Middle Tennessee’s population of young adults is climbing. And so is the amount of money being invested in obstetrics care by local hospitals.
“Obstetrics on a per-delivery basis doesn’t reimburse like cardiac or neurosurgery. The program must attract great numbers of women for it to be feasible,” said Bernie Sherry, president and CEO of Baptist Hospital in Nashville.
Until about four years ago, industry sources say, reimbursement policies resulted in local hospitals losing, on average, a small amount of money for each baby delivered. Hospital officials in the Nashville area now report either breaking even or earning a slight profit for each baby.
But as in any business with low profit margins, revenue growth – which funds expansion and improvement of services – depends in large part on volume and provision of specialized services.
Local hospitals have in recent months announced intentions to invest in facilities geared to help troubled pregnancies, which typically happen to attract the most patients from out of town.
In May, a certificate of need was approved by Tennessee's Health Services and
Development Agency for Centennial Medical Center – which is owned by HCA TriStar Health System – to expand and renovate the hospital’s Neonatal Intensive Care Unit (NICU) with the addition of 20 beds to the hospital’s existing 40.
In July, the same agency approved a certificate of need filed by Baptist, granting permission for the hospital to embark on a $9.6 million expansion that will nearly double the number of beds in its NICU from 27 to 52 beds. Both the Centennial and the Baptist expansions are expected to begin this winter.
And last week, Vanderbilt University Medical Center announced that it is considering a $203 million expansion of its Monroe Carrell Jr. Children’s Hospital that includes increased capacity for obstetrics, much of which is intended to feed into the hospital’s programs for troubled births.
“There are excellent hospitals in this city that deliver newborns in uncomplicated deliveries,” said Kevin Churchwell, CEO of the Children’s Hospital, in an interview last week.
Plans for the addition – which will be formally presented to Vanderbilt’s board of directors no earlier than next summer – include 72 to 96 pediatric beds, 36 neonatal intensive care beds, 36 obstetrical beds, a newborn nursery, 16 to 20 labor and delivery rooms, and five to 10 operating rooms.
As the facility grows, Churchwell said, obstetrics beds will likely be added. But much of that growth is being developed to accommodate troubled pregnancies.
“We’ve been identifying the need for expansion for the last two years or so,” Churchwell said. “We want to do it right.”
Development of local hospital programs for troubled births, when combined with Davidson County’s growing population of young adults, indicate that ever-increasing numbers of babies likely to be born in the Nashville area in coming years.
Nashville’s population of men and women ages 25 to 35 grew by 6.3 percent from 2000 to 2005, while the rest of the nation was projected to grow by only 0.2 percent, according to the Nashville Area Chamber of Commerce.
Births to Davidson County residents have also climbed. The most recent local birth data tabulated by the Metro Public Health Department of Nashville/Davidson County dates back to the end of 2005, when figures appear to have begun to jump. After hovering in the low- to mid- 8,000’s range since 1990, the number of babies born to Davidson County residents grew to 8,900 in 2000, inched up to 9,005 by 2004, then reached 9,409 in 2005.
These figures likely fall short of delivery numbers for Nashville hospitals, where a large number of births take place in families from out of town. Baptist Hospital reports having delivered almost 7,000 babies last year. Vanderbilt University Medical Center reports 3,000 births. And Nashville General Hospital at Meharry delivered 1,200.
Hospitals expect those figures to increase in coming years. TriStar anticipates delivering 8,000 babies at all its area hospitals in 2007, a 3.5 percent increase over 2006. Baptist and the Middle Tennessee Medical Center of Murfreesboro – the only two local facilities with obstetrics units owned by Baptist parent company St. Thomas Health Services – together expect to reach the 10,000-delivery mark soon.
Births at Nashville General in 2007 are nearly double 2006 figures, as several VUMC-affiliated clinics began delivering babies there this year, said hospital spokesperson Judith McCoy. Though the hospital is a safety net facility for the area, often used by patients without access to private insurance, McCoy said publicly funded reimbursement for births is sufficient to prevent Nashville General from losing money on each delivery.
“It’s not a drain or a hardship on us,” McCoy said. “It’s kind of a break-even point.”
As mothers and families take on increasingly active roles in their delivery choices, hospitals are challenged to rise to the occasion by providing constantly improved facilities and medical care. Obstetrics, according to Baptist’s Sherry, is a consumer-driven field.
Families happy with their deliveries are likely to stay loyal to hospitals in the years that follow, for needs ranging from pediatric care to women’s health.
“Once you create a positive experience for the woman delivering a baby, you’re likely to have them come back,” Sherry said.