For Abortion Providers, a Tough Business Gets Even Tougher

Providing abortion services has always been a difficult business, with tiny-to-nonexistent profit margins and often-challenging logistical obstacles. And the Supreme Court’s decision in Dobbs v. Jackson two years ago, which eliminated the constitutional right to an abortion, has made the landscape of reproductive services even tougher.

The fall of Roe v. Wade has pushed many abortion clinics to explore alternative markets for their services. Some clinics are moving to abortion-rights states or expanding their presence there, hoping to meet the needs of a more concentrated customer base. According to a recent analysis by The New York Times, out-of-state travel for abortions more than doubled in 2023 compared with travel in 2019, and made up nearly a fifth of recorded abortions.

Caitlin Myers,  a professor of economics at Middlebury College who tracks clinic openings and closures nationwide, estimated that at least 12 new clinics opened directly in response to Dobbs and another six relocated after abortion was banned in their states.

Many clinics are finding out, however, that blue states can often be almost as hostile to their presence as red ones.

In September 2022, Dr. Matthew Reeves signed a lease for a new branch of the DuPont Clinic in Beverly Hills, Calif., as he sought to expand his reproductive health care clinic beyond its original location in Washington, D.C. In January of that year, as the future of Roe v. Wade looked increasingly uncertain, Dr. Reeves and Jennefer Russo, the chief medical officer of DuPont Clinic, had begun to think about opening an additional practice in a state that allowed access to abortions

“Dobbs was percolating and it became apparent that the Supreme Court was likely to overturn Roe v. Wade,” Dr. Russo said in an interview earlier this year. “Our thinking was that patients could come to L.A. if they lived west of the Mississippi.”

Planned Parenthood, which has roughly 600 affiliate health centers across the nation, has the most brand recognition. But independent clinics like Dr. Reeves’s perform just over half of the nation’s abortions and 61 percent of abortions after the first trimester, according to the Abortion Care Network. (Most abortion clinics also perform other health care services, like OB-GYN exams and supplying birth control.)

The move to California was not an easy one. Dr. Reeves and Dr. Russo spent nearly a year scouring Los Angeles County for office space, only to have most landlords back out once they realized the clinic provided abortions after 20 weeks of pregnancy. The doctors eventually found a spot in Beverly Hills, where the City Council had unanimously affirmed abortion’s legality shortly before the Supreme Court overturned Roe v. Wade.

But as the clinic filed the necessary paperwork to obtain an operating license and began extensive renovations, the problems began. An anti-abortion group, Survivors of the Abortion Holocaust, started a series of protests: papering the building with fliers of aborted fetuses, projecting the words “murder mill” onto its facade and marching outside the seven-story building, which was home to dozens of other health care businesses.

On June 12, 2023, roughly two months after the protests began and about four months before the clinic was supposed to open its doors, the doctors received a letter notifying them that their landlord, Douglas Emmett, was rescinding the lease. According to the letter, the DuPont Clinic was in breach of section 6.2 of its lease, which stated, “Tenant will not do anything in the Premises that unreasonably obstructs or interferes with other tenants or occupants of the Building.”

“We’d invested almost $2 million at this point,” Dr. Russo said, adding that DuPont had filed lawsuits against both the landlord and the city of Beverly Hills. Douglas Emmett declined to comment.

“The landlord problem in Beverly Hills is symptomatic of a larger problem we’re seeing in access states,” said Bonyen Lee-Gilmore, the vice president of communications at the National Institute for Reproductive Health. “For a lot of years, blue states and cities could get away with just proclaiming their pro-abortion values through resolutions or public statements, but now we need them to put it into action to protect access. And they’re falling short.”

Last year, the National Abortion Federation, a professional association of abortion providers, released its 2022 statistics on violence and disruption against abortion clinics. The report showed a sharp increase in violence and disruption in states that were protective of abortion rights. “As clinics closed in states with bans, extremists have simply shifted their focus to the states where abortion remains legal and protected,” Melissa Fowler, the organization’s chief program officer, said in a statement accompanying the report.

Those who have opposed abortion have been quick to claim victory. “America has moved into a new era,” said Tim Clement, the director of outreach for Survivors of the Abortion Holocaust, which led the protests in Beverly Hills. “Nobody thought Roe would be overturned. That was the very thing that sparked a lot of people to get into the fight.”

Others in the anti-abortion movement acknowledged that, in the last two years, they had shifted their efforts to focus more directly on states like Michigan, Connecticut and New Mexico, where governors and legislatures had taken steps to strengthen the right to abortion access. “In states where abortion is allowed, we are trying to reach out in a lot of different ways: social media, billboards, community groups, talking to friends and neighbors,” said Carol Tobias, the president of National Right to Life. “That started as soon as Dobbs came down.”

‘Are You Kidding Me?’

About 60 percent of abortions take place during the first trimester and most can be administered with medication, increasingly via telehealth. Since Dobbs, scores of health care clinics have added medication abortion services. But a procedural abortion requires a clinic.

Beyond the logistical problem of finding a suitable space and a welcoming landlord, many clinics face another challenging issue: Most of their clients can’t pay them.

A recent study from the Guttmacher Institute, a sexual and reproductive health and rights organization, found that 73 percent of abortion seekers had incomes under the poverty line. “They’re on the edges of the economy,” Tracy Weitz, a professor of sociology at American University, said. “You can’t really raise your price for that population.”

Amy Hagstrom Miller, the C.E.O. of Whole Woman’s Health, which operates six clinics in four states as well as one virtual clinic, said only two of them were currently profitable. “Whenever I talk to people about my margins,” she said, “they’re like, ‘Are you kidding me?’”

