Montgomery General Hospital, citing a shortage of obstetricians and escalating malpractice insurance costs, announced last week that on Feb. 1 it will stop delivering babies to low-income women sent in by county health clinics.

The private hospital in Olney, which has a service area that includes some low-income housing areas in the eastern section of Montgomery County, delivers nearly half of the babies to women cared for by the county's five health clinics, according to the health department.

Montgomery County Health Department officials said Shady Grove Adventist Hospital in Rockville would pick up those patients who would otherwise be referred to Montgomery General.

Montgomery General spokeswoman Linda Janzik said the hospital handled 235 deliveries of county-referred women last year, a number she said is in addition to women who have not received any prenatal care and "simply walk in" during labor. Janzik said she had no figure on the number of "walk-in" deliveries and that the hospital would continue to handle these women when they arrive in labor.

Janzik said that of the hospital's nine obstetricians, only one is "willing to perform this service {for county-referred patients}. It is at the choice of the physicians involved."

She said the hospital has been frustrated in its efforts to recruit obstetricians, who tend to be drawn to hospitals such as Shady Grove in the north-central section of the county "where the population is really growing."

Dr. Martin Wasserman, county health director, described the doctors' decision as a "hardship, but that doesn't mean we can't understand."

Wasserman said the county has asked Washington Adventist Hospital in Takoma Park -- which discontinued county-referred deliveries in 1983 -- to renew its participation.

Wasserman said Holy Cross Hospital in Silver Spring will continue to care for those women whose pregnancies are considered high-risk by the county clinics. The county's only other hospital -- excluding Bethesda Naval Hospital -- is Suburban Hospital in Bethesda, which does not have obstetrical service.

Shady Grove spokeswoman Susan Frye said 300 babies were delivered there last year to women referred by the county. She said that with six of the hospital's 24 obstetricians participating in the referral program, Shady Grove "felt comfortable" taking on Montgomery General patients.

The decision of the obstetricians at Montgomery General "comes reluctantly," according to Dr. Chester Wagstaff, an obstetrician in private practice who has been affiliated with the hospital for 23 years.

Wagstaff said the hospital's relatively small obstetrical staff, the doctors' high malpractice insurance premiums and "the realization that I lose a lot of money" in performing county-referred deliveries "led me to say I just can't continue."

In addition to the financial concerns, Wagstaff said, "we believe there is no continuity of care when we see these patients for the first time after they have been cared for by the county for nine months. That makes for a higher risk patient."

Wagstaff said he and the other obstetricians are committed to helping the "medically indigent," but other hospitals with larger staffs "need to do their fair share. Then, we would not be unwilling to continue."

The Montgomery General obstetricians threatened to stop county-referred deliveries last fall but let the deadline pass.

Montgomery General officials said that about 36 percent of the county-referred deliveries are covered by Medicaid, which doctors said reimbursed them for about $800. For those deliveries not covered by insurance, the hospital pays doctors between $750 and $1,000.

Wagstaff said such payments do not cover a doctor's expenses. As an example, he said, "It costs me $800 a day to keep my private offices open to pay the nurse, nurse-midwife, bookkeeper, receptionist . . . {and he has to cover the} $46,000 in malpractice premiums, and $4,000 for premiums for my nurse-midwife . . . For me that's about $500 per delivery {for the insurance expenses alone}."

Janzik said Montgomery General lost $400,000 from county-referred obstetrical cases and from women who do not have insurance in the fiscal year that ended last July. But she added the bulk of that is from the county-referral program.

Shady Grove spokeswoman Frye said $300,000 was lost in the same period from such deliveries. Both said the two hospitals budget for the loss, and emphasized that the decision not to deliver the babies is made by the doctors, not the hospital.

Dr. Sidney M. Wolfe, director of the Public Citizen Health Research Group, said Maryland has a comparatively low Medicaid overall reimbursement rate, according to a recent state-by-state Medicaid analysis issued by the group affiliated with Ralph Nader. services are reimbursed.END NOTES

While Wolfe said problems of insufficient Medicaid reimbursement "are a problem" for doctors, he cited 1986 figures showing $138,000 as the national median salary for obstetricians. Wolfe said that figure "is after malpractice insurance has been paid."

The decision of the obstetricians at Montgomery General, Wolfe said, "raises the broader dilemma" of adequate health care for the indigent. "It is the test of any society."