Building a Birth Center That Lasts: 9 Steps to Financial Sustainability

Opening a birth center is an incredible achievement that represents countless hours of planning, passion and dedication to improving maternal care. But here's the reality many birth center founders face: staying open is often more challenging than opening in the first place.

Too many exceptional birth centers close their doors not because they provided poor care, but because their financial foundations weren't strong enough to weather the inevitable challenges of healthcare entrepreneurship. If you've ever found yourself thinking, "I'm a midwife, not a CFO," you're certainly not alone in that thought.

The encouraging news? You don't need an MBA or years of business school to build the financial stability your birth center needs. With intentional planning and strategic action, you can create a robust foundation that protects your team, serves your clients and preserves your vision for years to come.

The Three Pillars of Birth Center Financial Health

Sustainable birth centers are built on three fundamental pillars that work together to create long-term viability. Let's explore each pillar and the specific steps that will strengthen your center's financial position.

Pillar 1: Strengthen Revenue & Reduce Risk

Step 1: Conduct a Service Line Profitability Audit

Knowing your client volume is important, but understanding which services actually sustain your bottom line is critical. Take time to analyze the revenue and expenses associated with each service you offer, including births, prenatal visits, lactation consulting, well-woman care and educational classes.

This analysis matters because without clear financial visibility, you might unknowingly invest significant time and resources into services that actually lose money. The data you uncover will guide smarter business decisions moving forward.

Action item: If your electronic health record system or accounting software doesn't provide service-specific reports, work with your bookkeeper or accountant to categorize birth center revenue and expenses by service line. This investment in data analysis will pay dividends in birth center financial sustainability.

Step 2: Diversify Revenue Streams and Maximize Your Space

Depending solely on birth services creates unnecessary financial vulnerability. By thoughtfully adding complementary services and maximizing your physical space utilization, you can create more predictable income streams.

Consider these revenue diversification opportunities:

• Lactation consulting and support groups

• Group prenatal care models (aka centering)

• Mental health and postpartum support services

• Leasing space to aligned practitioners like chiropractors, pediatricians, or massage therapists

• Creative use of outdoor space for non-clinical businesses (where zoning and lease agreements permit)

Even modest sublease income can significantly help cover overhead expenses and smooth out seasonal fluctuations in birth volume.

Action item: Walk through your facility and identify underutilized spaces or time slots that could generate additional revenue.

Pillar 2: Optimize Operations & Staffing

Step 3: Join Professional Learning Communities

Connection with other birth center professionals isn't just about networking—it's about survival and growth. Organizations like the American Association of Birth Centers (AABC) and state midwifery associations offer business-focused learning collaboratives that provide invaluable resources.

These communities help you benchmark your financial performance, share successful payer negotiation strategies, and stay ahead of regulatory changes that could impact your operations. You don't need to reinvent solutions that other centers have already developed and refined.

Action item: Commit to participating in at least one birth center business webinar or collaborative per quarter and make it a practice to share key takeaways with your team.

Step 4: Balance Staffing Ratios

Staffing represents both your largest operational expense and your most critical investment in quality care. Finding the right balance prevents staff burnout, reduces costly overtime, and maintains the high standard of care your clients expect.

Overstaffing drains precious financial resources, while understaffing leads to provider fatigue and turnover—both scenarios are costly for your center's sustainability and reputation.

Action item: Use your scheduling software or EHR system to analyze client volume patterns against staff coverage by shift. Look for consistent overtime patterns or coverage gaps, then adjust schedules or consider adding flexible part-time positions as needed.

Step 5: Invest in Smart Technology

While many midwives rightfully pride themselves on honoring traditional practices and avoiding unnecessary medicalization, don't let that philosophy prevent you from embracing technology that genuinely improves your bottom line, staff satisfaction and client experience.

Consider these technology investments:

• Compliance management applications that track staff certifications and policy updates

• Advanced scheduling platforms that reduce no-shows and optimize on-call scheduling

• Financial and clinical dashboards that provide real-time insights into denial rates, staffing efficiency, and service profitability

Before making any technology investment, ask yourself: Does this tool help generate revenue, reduce costs, or minimize risk? If the answer isn't a clear yes, reconsider the purchase.

Action item: Identify the biggest administrative bottleneck and research technology solutions that could address that specific challenge.

Pillar 3: Build Financial Resilience

Step 6: Negotiate at Least One Payer Contract Annually

Predictable and fair reimbursement forms the backbone of financial sustainability. Make it a yearly practice to request contract reviews with your insurance partners, advocating for higher global maternity rates or improved reimbursement for ancillary services.

Action item: Use your billing software to track denial patterns and late payments, creating a data-driven case for contract improvements when you enter negotiations.

Step 7: Monitor Denial Rates Monthly

Denied insurance claims represent hidden revenue leaks that can significantly impact your financial health over time. Monthly tracking helps you quickly identify whether issues stem from coding errors, documentation problems, or problematic payer policies.

Action item: Most practice management systems include denial rate reporting. If yours doesn't, create a simple denial tracking spreadsheet that you update weekly with basic denial data.

Step 8: Establish a Robust Financial Reserve

Financial advisors typically recommend maintaining three to six months of operating expenses in reserve, with six months being ideal in the healthcare sector. This financial cushion protects your center against delayed reimbursements, unexpected staffing costs, equipment failures, or regulatory changes.

Action item: Set up automated transfers that move a predetermined percentage of monthly revenue into a dedicated reserve account until you reach your target amount.

Step 9: Maintain Current Policies and Procedures

Healthcare regulations and accreditation requirements evolve continuously. Regular policy updates ensure your center stays aligned with best practices and protects you during audits or inspections.

Action item: Schedule quarterly policy reviews, using these sessions as financial checkpoints to ensure your refund, late payment, and charity care practices support your sustainability goals.

Your Action Plan for This Month

Ready to start strengthening your birth center's financial foundation? Here are four concrete steps you can take this month:

1. Audit your service line profitability — Generate a report from last month to understand which services are most profitable

2. Identify one new revenue opportunity — Brainstorm a service or partnership you could pilot this fall

3. Analyze recent denial patterns — Review the past 90 days of billing data to identify your top denial cause

4. Open a dedicated savings account — Begin building your financial reserve with automatic monthly transfers

Why Financial Sustainability Matters for Birth Centers

Birth centers serve as more than healthcare businesses—they represent lifelines for families and anchors for communities seeking personalized, respectful maternity care. Strong financial systems ensure your mission can endure and expand over time.

By implementing these nine strategic steps, your birth center will be positioned not just to survive the challenges of healthcare entrepreneurship, but to thrive, adapt, and serve families for decades to come.

As Dave Ramsey wisely noted, "You must gain control over your money or the lack of it will forever control you." Take control of your birth center's financial future and secure the foundation that will allow your vision to flourish.

Which of these nine steps is your birth center focusing on right now? We'd love to hear about your experiences and insights—sharing your journey might be exactly what another center needs to hear.