Federal Funding for Children’s Hospitals: Challenges and Critical Shortages for Pediatric Care

It was a busy day in the emergency department (ED); the waiting room overflowed with a cacophony of wheezing, retching, coughing, and crying. I had diagnosed dozens of cases of bronchiolitis this week as a fellow in the ED, but Alex^* was the sickest child I had seen in a while.

Alex was a sweet 4-month-old infant with big dimples and bright brown eyes. Today, however, Alex was in respiratory failure. His mother told me how his retractions had gotten worse at home, and he stopped making wet diapers. She counted his breaths: >80 times per minute. She had called an ambulance, frantically worrying he would stop breathing. He arrived febrile, tachypneic, and hypoxic, and our team in the ED quickly connected him to monitors, started oxygen, and obtained intravenous access. His family was exhausted, tearful, and petrified. I know what to do next; he needs oxygen, positive pressure, or maybe even intubation. After he is stabilized, he will need a hospital bed. But then, the problem: where can he go?

The past year in pediatrics was dominated by an unprecedented volume of pediatric viral illnesses. Respiratory syncytial virus, severe acute respiratory syndrome coronavirus 2 (SARS CoV-2), and influenza have overrun pediatric practices, EDs, and inpatient units, resulting in significant capacity issues. The Centers for Disease Control and Prevention issued an advisory, anticipating strains on the pediatric health care system, which were then seen in force across the nation.¹  This viral triple pandemic, or “tripledemic,” as coined in the popular press, exacerbated years of pediatric health care system weakening.

“Have capacity issues ever been this bad?” That is the question that rang through my head as I thought about Alex. That is the question I posed to my attending in the ED. The answer was simple: “No.”

During the discussion that followed, we lamented how the current capacity crisis is unmasking the broader trend: a diminishing pediatric health care system, driven in part by decreased funding for pediatric care and workforce development. Between 2008 and 2018, 19% of pediatrician inpatient units closed, and pediatric inpatient unit beds decreased by 12% over the same interval.²  As a result, nearly 1 in 4 US children have experienced an increased geographic distance to the nearest pediatric inpatient unit.²  Moreover, when community inpatient units close, children are more likely to be cared for at freestanding children’s hospitals, and these freestanding children’s hospitals, like ours, are likely to be operating at or above capacity.³ 

As I cared for Alex, I learned that his family lives almost 1 hour away and that recent pediatric hospital bed closures in our city have resulted in Alex living further from a pediatric inpatient unit. Alex, like one-third of children in the United States, is covered by public insurance. For pediatric admissions, public payers are nearly 3 times more likely to underpay hospitals compared with private payers.⁴  This reduced reimbursement for pediatric care is a contributor to why many hospitals have decreased the pediatric services they provide, resulting in Alex, and many other children on public insurance, living further from essential pediatric care in their community.⁵ 

The next patient I see in the ED is Hannah,^* a medically complex toddler whom I have cared for many times in residency and fellowship. Her father recognizes me and smiles when I ask if Hannah still likes listening to the Moana soundtrack. Hannah is usually quiet, although today she is grunting with each breath. Her father held her small hand in his, her pink nail polish making her pallor even more pronounced. Hannah has contracted influenza and needed her bilevel positive airway pressure (BiPAP) more than usual. The smell of stale coffee in the room suggested her father had been awake with her for hours. As I care for Hannah, I am reminded that the number of children with complex medical needs and their utilization of health care, often in freestanding children’s hospitals, is growing.^6–8  Both Hannah and Alex will board in the ED as we wait for ICU beds to become available, a strain for both their families and our ED team.

I have pursued all my postgraduate medical training at a freestanding children’s hospital, like most pediatric trainees. Freestanding children’s hospitals are responsible for training 56% of all general pediatrics residents and 54% of all pediatric subspecialty trainees.⁹  Despite this outsized role in replenishing the pediatric workforce, freestanding children’s hospitals have long been disadvantaged when it comes to federal funding to support their teaching mission. Historically, teaching hospitals have received financial support through the Medicare Graduate Medical Education (GME) program. Although some of these GME funds go to systems that include pediatrics, freestanding children’s hospitals are generally ineligible. This is because these funds depend on treating Medicare patients, who are primarily older adults, and therefore, freestanding children’s hospitals do not see enough Medicare patients to receive the Medicare GME funding.¹⁰ 