Procedure rates — which can run from $600 to many thousands for the rare abortions that take place late in a pregnancy — certainly haven’t kept pace with medical inflation, even though everything else about running a health care business, from insurance to equipment to payroll, has become more expensive.

The reimbursement landscape is also difficult for clinics. Patients who need help covering the costs of abortions generally have three options: private insurance, state-supported Medicaid programs and abortion funds. Three of the 36 states (and Washington, D.C.) where abortion is legal, limit the use of private insurance to cover services in their state-regulated plans. Twelve states also ban abortion coverage through their Affordable Care Act exchange plans.

Federal Medicaid funds cannot be used to cover abortion, so 17 states provide coverage with their own state-run Medicaid programs. But many of these state-run programs reimburse at low rates. A new study from KFF found that state Medicaid reimbursement rates did not increase significantly after the first trimester — when procedures become more complicated and, therefore, more expensive. This means that clinics are being significantly underpaid for the services they’re providing.

Finally, many patients rely on abortion funds — nonprofits that raise money to help patients cover procedures and travel costs. Some clinics, like Dr. Reeves’s, even employ staff to help patients gain access to this money. But the funds are in high demand and typically cover only a clinic’s baseline costs.

Some of these challenges are on display at the Red River Clinic, which relocated to Minnesota from North Dakota last year, after North Dakota banned abortion. The clinic charges $700 for a first-trimester procedural abortion, which the owner, Tammi Kromenaker, said was standard across the state. For this, Minnesota’s Medicaid program reimburses at 28 percent. A medication abortion costs $750, and the state Medicaid program reimburses only at 20 percent. Ms. Kromenaker said the use of abortion funds allowed her to break even. But this year, partly because of the rise in Medicaid patients, she’s running at a loss.

A handful of states have significantly increased their Medicaid reimbursement rates since 2017, including New York, New Mexico and Illinois. California has proposed raising payment rates for medication and procedural abortions. But Ms. Weitz doesn’t see widespread policy change on the horizon. “Nobody wants to change those rates,” she said. “People are uncomfortable with the idea that someone might make a profit with abortion.”

Fierce Local Resistance

Over the last two years, clinics trying to open in Fontana, Calif.; Lancaster, Pa.; and Danville, Ill. — all in states where abortion has been legal for 50 years — have faced fierce local resistance. In Pennsylvania, free-standing abortion clinics must sign a “transfer agreement,” a contract with a hospital within 30 minutes that can offer emergency care if needed. Last September, a county commissioner in Lancaster warned local hospitals against signing such an agreement with the new clinic.

Melissa Reed, the C.E.O. of Planned Parenthood, Keystone, said at least one hospital cited an “onslaught of anti-abortion calls,” in its refusal to form a partnership. (Such partnerships are required for clinics to operate in Pennsylvania.) The state department of health eventually provided the clinic with a waiver, but only to offer medication abortion.

Both Ms. Reed in Lancaster and Jon Dunn, the president and C.E.O. of Planned Parenthood in Orange and San Bernardino Counties, believe that local officials purposefully slow-rolled their building permits, forcing months of delays over cosmetic details like sconces and the height of parking signs. Mr. Dunn said that 13 months after the organization leased a downtown property in Fontana, the city passed a moratorium on issuing new building permits. The organization had already spent $1 million on renovations and city-mandated upgrades and it subsequently sued the city, saying the moratorium violated the state constitution.

In July, the Fontana City Council extended the moratorium for another year. In an email, a spokesman for the city said that the moratorium affected “more than 70 proposed projects” and that pending the results of a land-use study, health care providers might eventually be allowed to open in the area.

“The decision to overturn Roe has emboldened anti-abortion politicians in a way we hadn’t seen before, with more aggressive tactics, even in blue states like California,” Mr. Dunn said. “Those who oppose abortion rights are more dug in and more committed to stopping abortion providers in their areas.”

In Danville, Ill., the City Council narrowly passed an ordinance in May 2023 banning the shipping and receiving of abortion pills and equipment — a move that the attorney general of Illinois called a violation of state law and largely “symbolic.”

Soon afterward, an Illinois man named Philip Buyno repeatedly drove his truck into the building that LaDonna Prince, the owner and director of Affirmative Care Solutions, had purchased with plans to open a clinic there. He had reinforced his vehicle with wood planks and loaded it with several containers of gasoline. Mr. Buyno, 73, was eventually sentenced to five years in prison for attempted arson.

But the incident became a lesson for Ms. Prince. She has since installed bollards, a privacy fence and costly ballistic panels “just in case someone would drive down the road and decide to shoot up part of the building,” she said. Given the extent of the damage, the clinic has not yet opened and Ms. Prince said the threat of physical harm remained “a huge deterrence” to hiring staff.)

Clinic owners say these realities can make it difficult to insure their properties. “Premiums are higher because of the nature of work that we do,” Ms. Prince said. And a year after the attack on her building, her claim still has not closed, she said.

Jennifer Pepper, the C.E.O. of Choices clinics, which recently expanded from Tennessee to Carbondale, Ill., said new clinics like her own couldn’t just open like they were any other business. “We’re moving into somebody’s house. We want to behave as guests,” she said.

Ms. Pepper said she introduced herself to the nearby neighbors, a Kroger and a Freddy’s, and let them know how to reach out if they had questions. And she suggested to her neighbors that an influx of potential new shoppers could be a boon for them. “I hope they’re spending money at those businesses,” she said.