New Florida law allowing C-sections outside hospitals could be national model

by Anna Claire Vollers, Alabama Reflector
January 29, 2025

This story originally appeared on Stateline.

A recently enacted Florida law that allows doctors to deliver babies via cesarean section in clinics outside of hospitals could be a blueprint for other states, even as critics point to the role that a private equity-backed physicians group played in its passage.

The United States has poor maternal health outcomes compared with peer nations, and hospital labor and delivery units are shuttering around the country because of financial strain. Supporters say the Florida law could increase access to maternity care and lower costs for expecting patients.

But critics, including some physician, hospital and midwife groups, warn it’s an untested model that could put the health of mothers and babies at risk. They also note that private equity firms that have made other forays into health care have attracted state scrutiny for allegedly valuing profits over patient safety.

Alex Borsa, a researcher at Columbia University whose published work focuses on private equity’s impact on health care, said he’s not surprised that Florida has become the testing ground for such clinics.

“In addition to Florida being the Wild West in a number of policy directions, it has one of the highest concentrations of private equity-backed health care operators, including OB-GYN and fertility,” Borsa said.

Traditional birth centers are typically staffed by midwives who provide maternity care for low-risk pregnancies and births. Twenty-nine such centers operate in Florida, and about 400 are licensed around the country. The focus in these centers is on natural childbirth in a homelike setting, where women labor without anesthesia and deliver babies vaginally.

Florida’s law creates a new designation, called an “advanced birth center,” that allows physicians to offer labor and delivery services at a freestanding clinic, including delivery by cesarean section. There currently are no such centers. A C-section is a surgical procedure performed with anesthesia in which a baby is delivered through an incision in the patient’s abdomen and uterus. C-sections are generally reserved for situations in which a doctor believes a vaginal birth could be risky for the mother or baby.

Prior to the law’s passage last spring, C-sections could only be performed in hospitals, which have the staffing and equipment designed for surgery and potential complications.

But a private equity-owned physician group called Women’s Care Enterprises in recent years lobbied Florida legislators for the new designation. The group, owned by London-based investment firm BC Partners, operates about 100 clinics across Florida and a dozen more in Arizona, California and Kentucky.

The new designation was tucked inside a larger health policy bill and became law despite opposition from medical and midwifery groups.

“Both mom and baby deserve access to the best possible care, which is why we believe that C-sections should be performed exclusively in the hospital setting where doctors, multidisciplinary teams, sophisticated equipment, and other critical resources are immediately available in the event complications arise,” Florida Hospital Association President and CEO Mary Mayhew told Stateline in a statement.

But the association didn’t fight the bill, which among other things increased Medicaid payments to hospitals for maternity care. Other groups did oppose it.

“We’re primarily opposed to it because you’re calling a lion a tiger,” said Kate Bauer, executive director of the American Association of Birth Centers, a nonprofit that sets national standards for birth centers.

She noted that while advanced birth centers would offer maternity care outside a hospital setting, they are not the same as traditional midwifery-based birth centers. Midwife-attended births are for people with low-risk pregnancies and tend to focus on low-intervention care and emphasize natural birthing techniques. Physician-attended births tend to rely on more advanced medical interventions, like epidurals and labor-inducing medication.

Private equity jumps in

Florida lawmakers supporting the new advanced birth center designation have said it has the potential to increase access to maternity care in underserved areas and reduce costs. Just two of Florida’s 22 rural hospitals have labor and delivery services.

The staff of Florida state Sen. Gayle Harrell, the Republican who sponsored the bill, told Stateline she was unavailable to comment on it. But in previous committee hearings, Republican legislators heralded the centers as an innovative solution for obstetrical care.

“I think what we are hearing from our medical community is the desire for options,” state Sen. Colleen Burton, a Republican, said at a December 2023 committee hearing on the bill. “And what we’re particularly hearing from are patients, from Floridians, [who want] options. And potentially this could provide a lower-cost option.”

But critics question whether OB-GYNs, already in short supply in Florida, are likely to open advanced birth centers in low-income and rural communities where a larger share of patients have Medicaid. The government-sponsored insurance reimburses doctors significantly less for maternity care compared with private insurance.