In the 1990s, shortages of pediatric providers across the nation prompted parents and advocates to flock to Washington, DC to rally for change. As Congress’ Chair of the Subcommittee on Health aptly stated at the time, “Children’s hospitals can’t rely on Medicare GME funding because they don’t have access to it. Under-investing in pediatric medicine makes no sense. We protect our children. We nurture our children. Why should we finance our way toward a healthcare system that shortchanges them?”¹¹ 

In response, Congress established a discretionary program called the Children’s Hospital Graduate Medical Education (CHGME), which has provided some federal funds to this group of hospitals since 2000. Unlike Medicare GME, CHGME is not an entitlement program but rather subject to annual appropriations from Congress. The nuance of this different funding mechanism results in less predictability in funding year-to-year and an overall gap in funding levels, which has persisted and increased over time. This is in contrast with funding mechanisms written into law that increase annually proportional to inflation. Today, freestanding children’s hospitals training pediatric residents and fellows receive 50% of the funding per resident in federal funds compared with those eligible to receive funds through the Medicare GME program.⁸ 

As a trainee, I was saddened and frustrated to learn about this disparity in funding sources for GME. I cannot imagine my hospital without residents and fellows. Patients and families, as well as hospital faculty and staff, value the work of trainees. I am filled with pride and gratitude when I think about families like Hannah’s, who recognize me as a trainee, acknowledge me as an essential member of their care team, and have watched me grow as a physician.

Investing in pediatric training programs not only supports a future robust pediatric workforce; the majority of pediatricians and pediatric specialists receive training at a CHGME-dependent program. Moreover, research reveals that although residents require an investment of resources from the hospital systems, the net effect of residents on hospital productivity is positive.¹²  Accordingly, as more pediatric beds at hospitals close nationally, CHGME funding is vital to ensure children’s hospitals are able to continue providing high-quality care to increasingly large volumes of patients. Indeed, whereas the 59 hospitals eligible for CHGME comprise only 1% of all the hospitals nationwide, they provide close to one-third of the inpatient care received by children covered by Medicaid.¹⁰  The more I learned, the more I realized I had to call Congress myself and fight for continued CHGME funding.

Legislative advocacy can feel daunting for physicians, let alone trainees. I have come to appreciate that, as pediatricians, we are uniquely equipped with the data and stories to advocate for change and bring about solutions. Indeed, we advocate for our patients every day in our hospitals and clinics. Now, we must advocate on a national scale. Although legislative advocacy initially felt outside of my comfort zone, I reminded myself that I adeptly counsel patients and families on complex concepts every day. Whether we are advising families in clinics or policymakers in Congress, we are child health experts, and legislators want to hear our perspective.

Using resources from the American Academy of Pediatrics,¹³  my faculty mentors, and staff in the Office of Government Relations, I called my representatives and told them how CHGME funding helps protect our patients. I told them about our waiting room, bursting at the seams. I shared stories about Alex, Hannah, and my experience as a pediatric trainee at a freestanding children’s hospital. I was surprised by how cathartic it felt to share these stories with policymakers, knowing that my experience can be a tool for advocacy. After we finished talking, I thanked them for their time, hung up the phone, and felt lighter. Caring for children in the capacity crisis was, at times, disheartening; working to preserve the pediatric workforce gives me hope.

After waiting for an ICU bed for several hours, Alex was admitted. I visited Alex a few days into his hospital stay; I was relieved to see him cooing in his mother’s arms. He finally no longer required BiPAP, and I was filled with joy to see him vigorously shaking a rattle. As Alex’s mother gazed into her son’s cherubic face, she shared that having an ill infant was scary enough and that she never imagined there would not be enough hospital beds for her child.

A few days later, Alex was discharged; although he was now well, his harrowing hospitalization indelibly impacted his family, his community, and me. Hannah, too, improved and was able to return home. I wonder what might have happened to Alex and Hannah had things played out differently. I know that many other children are still unable to find hospital beds when they need them. Capacity issues are a worry no family should have, and continued advocacy for CHGME funding is essential to ensure a robust pediatric workforce, now and for the future. Together, we can work to make sure that all sick children have a place to go.

CHGME

Children’s Hospital Graduate Medical Education Payment

ED

emergency department

GME

Graduate Medical Education