Oregon Moves to Rescue Local Maternity Care as Rural Hospitals Face Growing Strain
Oregon Governor Tina Kotek announced yesterday that the Oregon Health Authority (OHA) has been directed to allocate $25 million to support the coordinated effort between OHA and the Hospital Association of Oregon to stabilize and sustain labor and delivery services across the state.
Source: Oregon Health Authority news release dated January 20, 2026
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Oregon Allocates $25 Million To Maternity Services
To stabilize and sustain labor and delivery services across the state, state health and hospital leaders united to keep care local and strengthen community health.
The governor requested funding from the legislature to stabilize hospital operations. She directed OHA to distribute $25 million of General Funds in a targeted way following input from impacted hospitals.
Governor Kotek said:
“Every Oregon family deserves access to safe, local maternity care.”
The OHA funding will go towards:
- $15 million for stabilization payments for smaller, rural hospitals that offer maternity services. This applies to hospitals with fewer than 50 beds, whether or not they are within 30 miles of another hospital, but OHA will identify options.
- $10 million for larger hospitals through Diagnosis-Related Group (DRG) rates as reflected in the 2026 coordinated care organization (CCO) rates. The funding is multiplied by the federal match.
Governor Kotek said that by bringing public and private partners together, policy and funding can be aligned to keep care close to home.
This approach will maximize state resources for hospitals while navigating federal limitations under House Resolution 1, also known as the “One Big Beautiful Bill.”
A list of hospitals by type is available in the Oregon Hospital Types document.
This is the quick guide to the hospital type labels OHA uses when it lists facilities by category:
| Designation | Count in Oregon | What it means |
|---|---|---|
| DRG | 26 | Typically large urban hospitals receiving Medicare DRG based reimbursement |
| Type A | 12 | Small hospitals with 50 or fewer beds located more than 30 miles from another hospital |
| Type B | 20 | Small hospitals with 50 or fewer beds located within 30 miles of another hospital |
Oregon Maternity Services Face Mounting Challenges
Becky Hultberg, president and CEO of the Hospital Association of Oregon, confirmed that “Hospitals are facing mounting challenges in keeping the services available that Oregonians rely on.”
Hultberg said that the additional $25 million is a good first step toward stabilizing maternity services—especially in rural communities. Strong local maternity systems promote healthier starts for babies, leading to better long-term health, educational, and economic outcomes for states and communities.
The funding comes in the wake of reported closures of two rural labor and delivery units since 2020 and 10 rural hospitals with no Labour-and-Delivery in 2025. Saving Rural Hospitals reports that the median driving time was around 37 minutes and the median time to an alternative Labor-and-Delivery hospital was 51 minutes in December 2025.
Source: March of Dimes PeriStats Oregon key findings on maternity care deserts and access
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A separate report indicates that 8.3% of counties are defined as maternity care deserts, and 5.1% of women had no birthing hospital within 30 minutes. The governor’s investment aims to reverse this trend by providing targeted support where it is needed most.
Dr. Sejal Hathi, Director of OHA, confirmed that “Maternity care is the cornerstone of healthy communities.”