WEST BRANCH (AP) -- A mid-Michigan hospital will close its obstetrics unit as part of a $1.2 million budget reduction.

Obstetrical services are expected to end July 1 at the West Branch Regional Medical Center. The move is part of the facility's 2011 fiscal year budget approved Monday night.

Hospital officials said a decline in births, issues with newborn nursery coverage and poor reimbursement of Medicaid claims contributed to the decision.

Chief Executive Officer Douglas Pattullo tells WNEM-TV that the center "simply could not continue to support a service that was losing money at such a staggering pace."

The budget includes reducing expenses by $588,000, labor by $613,000 and layoffs.

The medical center closed its Pain Clinic April 1.

Cheboygan Memorial Hospital closed down its obstetrics unit earlier this year for budget concerns as well.

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