Governor Kotek secures $25 million for Oregon hospitals to protect maternity care

SALEM, Ore. (KTVZ) --  Governor Tina Kotek announced Wednesday a coordinated effort with the Oregon Health Authority and the Hospital Association of Oregon to stabilize and sustain labor and delivery services across the state.

"This partnership reflects a shared commitment to keeping care local, supporting new families, and ensuring hospitals are sustained through higher rates for maternity costs," the governor said in a news release, which continues below:

"Every Oregon family deserves access to safe, local maternity care,” said Oregon Gov. Tina Kotek. “By bringing together public and private partners, we are aligning policy and funding to keep care close to home. This investment is about more than dollars—it’s about taking steps forward to sustain the health and vitality of communities for generations to come."

Investing in Maternity Care

Recognizing that maternity care is foundational to healthy communities, the governor requested funding from the legislature to stabilize hospital operations. The Governor has directed OHA to distribute $25 million of General Funds in a targeted way following input from impacted hospitals:

• $15 million will provide stabilization payments to smaller, rural hospitals that offer maternity services. These hospitals have fewer than 50 beds and may or may not be within 30 miles of another hospital. OHA will be identifying options to match these funds federally for maximum, direct impact prior to distribution.
• $10 million, multiplied by federal match for an even greater impact, will be invested in larger hospitals through Diagnosis-Related Group (DRG) rates and is reflected in the 2026 coordinated care organization (CCO) rates.

“Hospitals are facing mounting challenges in keeping the services available that Oregonians rely on,” said Becky Hultberg, president and CEO of the Hospital Association of Oregon. “This boost in payments is a good first step toward stabilizing maternity services—especially in rural communities—and demonstrates what’s possible when state leaders and hospitals work together toward shared goals.”

Why Stabilizing Maternity Care Matters

Strong local maternity systems promote healthier starts for babies, which translates into better long-term health, educational, and economic outcomes for states and communities. Across Oregon and the nation, smaller, rural hospitals face mounting challenges in sustaining maternity services. Workforce shortages and increasing healthcare costs have forced some hospitals to close labor and delivery units, leaving families to travel long distances for care. These closures can have lasting impacts on maternal and infant health outcomes, as well as the vitality of rural communities.

The governor’s investment aims to reverse that trend by providing targeted support where it is needed most. Stabilizing maternity care requires shared responsibility among state agencies, hospitals, policymakers, and insurers. This approach will maximize state resources for hospitals while navigating federal limitations under House Resolution 1, also referred to as the “One Big Beautiful Bill.”

"Maternity care is the cornerstone of healthy communities,” said Dr. Sejal Hathi, Director of OHA. “These investments will help stabilize hospitals that provide this critical service and ensure families can continue to rely on care in their own communities. We are proud to work with the governor and our partners to make this happen."

For a list of hospitals by type, please refer to OHA’s Oregon Hospital Types document.