Overhaul could leave kids' hospitals strapped for cash

Industry advocates say health reform could place a disproportionate burden on children's hospitals, because they will face cuts along with other hospitals, but do not stand to benefit from expansions in insurance coverage, USA Today reports. Children's hospitals "serve a high share of patients on Medicaid, which pays hospitals less than private insurance. And, because of past government efforts to insure children, most of them already have coverage — meaning children's hospitals have less to gain from an increase in the number of people with insurance." The planned cuts, which hospitals agreed to in meetings at the White House, would include so-called disproportionate share hospital payments that help facilities that treat the uninsured and Medicaid patients make ends meet. Children's hospitals are now lobbying Congress to block such changes they say could cost them $876 million (Fritze, 11/12).

Meanwhile, due to budget crises, some states are already cutting payments to hospitals. The Gary, Ind., Post-Tribune reports "Indiana Families and Social Services Administration announced Tuesday it would cut the state Medicaid match by 5 percent -- an estimated $10.6 million -- to Indiana hospitals. Indiana Medicaid paid the state's hospitals $524.6 million for inpatient and outpatient care, with the state contributing approximately 25 percent of that total and the federal government the remaining 75 percent. The 5 percent cut would come from the state. Local health systems said the Medicaid cuts will hurt their ability to deliver care to poor and uninsured patients and those Medicaid recipients" (Taylor, 11/13).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.