Borsa, of Columbia University, co-authored a 2020 study that found private equity-owned OB-GYN offices were more likely to be located in urban areas with median household incomes above the national average.

Private equity firms use pooled money from investors to buy controlling stakes in companies. They typically focus on boosting the value of a company before selling it within a few years, ideally at a profit. In the past decade, private equity investors have spent $1 trillion acquiring health care companies.

Borsa said he and his colleagues have found strong evidence that private equity involvement in health care “pretty consistently increases costs to patients and payers.”

“There’s a fantasy that Wall Street investors are somehow going to increase access in some of the most rural and poor parts of the country, but we haven’t seen evidence of that,” he said.

In recent years, private equity’s involvement in the health care industry has drawn public ire and legislative scrutiny. Earlier this month, for example, the U.S. Senate Budget Committee released a report detailing how private equity firms wrung hundreds of millions from struggling hospitals.

Dr. Helen Kuroki, the chief medical officer for Women’s Care Enterprises, declined to comment on its support of the new law and on when it might open an advanced birth center. Representatives have previously said they’re looking at opening a center in Tampa or Orlando.

Labor and delivery services tend to be financial losers for hospitals, thanks to low reimbursement rates, particularly from Medicaid. In rural areas, where Medicaid covers as many as half of all births, reimbursement doesn’t cover the full cost of providing obstetrical services.

If patients covered by better-paying private insurance flock to freestanding birth centers that can perform C-sections, that would leave hospitals with a higher proportion of Medicaid patients. And owning the surgical space would allow physicians groups such as Women’s Care Enterprises to keep more of the reimbursement dollars that would normally go to a hospital.

Like surgical centers — sort of

Supporters have compared Florida’s new birth center model to outpatient surgery centers, where patients undergo surgical procedures that don’t require overnight hospital stays. Patients who undergo C-sections would be able to stay overnight at the new birth centers.

But critics argue a C-section is inherently different from, say, cataract surgery or a tonsillectomy.

“We’ve seen outpatient surgery centers can be a successful health care delivery model,” said Bauer, of the birth centers association. “For me, the primary difference is that surgical birth is the only surgery where, when you’re done, you have an extra person. And it’s an extra person whose health may be compromised.”

Some Florida lawmakers expressed concern that the new centers wouldn’t be required to have pediatric specialists on hand to care for a baby if there’s a problem after the birth. The centers are required to have a written agreement with a local hospital for transferring patients with complications. And they also must follow most safety standards for outpatient surgical centers.

So far, Florida remains an outlier. Legislators in other states have yet to introduce similar bills.

But as private equity firms deepen their involvement in women’s health and other health care sectors, Borsa expects them to ratchet up their lobbying of state legislators to win favorable policy changes.

“We could see more health care lobbying, and specifically around this issue in other parts of the country,” he said. “I don’t think this is a one-off, especially if they find they can derive profits.”

Stateline is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Stateline maintains editorial independence. Contact Editor Scott S. Greenberger for questions: info@stateline.org.

Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

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Trump’s federal funding freeze leads to confusion, concern among Alabama agencies, nonprofits

by Alander Rocha, Alabama Reflector
January 28, 2025

President Donald Trump’s freeze on federal assistance created confusion and concern Tuesday among state agencies and nonprofits that depend on federal money for operations.

A spokeswoman for the Alabama Medicaid Agency said Tuesday that the agency appeared to have been locked out of its federal funding portal, though it was restored later in the day.  The Alabama State Department of Education said that at least some of its discretionary funding had been affected.

In a memo dated Monday, the White House’s Office of Management and Budget (OMB) announced a freeze on all federal financial assistance, including grants and loans. The move affected both state programs and nonprofits that depend on federal funding for programs.

The United Way of Central Alabama said in a statement Tuesday that it was “carefully evaluating” what the move meant for programs it supports — “whether it’s housing for veterans experiencing homelessness, meals for homebound seniors or support for parents raising children.”

