Franklin, Ind.-based Johnson Memorial Health said it plans to phase out obstetrics services and the maternity care center on its Franklin campus. It will also take added steps to cut costs, which includes employee reductions, according to a Feb. 6 news release.
JMH pointed to decreasing federal and state insurance reimbursement rates, and coverage and rising service costs. The health system’s president, CEO and vice president of medical affairs David Dunkle, MD, said the process to phase out the maternity care center is expected to take multiple months.
The service closure points to a larger crisis in Indiana healthcare, with operating margins falling to 1.9% in 2025 while national averages were 2.6% at the time.
Medicaid also reimburses Indiana hospitals at 57% of care costs, with Medicare covering 82%. Around 70% of JMH’s patients use those government programs. Fifteen Indiana hospitals have closed their obstetrics departments since 2020, with nine total hospital closures in the state over the last 10 years, the release said.
“Decisions like staff reductions and cost cuts are among the hardest any organization ever has to make,” Dr. Dunkle said in the release. “They affect people we value deeply, and that is not lost on me or our leadership team. At the same time, taking these difficult steps now is necessary to stabilize our organization, strengthen our foundation, and ensure Johnson Memorial Health remains independent and well-positioned for the future.”
