The number of obstetric departments in German hospitals has declined in the last decades. In particular, rural hospitals are challenged to sustain their delivery services. In this paper, we analyse the role of variation and overheads of obstetric departments from the perspective of current and future German hospital financing. For this purpose, we develop a Monte Carlo simulation model that analyses the workload of the labour room and the obstetric ward. The results show that a hospital with less than 640 deliveries per year cannot break even. In order to offer services 24 h per day, 365 days per year, five nurses, five midwives, and five gynaecologists are needed. This results in high fixed costs. At the same time, the variation coefficient of the labour room and the obstetric ward declines with an increasing number of deliveries. Consequently, small hospitals have a higher risk of over- and under-utilization in the course of the year. This paper acknowledges that economics is not the only decision dimension. The quality of the institution and the transport to the hospital have to be considered, as well as the population's wish for nearby services. However, the simulations clearly demonstrate that unless the hospital financing system is changed fundamentally, the decline in the number of hospitals offering delivery services will continue. [ABSTRACT FROM AUTHOR]