“The federal grants we receive are crucial for services we provide in the community, and without this cash flow for an undetermined amount of time, both we and our network of funded partner agencies could face significant operational risks,” the statement said. “This freeze also jeopardizes the financial security and stability of the families who depend on these much-needed community services.”

The memo also led to widespread confusion about what the freeze meant for Medicaid, a federal program serving poor and low-income Americans. In Alabama, Medicaid covered about 1 million people – nearly 20% of the population – in 2022 and paid for more than half the births in the state. The program, considered critical for health care in Alabama, gets about 73% of its funding from the federal government.

A footnote attached to the OMB memo said it should not be “construed to impact Medicare or Social Security benefits” but did not mention Medicaid.

A separate memo from OMB on Tuesday morning said “In addition to Social Security and Medicare, already explicitly excluded in the guidance, mandatory programs like Medicaid and SNAP will continue without pause.” But White House spokeswoman Karoline Leavitt said Tuesday she was not certain about whether Medicaid was affected, according to ABC News. State Medicaid programs around the country reported difficulties accessing a federal funding portal.

“It is our understanding that access to the portal has been halted temporarily, and we are currently awaiting guidance from CMS,” Melanie Cleveland, a spokesperson for the Alabama Medicaid Agency, said Tuesday morning.

Later that day, Cleveland said “the Centers for Medicare & Medicaid (CMS) Payment Management System is now accessible.”

U.S. Rep. Terri Sewell, D-Birmingham, demanded in a post on X, formerly known as Twitter, that the administration to restore access to the portal on Tuesday afternoon.

“More than 1 million Alabamians rely on Medicaid along with the providers, hospitals, & clinics that serve them. The Trump Administration needs to restore it NOW!” Sewell posted.

Eric Mackey, Alabama’ state schools superintendent, said in a statement Tuesday that they did not believe the OMB memo “affects formula-driven programs like Title I and IDEA.” Title I provides supplemental financial assistance to school districts for children from low-income families. IDEA ensures that students with disabilities receive a free education.

“We are working closely with other state and federal agencies to secure any funds necessary to continue normal daily operations without interruption. Some discretionary grant funds will be affected,” the statement said.

A separate memo from OMB lists off the programs that will be paused temporarily while it reviews which federal spending it deems appropriate, which includes higher education grants and the Pell Grant program. The U.S. Department of Education, however, said that financial aid and student loans would not be impacted, according to CNBC. 

The Appalachian Regional Commission, an economic development partnership between the federal government and states, has also been affected by the order to freeze federal dollars.

“The ARC is complying with the pause order from OMB, and we have been communicating with OMB and working to provide them with the information they need to assess ARC’s programs and grant opportunities,” said Janiene Bohannon, communications director for the Appalachian Regional Commission.

She added that until the organization “is pausing” until it learns more from the Office of Management and Budget about the next steps.The organization operates in 37 counties in Alabama, which comprises the northern part of the state, but goes as far south as Macon County.According to the list provided by OMB, the Appalachia Regional Commission has five programs affected by the order.

Just about all the programs relate to economic development, which include the Appalachian Development Highway System funding program.

Organizations filed a lawsuit in federal court Tuesday ahead of the temporary pause taking effect. Senate Minority Leader Chuck Schumer said Tuesday morning that he’s spoken with New York State Attorney General Letitia James about a legal challenge.

Mackey cautioned against getting distracted amid a “flurry of activity” that makes “some of our educators uneasy.”

“In short, just keep having school. Let’s stay focused on teaching and learning. I assure you that we are staying on top of the situation and will pass along information as we get updates,” Mackey said.

Ralph Chapoco contributed to this report.

This story was updated at 4:37 p.m. to reflect that the federal funding portal for the Alabama Medicaid Agency became accessible late Tuesday afternoon.

Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

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Trump issues order prohibiting openly transgender service members in the military

by Ashley Murray, Alabama Reflector
January 28, 2025

WASHINGTON — President Donald Trump signed orders late Monday banning openly transgender service members from the U.S. military and suppressing any diversity initiatives, including prohibiting “un-American” concepts from military educational institutions.

