Dr. Kathy Hebard delivered a dire warning before the local health board two years ago, declaring that the dwindling number of OB-GYN providers left in Kitsap County were barely holding their heads above water.
Little has changed since, and Hebard’s own practice, Kitsap OBGYN — a three-decade-old business that employs a large portion of the remaining OB-GYNs in Kitsap County — continued living “paycheck-to-paycheck.” Exactly when they would have closed she could not specify, but before the Suquamish Tribe stepped in and acquired the practice it appeared imminent.
“It’s a dwindling system and you can only tighten your belt so much,” Hebard said about a month after the acquisition was announced. “It was necessary for us to find a partner so our practice could remain open.”
Moving under the tribe’s umbrella is a “gift” Hebard says will keep essential health care accessible to women in Kitsap County. It shields her practice from the economic realities that have made it exceedingly difficult for OB-GYN businesses to remain financially solvent.
What's behind OB-GYN clinic struggles in Washington?
Decisions at the federal and state levels around insurance continue to undervalue obstetrics care, providers say, with compensation models often failing to create sustainable revenue. Reimbursement rates for pregnancies — what insurance providers pay doctors for the care they deliver — are often below what it actually costs to provide that care.
Caring for patients covered by Medicaid, the state-federal insurance program for Americans with low incomes, is a particular challenge. Over a third of all births in Washington are covered by a government program, according to data from nonpartisan health nonprofit KFF. Washington maintains strong policies in place to make sure all pregnant women get access to Apple Health, the state’s version of Medicaid, during their pregnancy.
The problem for providers is that they lose money on each Medicaid patient they care for. To survive, some have started capping the number of Medicaid patients they see each month, a move that limits access to a large swath of the population and makes it more difficult for them to get sufficient prenatal care.
“There are groups all over the state that cap how many Medicaid patients they take to X number of due dates per month, because they’re losing money on each one,” said Dr. Vivienne Meljen, a Vancouver-based OB-GYN and state medical association board member. “I’ve heard an estimate from one group that they lose about $600 minimum per Medicaid delivery.”
What doctors get paid is largely decided by insurance companies. Providers are unable to simply raise those rates or charge more if they fall short. Medicaid and many private insurance companies set their rates using Medicare, the government insurance program for those 65 and over. Those rates are adjusted annually.
Medicaid rates in the state are set by the Washington State Health Care Authority, with federal matching. Pregnancy care, including a dozen prenatal visits, delivering a baby and providing aftercare to the mother, is billed globally at around $2,400, according to online data. Providers get paid in a lump sum for this care, rather than billing by services or hours, which can fluctuate widely by pregnancy. Providers say this method often fails to accurately compensate them.
“That's what runs your clinic and pays your medical staff and your front desk staff and keeps the lights on,” Meljen said. “It's insufficient to cover the actual delivery of those services with all the visits that it takes to have a baby.”
Rachelle Alongi, a spokesperson for the authority, said they would start work in the coming months to review clinical policy for pregnancy care and “explore alternatives to the single global code, so it can more accurately reflect the services providers deliver.”
Insufficient reimbursements most acutely affect providers in rural areas, where rates of Medicaid coverage tend to be higher, and independent practices, like Kitsap OBGYN, which prior to the acquisition lacked the financial backing of a larger organization. However, even large hospital networks have closed their labor and delivery units.
Other factors have influenced Kitsap's market
Kitsap County has seen this consolidation firsthand. Citing declining birth rates and staffing shortages, Naval Hospital Bremerton closed its labor and delivery unit in 2022, putting even more stress on the civilian health sector. The hospital, once responsible for delivering roughly a quarter of the county’s children, maintains what it calls an OBGYN-navigator, which helps military families and their dependents find care in the community.
The loss of these providers means caring for pregnant women is increasingly falling on fewer and fewer physicians. There is a nationwide shortage of OB-GYNs, including in Washington. According to the most recently available data, there are about 13 physicians per 100,000 residents in Washington. Kitsap and Mason both had six per capita, while neighboring Pierce had 12.
Providers say the nature of their work is failing to attract new doctors. It tends to be demanding, requiring 24/7 availability and often over 40 hours per week. OB-GYNs, they note, are also among the most frequently sued medical specialties.
“Who wants to stay up all night, delivering babies and getting sued?” Hebard said. “It’s not a very appealing benefits package.”
Given the tough financial reality facing OB-GYNs, Hebard said it was "extraordinarily fortunate" that they connected with the Suquamish Tribe. Kitsap OBGYN never capped or restricted the number of Medicaid patients, hoping to keep care available to everyone, she said. The Tribe shares that mission.
“They have no interest in narrowing who gets to be seen and who has access to care,” she said. "Their same philosophy on not turning people away meshed with ours. It’s a really excellent union and we’re excited about it.”
Conor Wilson is a Murrow News fellow, reporting for the Kitsap Sun and Gig Harbor Now, a nonprofit newsroom based in Gig Harbor, through a program managed by Washington State University.
