NEW YORK, NY September 19, 2003 — Former clients of the Elizabeth Seton Childbirthing Center in Manhattan are mourning the demise of the pioneering institution. It closed late last month, but the center might still be setting trends: other nurse-midwife practices around the city -- and around the country -- say economics could drive them out of business, too. With the third and final part of a series on childbirth, WNYC's Fred Mogul has more.

Uta Knablein delivered her first son, Nolan, two years ago with a midwife at the Seton Center. She gave birth in a tub, without pain-killers -- and with the recorded jazz of Gil Evans in the background.
About two weeks ago, her second son, Arden, was the last child born before the high-profile natural birthing center went out of business. Knablein wishes her son didn't have this Strange distinction....

Knablein: It was kind of a sad and happy at the end -- one side happy about Arden, and sad about the place. It was kind of melancholic, I guess.

The Seton Center was founded in 1975 and was one of the country's first independent birth centers. Born from the burgeoning Womens Movement, it relied on nurse-midwives and not physicians, though doctors were available off-site for emergencies. The center attracted headlines - and occasional celebrities. But this summer, the center lost its malpractice insurance and could only find new coverage that was prohibitively expensive. Esme Howard was a midwife at the Seton Center.

Howard: We were paying approximately $400,000. That added up to about $48 million worth of coverage. The new bids were over a million dollars for a maximum of $3 million of combined coverage.

Nationwide, midwives help deliver only about 8 percent of babies, and only a fraction of those are in free-standing birth centers such as Seton. These are especially vulnerable, because their profit margin is so slim. Midwifery practices in hospitals are much more common, but many of these, too, face possible closure -- including ones at Columbia Presbyterian and the University of Chicago Hospital. Rising insurance costs and declining payments from providers are to blame, according to Deanne Williams, of the American College of Nurse Midwives.

Williams: We have centers saying, How can we cover these premiums, and still provide the care that we want to provide? It's a very major concern, as we are hearing this not just from birth centers but from our members with practices in major hospitals as well.

Insurance companies defend the premiums. They say they're just protecting themselves and their customers from large jury awards in lawsuits. P.J. Crowley, of the Insurance Information Institute, says under-writers need to plan for the worst-case scenario.

Crowley: Even if a lawsuit is dismissed, it costs an insurance company money to defend, and the insurance company has to write insurance based on the risk, not necessarily the outcome, because any medical malpractice procedure gone wrong can result in a million-dollar verdict against the company.

Attorneys and consumer advocates dispute the figures, saying the number of lawsuits and the average pay-outs have remained relatively consistent. They point to a recent study by the U.S. General Accounting Office, which said that rising malpractice premiums have had only a limited effect on patients' ability to get healthcare. Joanne Doroshow, of the Center for Justice and Democracy, says insurers hike premiums to offset losses from their investment portfolios - leaving healthcare-providers and patients to pay the price.

Doroshow: They are being price gouged by their insurance companies. They need to focus on the real culprit here, which is an out-of-control insurance industry that does not have enough regulation.

One observer says medical practices that fail should blame their poor fortune on economic factors other than insurance, because that's just one of many overhead costs. The Seton Center offered a wide array of classes and community services which were much beloved by its constituents - but which didn't earn much money. The center had been bailed out by St. Vincent's Medical Center, a large hospital system, which was affiliated with Seton. When Seton closed, St. Vincent's effectively absorbed the practice and opened its own in-hospital birthing center, while phasing out the popular pre- and post-natal programs. Elissa Marsh is one of four former Seton midwives who now works at St. Vincents.

Marsh: This room has a queen-size bed and a tub. There's a birth ball, which women like to sit on when they're in labor. It's got some equipment, but some of its hidden away and some of it's out. There's oxygen over there. There's suction

The new center tries to avoid looking like a regular hospital room, but there's no denying the fluorescent lights, glossy linoleum floor, and anti-septic smell. Though saddened by the loss of their former workplace, Marsh and her colleagues are glad they have a place to work -- and they're worried about more than d cor. They are now subordinated to obstetricians, and they are still working out protocols with the hospital. Things like how many family members can attend births, or under what conditions women will abandon labor and receive c-sections. Midwife Esme Howard also joined the new St. Vincents practice:

Howard: The way that we functioned at Elizabeth Seton was very much as independent practitioners, and that's very important to us, to feel like we can still provide that care to our clients, because that's what they're coming to us for. In the past, they have not been coming to us for a hospital birth, not been coming to us for obstetrical care, they've been coming to us for midwifery, and that's a very different thing, and we want to be able to continue to provide that.

St. Vincent's new midwife practice is only under contract until the end of the year, when the hospital will evaluate its profitability. But the hospital has invested thousands of dollars and wants to see it succeed, one official says. Deanne Williams, of the American College of Nurse Midwives, says whether it's economic market forces or malpractice premiums, women in many places are finding fewer options for childbirth.

Williams: If you're a woman, searching for care when you're pregnant, or you're a provider trying to stay in business, you frankly don't care who's to blame -- the trial lawyers verus the insurance companies. Something needs to be fixed.

Many midwives wonder if it might be time for a career change. Esme Howard jokes that if the stock market turns around and insurance premiums don't, it might just be time to help give birth to something else: a hedge fund.