The Battle for the Kids

Pediatric facilities' patient base is already limited to the one-in-four people in the United States who are 18 years old or younger, of course. And as America ages, that base will eventually shrink as a percentage of the population, according to the U.S. Census Bureau; by 2030, people 18 years old and younger will represent 23 percent of the population.

According to NACHRI, only New York, Los Angeles, Chicago and St. Louis sustain three or more pediatric hospitals. Temple University Health System in Philadelphia closed its 70-bed Children's Medical Center in the fall of 2007 after reporting a daily census of less than two dozen children and losses of $19 million in 2006. In its 10 years of operation, the hospital never cleared red ink.

"It is fair to say that the expense of operating a comprehensive children's hospital was far exceeding the revenues and was a significant drain on the health system's finances," says Temple University Associate Vice President of Communications Mark Eyerly.

Beyond the question of patients, healthcare organizations in the pediatric business face another issue: Once a children's hospital is built, who's going to staff it? Pediatric specialists are among the most sought-after physicians in a nation already seeing physician shortages in almost every region. The competition for pediatric physicians becomes particularly acute in metropolitan areas with more than one children's hospital.

What's more, McAndrews says, children in general just don't need the level of healthcare services required by their parents and grandparents. "One thousand 65-and-older patients might consume 2,000 inpatient days," he says. "With a children's population under 18, 1,000 of them might consume 168 days."

John Commins is editor of HealthLeaders Florida Healthflash. He may be reached at jcommins@healthleadersmedia.com.