finally prioritize” rural communities.

While it’s unclear exactly how the money will be divvied up, Oregon Health Authority is expecting to receive around $100 million annually through 2030 — about 4% of the anticipated cuts to the state’s Medicaid plan.

“It’s a Band-Aid on an amputation,” Sen. Ron Wyden (D-Oregon) said in remarks on the Senate floor in June.

Recent financial woes against the backdrop of broader instability was one of the primary reasons Samaritan Health had planned to downsize its labor and delivery program, CEO Marty Cahill said. The system was also looking at consolidating its urology, orthopedics and general surgery services.

“We just might not be able to [offer labor and delivery] in all five of our hospitals,” Cahill said. “We might have to start to consolidate down to a fewer number of hospitals, so that we can again provide that quality of care that we want to.”

Across the state, Wallowa Memorial Hospital CEO Dan Grigg said they are not yet talking about service cuts. But as the head of a small, independently owned medical center serving roughly 8,000 people in rural northeastern Oregon, Grigg understands the difficult decisions some hospitals may make to cut or reduce high-cost services like obstetrics.

“When it comes between closing a hospital and closing a service,” Grigg said, “you’re always going to close the service before you close the hospital.”

Growing maternity care deserts

Maternity care has increasingly been on the receiving end of cutbacks as hospitals try to stay afloat.

Since 2010, more than 500 hospitals in the U.S. closed their obstetrics units, leaving more than half of all rural hospitals and a third of all urban hospitals without the service, according to a study published in the medical journal JAMA earlier this year.

Kozhimannil, who was a lead author on the study, says there are a few reasons why a hospital might decide to shutter a maternity ward, but they all boil down to a question of resources.

Like emergency rooms, labor and delivery units need to be staffed 24/7 in the event they receive a patient in the middle of childbirth. This means hospitals need to have obstetricians, labor and delivery nurses, anesthesiologists and neonatologists regularly on-call — positions that are highly specialized and difficult to hire for, especially in rural areas.

This round-the-clock availability also translates to higher overhead costs which hospitals are rarely able to fully recoup.

For one, most simply do not receive enough patients for the department to be profitable. Kozhimannil says the average hospital needs about 200 births annually to keep their unit viable, but a third of facilities in the U.S. operate under that minimum threshold.

“We do about 50 deliveries a year and so we’re only getting paid 50 payments for those deliveries,” said Grigg, the CEO of Wallowa Memorial. “If you do 1,000 deliveries with the same standby cost, you’re getting that payment a thousand times over.”

Even then, most payments from insurance don’t cover the full cost of care for childbirth. For instance, the average reimbursement the Oregon Health Plan gave to hospitals in 2023 for a complication-free, vaginal delivery was about $8,521. The average cost for this kind of delivery in the U.S. is about $15,712, per the Peterson-KFF Health System Tracker, an initiative monitoring health care costs and quality.

“If the overall organization is still profitable … you can absorb those financial losses,” said Davis, the CEO of Grande Ronde Hospital. “If the organization has multiple years of financial losses, now all of a sudden, your criteria and the lens has changed to where you’ve got to start looking at an individual department level or service line level.”

When a hospital closes an obstetrics unit, expectant mothers often end up traveling farther to reach the closest hospital, not only for labor and delivery but also for care related to potential complications and postpartum recovery.

Studies have found this added distance lends itself to more births in riskier settings like emergency rooms, at home or in vehicles, as well as higher numbers of pre-term births. It also is associated with higher rates of maternal and infant mortality.

Davis said Grande Ronde Hospital has had a 40% increase in births since Saint Alphonsus closed its unit in 2023. Anticipating an influx of patients from Baker City, the medical center hired on extra obstetrics nurses and trained their emergency room staff and first responders about what to do in the event a laboring woman cannot reach the hospital, he added.

“Minutes matter and they really do make the difference between a mother going home with a baby in her arms and a mother going home with empty arms,” said Amanda Vinson, a registered nurse at Samaritan Lebanon’s Girod Birth Center and member of the Oregon Nurses Association.

The loss of a birth center can additionally lead to decreases in the availability of other kinds of reproductive health care, like postpartum mental health support, doula and midwife services and gynecological surgery.

“When a hospital stops providing obstetric services, those risks do not go away,” Kozhimannil said. “Those risks are still there, they’re just not borne by the hospital any more.”

Accessing care where it isn’t

When Baker City’s birth center shuttered, Shelley Payton, a local doula, tried to fill in the gap that was left.

Her role had always been to support her clients through birth by facilitating communication with their care team and providing an extra set of hands wherever necessary. But in the aftermath of the closure, she became a coordinator and confidant for women across the region.

Baker City is remote. Situated at the foot of Rock Creek Butte, the tallest peak in the Blue Mountains range, just one major highway links the town to La Grande to the west and Boise, Idaho to the east — Interstate 84. During the winter months, dangerous icy conditions regularly trigger shutdowns.

Payton said she began receiving anxious messages from women across the community who were concerned about how they would get to the hospital during a road closure, get help for potential complications or manage the cost of traveling to another city for care. The average household income in Baker County is about $58,000 a year.

One woman who ended up going to the emergency room at Saint Alphonsus told Payton the doctors there missed that she was experiencing preeclampsia — a condition involving persistent high blood pressure that can lead to serious issues for both the mother and baby if left untreated. The woman only got that diagnosis a few days later, when she was able to make it to La Grande, according to the doula.

Payton said other clients who went to Saint Alphonsus’ emergency room for possible pregnancy complications were told they could not be treated there and would need to be transported via ambulance or helicopter elsewhere.

The closure even impacted other areas of care. A mother of three told InvestigateWest she developed severe anemia after she was unable to get a timely procedure to address “uncontrollable” menstrual bleeding because Saint Alphonsus no longer provided the service in Baker City. It took another two months for her to get the procedure after she switched to another hospital.

“It’s no longer as easy as just showing up to the hospital in Baker like, ‘Yeah, I want to come in real quick and get checked out,’” Payton said. “That requires a lot more time and planning now and obviously that’s not something people want to do, especially if they’ve got a sleeping toddler at home.”

Weighing these risks, some women, like Dallas Pfeiffer, decided to temporarily relocate before their due date to be closer to a hospital.

Pfeiffer found out she was expecting a second child in the summer of 2023, shortly after the closure of Saint Alphonsus’ obstetrics unit. Having had a C-section during her first delivery, she thought picking a larger hospital in Boise would be a safer bet if something went awry.

Pfeiffer’s new doctor urged her to be in Idaho at least a week before her scheduled C-section, in case she went into labor early. Luckily, she had family nearby who were able to host her, her husband and 1-year-old daughter.

Just one day after giving birth, Pfeiffer was back in the car to make the two-hour journey back to Baker City, this time, trying to manage her newborn son and her still intense pain.

“My emotions were all over the map,” she said. “I wished that Baker was open. I wished that I could be in my own bed. … It was quite the journey of navigating, freaking out, navigating, freaking out and then finally having our baby.”

InvestigateWest is an independent news nonprofit dedicated to investigative journalism in the Pacific Northwest. A Report for America corps member, reporter Danielle Dawson can be reached at danielle@investigatewest.org.