Children’s Hospitals Feel Squeeze From State Medicaid and Budget Shifts

After years of strong economic growth, children’s hospitals are facing a new fiscal landscape due to state spending reductions, particularly in the Medicaid payments that account for half of their revenues, Kaiser Health News reports.

Moves by lawmakers in California and Florida to shift Medicaid patients into managed-care plans could cost children’s hospitals millions of dollars, advocates and industry leaders say.

In addition, cuts in programs to train physicians are raising fears of a shortage of pediatricians and specialists, especially in states like Texas where the population of children is growing.

“In past years, children’s hospitals have been held harmless in state budget negotiations,” said Tony Carvalho, who leads the Safety Net Hospital Alliance of Florida. “This year, with the size of the budget deficit, the mood in the legislature was everybody had to participate.”

(Kaiser Health News is a program of the Henry J. Kaiser Family Foundation and is not affiliated with the insurer Kaiser Permanente.)

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