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Palo Alto Online

Publication Date: Wednesday, October 08, 2003

Stanford midwife practice faces end Stanford midwife practice faces end (October 08, 2003)

Lack of profit forces clinic closure

by Nisha Ramachandran

After nine years of service and more than 1,000 babies, Lucile Packard Children's Hospital plans to close its midwifery service at the end of this year. The move has saddened women who were counting on giving birth the natural way at the hospital.

A statement released by the hospital pointed to the service's low revenues as the primary reason for the closure: "As with many healthcare services, reduced reimbursements, lost HMO contracts, and increased malpractice expenses have resulted in the program operating at a loss for the past three years."

The midwife service started in 1994 aiming to provide the community with more choices for delivery care. Midwife care differs from traditional obstetrics service in the amount of time care-givers spend with expecting mothers, both before and during the birth.

"It's a different model of care," said Elizabeth Green, director of Blossom Birth Services in Palo Alto, which offers childbirth education and training, but not midwife services. "Midwives look at birth as a normal life event, but there tends to be more of a view that birth must be monitored and is a medical process by OB-GYNs (obstetrics/gynecology doctors)."

Under the supervision of the Obstetrics/Gynecology department at Stanford Medical School, the service was staffed by certified nurse midwives, who provided both prenatal care and delivery services to expectant mothers. Certified nurse midwives, the only kind allowed to practice in hospitals, have graduate degrees in nursing and training in midwifery.

"Our objective was to develop a high-quality hospital-based service which would be under the supervision of the [OB-GYN] department," said Dr. Maurice Druzin, an OB-GYN professor at Stanford Medical School, who helped develop the program in 1994. As required by the state of California, doctors in Stanford's OB-GYN department would act as backup for any cases, such as caesarean sections, which nurse midwives are not licensed to handle.

This model of care, however, proved to be financially unfruitful. The program was plagued with budgetary problems from the beginning and three years after the service began, it was threatened with closure.

Up to that point, the OB-GYN department at Stanford had paid the salaries and benefits of the midwives employed at the clinic, but demand for the service and volume of patients was not high enough to support this expenditure. As a result, the service cut back on the midwife staff, no longer guaranteeing 24-hour labor and delivery service, which reduced enrollment in the program even further.

However, an outpouring of support from the local community saved the clinic from closure and in 1997, Stanford and the midwifery service came up with another model of collaboration. The midwives formed their own private practice, relieving Stanford of the responsibility for their salaries and benefits. The OB-GYN department however, continued to support the service by giving them building space and guaranteeing them monthly funding.

"Everybody has been very supportive of this program," Dr. Druzin said.

Despite the new arrangement, financial problems continued to haunt the service. The service became part of the Johnson Center for Pregnancy and Newborn Care at Lucile Packard when Stanford's obstetrical services shifted to the children's hospital, but this new support was not enough to make up for the service's deficits.

Part of the problem was the income the midwives drew as highly trained nurses. But another problem the service faced was a shift in its client base and their insurance plans, according to Stanford.

"The pay and mix of patients moved from a more favorable pay and mix, patients with good insurance being the majority of patients, to slowly over time as the economy worsened, a lot of patients without good insurance," said Druzin.

This meant that the group faced lower reimbursement rates for its services and was forced to rely on Stanford and Lucile Packard for its survival.

As the economy deteriorated, the OB-GYN department at Stanford found itself facing its own budget crisis, one that made it difficult to continue supporting the midwifery service as it had in the past. Four months ago, the department presented two options to the service: Either stop the 24-hour coverage and have the OB-GYN physicians cover for off-duty midwives or Stanford would have to cut the monthly stipend to the clinic by half, causing layoffs at the service.

According to Druzin, midwives at the clinic opposed both options because they felt the changes would undermine the quality of care they could provide. The service offered a third option to have OB-GYN re-incorporate the midwives and put them on its payroll as they had previously been, but the department rejected the idea, saying it wasn't economically feasible.

"I really feel like both sides worked in good faith to try and find a way to keep the service financially viable," said Linda Walsh, co-director of the midwifery service.

"For the nine years we've been here [we] have had an excellent working relationship with the medical staff at the Johnson Center."

Walsh would not comment on the negotiation process.

Although the clinic will officially close in January, it has already started scaling back its hours. The clinic is only open part-time, from 8 a.m. to 5 p.m. Women who go into labor after-hours will be directed to an obstetrician at Lucile Packard.

"It's a sad day for Stanford and the [OB-GYN] department because we believed we developed an outstanding program," Druzin said. "It was a great alternative model for patients and we strongly felt it provided the best midwifery service on the Peninsula."

"Unfortunately, the harsh realities of (the) health-care industry, declining reimbursement and ever-escalating costs made it a non-workable model."

In spite of the Stanford clinic closure, independent midwives continue to practice in the area. A list can be found at Blossom Birth Services' Web site at

Nisha Ramachandran can be reached at


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