Newport Hospital's Birthing Center Stays Open

Brown Health Decides to Keep Newport Hospital Birthing Center Open Amid Financial Challenges

Newport Hospital’s birthing center will remain open, according to recent announcements by Brown Health officials. This decision comes as the health system faces ongoing financial pressures and continues to evaluate its operations to manage tight operating margins. The news was shared by individuals who were briefed on the decision and later confirmed by a spokesperson for Brown Health.

The announcement came just hours before a 6 p.m. rally organized by the advocacy group Moms Over Margin, which aimed to protect the birthing center. House Speaker Joe Shekarchi and potential gubernatorial candidate Helena Foulkes were among those expected to speak at the event.

In a memo addressed to employees, Brown Health President and CEO John Fernandez described the decision as temporary for now. He mentioned that a task force will be formed to assess all aspects of labor and delivery services at Newport Hospital. “We understand the concern surrounding the future of the Noreen Stonor Drexel Birthing Center,” he wrote. “While the center remains in the [fiscal year 2026] budget and is not currently scheduled to close, its long-term future will be evaluated over the next year.”

Newport City Councilor Xay Khamsyvoravong, who has been a vocal opponent of the potential closure, welcomed the decision. Earlier this month, the council passed a resolution urging Brown Health to preserve the facility, which recorded nearly 500 births last year. “We put this issue on the radar just two weeks ago and the community’s response was outstanding,” he said in a statement. “Brown Health’s planned announcement reflects that they are listening.”

Brown Health is the largest employer and health system in Rhode Island, managing several hospitals including Rhode Island Hospital, Newport Hospital, Bradley Hospital, and Miriam Hospital. For months, executives have warned about the need to consider various cuts due to what they perceive as insufficient reimbursement rates for healthcare providers in the state.

Rhode Island lawmakers increased Medicaid reimbursement rates by tens of millions of dollars in the new state budget that took effect on July 1. However, the increase was smaller than what the Hospital Association of Rhode Island had requested. Governor Dan McKee stated that his administration had been advocating behind the scenes to keep the birthing center open and praised the decision. “This is excellent news for a concerned community who, like my administration, prioritizes issues of women’s health,” McKee said.

Attorney General Peter Neronha also commended the decision but reiterated his warnings about the need for substantial increases in healthcare funding across the state. “Until we truly prioritize investment in our health care system, we can and should expect more difficult decisions about closures, decisions which may not turn out as favorably as this one,” Neronha said.

Fernandez also highlighted the financial challenges facing Brown Health. The organization has not achieved its goal of a “modest” 3% operating profit for the past decade. He noted that the health system is facing a $1.2 billion backlog of needed capital investments to upgrade facilities and IT systems. Expenses have been rising faster than revenue, he added.

Additional Cost-Cutting Measures

Beyond the decision to keep the birthing center open, Fernandez announced several other changes to cut costs. Brown Health Home Medical, which sells durable medical equipment, will close on September 5 due to financial sustainability issues. The inpatient adult psychiatry program at Rhode Island Hospital will undergo an overhaul once the ongoing strike at Butler Hospital is resolved. The program lost almost $25 million last year and needs to reduce its reliance on contract labor and reassign some staff members.

Gateway Healthcare, a major provider of mental health services, will remain open thanks to increased state funding that has eased its financial problems. However, executives will continue to seek greater operational efficiencies there. Similarly, the Samuels Sinclair Dental Center and various state programs such as prison care and clinics will continue to operate but under orders to become more efficient.

A major renovation project at Rhode Island Hospital will also be scaled back to its most essential components, relying heavily on charitable donations. The project is expected to last for a decade. “We can no longer delay critical improvements; these upgrades are vital to ensure the hospital can continue to meet the complex needs of patients and the community for years to come,” Fernandez wrote.