July 15 (Bloomberg) -- Requirements for wider hallways, janitor closets and back-up generators will likely be the downfall of Amy Hagstrom Miller’s abortion business in Texas.
Texas lawmakers last week approved a law requiring that abortion clinics become hospital-like outpatient surgical centers, with detailed rules for how the buildings are designed. Owners of the state’s 36 clinics, including five run by Miller, would need to spend millions of dollars to comply -- adding features such as showers, single-sex locker rooms and special airflow systems -- or either relocate or shut down.
“Comments about how abortion providers have enough money to just build these facilities are bogus,” Miller, 46, said via e-mail. “Over the past 10 years all we’ve done is grow, and I’m proud of what we have built. We did our first layoff yesterday and it was heartbreaking.”
Clinic operators around the state are now forced to consider whether they can pay the bill. Even if they succeed, providers face another hurdle under the new law: Their doctors are required to gain admitting privileges at a nearby hospital. Clinics’ ability to comply will determine whether women can obtain legal abortions in the state.
Texas would become the largest and most-populous state to approve comprehensive clinic regulations once the measure is signed by Republican Governor Rick Perry, a supporter. It’s part of a widening thrust by abortion foes in Republican-led states to make it harder for women to obtain abortions by cracking down on providers. Texas already had abortion laws aimed at patients, such as a mandatory 24-hour waiting period between consulting with a doctor and undergoing the procedure.
In the past few years, similar structural requirements for clinics have been blamed for closings in Virginia and Pennsylvania. North Carolina lawmakers are considering giving state health officials the power to impose similar rules.
Opponents of the Texas measure, approved after weeks of debate and protests, said it’s designed to end legal abortion. Supporters said it improves the quality of care.
“The first goal of this legislation is to increase safety for women,” said Abby Johnson, legislative director of Americans United for Life, a Washington-based group that drafts model anti-abortion legislation for states. “Our second goal is to reduce the number of abortions. It shouldn’t be that easy to get an abortion.”
Perry denied that most abortion facilities will close because of the law during an appearance on CNN’s “State of the Union” program yesterday. “History will prove” that assertion is wrong, he said.
Twenty-six states require abortion clinics to meet at least some structural standards equivalent to those for surgical centers, according to the New York-based Guttmacher Institute, which researches and compiles reproductive health data. The regulations nationally vary widely and in some cases haven’t been fully implemented.
Texas was already counted among the 26 states because of a 2004 law requiring abortions past 16 weeks be performed in surgical centers.
Other laws have been challenged in court. In Kansas, structural requirements have been blocked since 2011 and are still in litigation, said Kate Bernyk, a spokeswoman for the Center for Reproductive Rights, which fights abortion laws in court.
Advocates of clinic regulations often point to safety concerns, citing rogue providers like Kermit Gosnell of Philadelphia, who was convicted of murder in May after a trial that detailed his unorthodox late-term abortion methods at an unsanitary facility.
In that case, emergency workers were delayed because the hallways were too narrow for a stretcher, showing the need for the requirements, said Kristi Hamrick, a spokeswoman for Americans United for Life.
Doctors such as Gosnell are the exception, according to data from Guttmacher, which favors abortion rights. Fewer than 0.3 percent of abortion patients experience a complication that requires hospitalization, according to data cited by the organization.
“A wave of laws is now bluntly focused on driving providers out of business via a thicket of regulations designed not to benefit patients but, as some of their proponents admit openly, to make it impossible for many providers to come into compliance,” said Rachel Benson Gold, director of policy analysis for Guttmacher, in a report last month. The laws “are a solution in search of a problem.”
While Planned Parenthood is the largest single provider of abortions in the U.S., most women undergo the procedure at independent clinics, which function more like local small businesses. Unable to access the same government grants, tax-exempt donations and political clout, they often have a harder time affording renovations required by recent state laws.
Most won’t be able to afford the cost, said Charlotte Taft, who runs the Washington-based Abortion Care Network, which represents independent providers nationally.
Building a new surgical center with four operating rooms would cost $6 million to $8 million, said Jason Cagle, chief financial officer for United Surgical Partners International, which operates 64 centers in Texas, more than any other company. Abortions aren’t performed at the Addison-based company’s facilities.
“A clinic is much less,” Miller said. “I just bought the Fort Worth clinic last year for $398,000. It is 4,000 square feet and in the same city, two miles apart, from where Planned Parenthood just built their surgical center for $7.5 million.”
In 2004, when Texas required abortions past 16 weeks be performed in surgical centers, none of the clinics could comply. Now, six facilities around San Antonio, Dallas and Houston meet the standard.
Fewer than 2 percent of the 72,470 Texas women who had abortions in 2011 were pregnant for more than 16 weeks, according to the most recent data available from the state Department of Health and Human Services.
Miller, the chief executive officer of Whole Woman’s Health, operates a surgical center that performs abortions, in addition to her five clinics. She has examined the costs of renovating the buildings she owns and said she doesn’t think she’ll be able to afford it.
“I hope I can figure out how to beat this or how to comply with reasonable expenses -- if anyone can I am sure it is Whole Woman’s Health and my team,” she said. “But this business is really, really hard.”
Last year, her six Texas facilities combined made a 3.3 percent profit and in 2011 a 6.4 percent loss, she said. She has 140 employees and 24 doctors on her payroll.
Miller began working in abortion care at age 21 -- as a receptionist at a Planned Parenthood in her native Minnesota -- and went on to found Whole Woman’s in 2003 in Austin.
She also operates clinics in Baltimore and Minneapolis, and has been an outspoken critic of the Texas law. She testified against it to lawmakers, participated in rallies in recent weeks at the statehouse in Austin, and opened the doors of her clinics to the public to argue that altering them is unnecessary.
Miller said it took her six years to find a surgical center where she could perform abortions, in an office park in San Antonio across the parking lot of an abortion clinic she runs. In 2010, she bought the license for the center that previously housed a pain-management clinic after architects estimated her cheapest option, to retrofit an existing building, would cost $1.5 million.
The differences between Miller’s clinics and surgical center are noticeable.
There are three procedure rooms in the San Antonio clinic that each hold at most three people -- a doctor, nurse and patient -- next to a narrow bed, a small sink and supplies such as gauze and bandages.
At the surgical center, the operating rooms are larger and resemble a hospital emergency room. There’s equipment to administer anesthesia and monitor heart rate and blood pressure. There are two movable overhead surgical lights. Wider hallways than in the clinic allow stretchers to pass.
There’s no difference in the number of complications patients experience at the clinic versus the surgical center, Miller said. The procedure typically involves removing the contents of the uterus without requiring cutting or stitches.
The surgical center has had a $400,000 annual loss since it opened, even though patients who go to that facility pay more for the procedures. The losses are covered using profit from the five clinics -- meaning if all of them were surgical centers, she couldn’t stay in business, she said.
“But all the same, I am in it for the long haul, for the true lifting of shame and stigma off of women and sexuality,” she said. “It will take years. I hope it will happen in my lifetime.”
Last month, Lauren Banks, 25, a customer-service representative at a call center, was waiting to consult with a Whole Woman’s Health doctor about an abortion at the clinic in San Antonio. She was about 10 weeks pregnant and planned to have an abortion the next day, after she and her husband decided they were unable to raise the child. They already have three boys and would like to become more financially stable, she said.
“The clinic is fine the way it is,” Banks said.
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