An executive order published just before 11 p.m. Eastern under the title “Prioritizing Military Excellence and Readiness” expressly forbids from the armed services individuals diagnosed with gender dysphoria, widely recognized by medical professionals as the incongruence between a person’s sex at birth and experienced gender.

The new policy, which revokes a 2021 Biden administration order allowing transgender people to serve, cites “medical, surgical, and mental health constraints,” as well as character, as reasons to prohibit the specific population’s service.

According to the order: “Beyond the hormonal and surgical medical interventions involved, adoption of a gender identity inconsistent with an individual’s sex conflicts with a soldier’s commitment to an honorable, truthful, and disciplined lifestyle, even in one’s personal life.  A man’s assertion that he is a woman, and his requirement that others honor this falsehood, is not consistent with the humility and selflessness required of a service member.”

Former President Joe Biden’s 2021 policy reversed Trump’s 2018 order banning openly trans military service members. A 2019 U.S. Supreme Court decision temporarily upheld Trump’s ban.

Hegseth issuing directives

Trump on Monday night directed newly installed Secretary of Defense Pete Hegseth to “promptly issue directives for DoD to end invented and identification-based pronoun usage” and update department medical standards within 60 days.

The Pentagon referred all inquiries to the Defense Health Agency. The agency said Tuesday it needed more time to provide information on current statistics of transgender members of the military and health care costs.  

According to a 2018 report from the Palm Center, 8,980 transgender active duty troops and 5,727 reservists served in the U.S. armed forces at the time. The California-based think tank that studied LGBTQ+ bans in the military operated from 1998 to 2022.

A Military.com report in 2021 found that from Jan. 1, 2016 to May 14, 2021, the Defense Department spent $11.58 million on psychotherapy for service members with gender dysphoria. During that time, 637 service members received hormone therapy that totaled $340,000, and 243 received surgery at the cost of $3.1 million, according to the report.

Overall discretionary defense spending in 2021 totaled $742 billion, according to the Congressional Budget Office.

Criticism of order

Numerous advocacy groups denounced Trump’s order.

SPARTA Pride, a group of transgender current and former service members, issued a statement Tuesday defending thousands of transgender troops who  “currently fill critical roles in combat arms, aviation, nuclear engineering, law enforcement, and military intelligence, many requiring years of specialized training and expertise. Transgender troops have deployed to combat zones, served in high-stakes missions, and demonstrated their ability to strengthen unit cohesion and morale.”

The statement continues, “While some transgender troops do have surgery, the recovery time and cost is minimal, and is scheduled so as not to impact deployments or mission readiness (all of which is similar to a non-emergent minor knee surgery). The readiness and physical capabilities of transgender service members is not different from that of other service members.”

Members of the Congressional Equality Caucus described Trump’s order as “beyond shameful.”

“Our military has invested millions of dollars into training these brave Americans who signed up to serve their nation. Now, despite their sacrifices, President Trump is unlawfully and unconstitutionally calling for them to be kicked to the curb simply because he doesn’t like who they are,” caucus chair Rep. Mark Takano, a California Democrat, said in a statement Tuesday.

Abolishing DEI offices

Under an additional directive Monday night, the president ordered Hegseth and new Homeland Security Secretary Kristi Noem to “abolish every DEI office” within their departments and any “vestiges of DEI offices, such as sub-offices, programs, elements, or initiatives established to promote a race-based preferences system that subverts meritocracy, perpetuates unconstitutional discrimination, and promotes divisive concepts or gender ideology.”

DEI is shorthand for diversity, equity and inclusion. The Trump administration titled the executive order “Restoring America’s Fighting Force.”

Hegseth and Noem have 30 days to issue guidance on closing the offices and halting prohibited activities. They must report back to the White House on their progress in 180 days.

Among the initiatives that must cease, according to the order, are the teaching or promoting of any “divisive concepts” of race or sex at armed forces educational institutions, among other topics the order describes as “un-American.”

Last updated 11:17 a.m., Jan. 28, 2025

Alabama Reflector is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Alabama Reflector maintains editorial independence. Contact Editor Brian Lyman for questions: info@alabamareflector.com.

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