USC Verdugo Hills Hospital in Glendale is closing its maternity ward and neonatal intensive care unit in November – the second local hospital to do so this year as hospitals grapple with lower birth rates, staffing shortages and higher costs.

The closure announcement, which came last month, affects about 70 employees that have been staffing the 18-bed unit. In a notice posted on the hospital’s website, expectant mothers are referred to other local hospitals in the Glendale-Pasadena area or USC Arcadia Hospital in the San Gabriel Valley.

A statement provided to the Business Journal from the USC Keck School of Medicine, which runs the hospital, cited changing demographic factors that prompted a reexamination of hospital services.

“This decision is based on a careful and thorough examination of the hospital’s services and the shifting demographics and needs of the community it serves,” the statement read.

The closure takes effect on Nov. 20. Hospital executives in the statement promised to assist affected hospital staff in their next steps, but gave no details on how many of the affected 70 employees would be reassigned within the USC Keck hospital network or let go.

Not the only closure

The notice from USC Verdugo Hills Hospital follows an announcement back in February that Adventist Health Simi Valley Hospital would shut down its maternity and neonatal intensive care services in May. That closure impacted about 50 employees.

Overall, nationwide, some two dozen hospitals have shuttered their maternal and neonatal intensive care services since the beginning of the year, according to a survey last month from hospital industry publication Becker’s Hospital Review.

Hospital executives at Adventist Health Simi Valley were more specific about the reasons for the closure of their maternal and neonatal services.

“Hospital births have declined by 25% at Adventist Health Simi Valley, and the hospital can no longer sustain these services,” the announcement said.

The announcement went on to note that births in Ventura County had declined to 10.5 for every 1,000 residents from 19 per 1,000 residents in 1990.

“We are looking at the changing demographics of our community and making an adjustment to meet the growing needs of a more senior population,” said Jennifer Swenson, president of Adventist Health Simi Valley Hospital, said in the announcement.

The demographic trends are impacting maternity services at hospitals throughout the region, according to Adam Blackstone, spokesman for the Hospital Association of Southern California.

But Blackstone cited several other reasons for the decisions to shutter maternity and neonatal services, including staffing shortages and low reimbursement rates from Medi-Cal, the state’s Medicaid program for low-income patients.

On the staffing shortages, Blackstone gave as an example a looming shortage of obstetricians who provide pregnancy care, help deliver babies and also care for mothers and babies immediately after birth.

“Many hospitals are currently facing a shortage of obstetric staff,” Blackstone said. “By 2030, the state is projected to experience a shortage of more than 1,100 obstetricians.”

With these shortage conditions, not only are obstetricians harder to find, but when hospitals do hire them, they have to pay more for their services.

He also noted that in general, maternal and neonatal services are the second-most expensive departments at local hospitals, second only to emergency departments/trauma centers.

“They need 24/7 staffing, specialized equipment and dedicated spaces,” he said.

Some hospitals, he added, look at these expenses and also at the long-term decline in birth rates and conclude it’s not worth keeping the maternity and neonatal services departments open.

But Blackstone cited yet another factor: persistently low reimbursement rates from Medi-Cal. Roughly one-third of all residents in the county are eligible for Medi-Cal, so this hits most hospitals.

“Medi-Cal reimbursement rates are often five times lower than those of commercial plans, making this model unsustainable for many hospitals,” Blackstone said.

According to the statements from both hospitals, one other demographic trend is in play: as the region’s population ages, hospitals are putting more staffing and other resources into senior care. While neither hospital said this outright, this trend likely means that some of the nursing staff that have been in the maternal/neonatal services departments are being shifted to care for senior patients.

Fewer hospitals offering maternal/neonatal services

As more hospitals close their maternity services and neonatal intensive care departments, these services end up being consolidated at fewer hospitals. While Blackstone noted that high volumes of patients for these services at these remaining hospitals help them cover the soaring costs, the net effect is that many expectant mothers about to give birth have to travel farther.

Both USC Verdugo Hills Hospital and Adventist Health Simi Valley Hospital in their statements posted on their websites gave information on nearby hospitals offering maternal and neonatal services.

“During this transition, USC Verdugo Hills Hospital is working to ensure that patients and their families continue to receive high-quality obstetric care close to home,” that hospital’s statement said.

For USC Verdugo Hills Hospital, these alternate hospitals include Glendale Memorial, Adventist Health Glendale, Huntington Hospital in Pasadena and USC Arcadia Hospital.

For Adventist Health Hospital Simi Valley, expectant mothers needing care and delivery services are now referred to Los Robles Regional Medical Center in Thousand Oaks, St. John’s Regional Medical Center in Oxnard and Northridge Medical Center.