A Methodology for the Analysis of Comparability of Services and Financial Impact of Closure of Obstetrics Services

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Abstract
An analysis of seven hospitals in three communities was undertaken to examine the impact on the hospitals and the communities if one hospital in each area closed obstetrics services due to excess capacity in each community. To carry out this analysis, a methodology was developed to compare the adequacy and quality of the services in the hospitals. This analysis considered many structural and outcome measures. A second phase examined, through a patient origin study and physician survey, how patient loads would be redistributed in the future if one of the units were closed. The third phase developed methodology to analyze the current cost of obstetrics and nursery care, analyze the effects on the general services and ancillary departments if the maternity unit expanded or closed; compute the overall cost effects and analyze the impact on Blue Cross, Medicaid and Medicare reimbursement. Highlights of the findings include the following: six of the seven hospitals are currently losing a significant amount of money on obstetrics; the cost of obstetrics care had virtually no relation to the overall cost of care in the hospital; five of the seven hospitals would be in better financial condition if they closed obstetrics; and systemwide cost savings of 7-15 per cent of the cost of obstetrics care were computed if one unit per community were closed.

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