Over the past decade, hundreds of rural hospitals have stopped offering Labor & Delivery services, and many remaining programs face financial and operational challenges. Drawing on case studies from previous Stroudwater Associates engagements, this resource details three strategies that may bring a Labor & Delivery program closer to sustainability and prevent unnecessary closures in rural areas. 

These strategies ensure that Critical Access Hospitals and rural hospitals understand how to properly:

• Allocate costs and statistics in the Medicare Cost Report to maximize the value created by the Labor & Delivery program.
• Evaluate the contribution margin of the program.
• Leverage other opportunities, such as partnerships and family practice obstetricians, to enhance the efficiency of the program.

This resource is for use by Critical Access Hospital CEOs and CFOs, and State Flex Programs can share this with their hospitals to support informed decision-making and optimize resource allocation to improve financial sustainability and ensure continued access to Labor & Delivery services in rural communities.