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The Cost of Yet Another Pediatric Hospital Closure

— A national trend toward pediatric service consolidation is restricting access to care

Last Updated March 8, 2023
Ƶ MedicalToday
A photo of a sign in the window of a closed hospital which reads: HOSPITAL CLOSED

During a clinical rotation at Tufts Medical Center in August of last year, I witnessed the restructuring of departments in the wake of the recent closure of Tufts Children's Hospital. On Jan. 20, 2022, Tufts had announced its plan to close their children's hospital. Despite community outcries, Tufts began transitioning 41 pediatric inpatient beds in July into adult units and transferring pediatric inpatient care to Boston Children's Hospital (BCH). Low pediatric volume as a reason for closure, despite record demands for inpatient pediatric units due to the , and the more recent RSV surge. While perhaps a necessary financial move for Tufts, the closure of another pediatric hospital may reflect the national movement towards hospital and pediatric service consolidation, further exacerbating restrictions in access and monopolization of services.

Hospital Consolidation

Hospital consolidation is nothing new. The U.S. hospital market is incredibly concentrated, and has over the last decade. Proponents of horizontal-integration argue mergers reduce healthcare costs and improve quality through economies of scale. Merging may via standardization of electronic medical records and reduction of services. However, studies show mergers have on quality of care, and any cost savings are not transferred to patients. In fact, mergers and acquisitions may reduce competition, and can increase a hospital system's bargaining power to raise prices. Reports show that nearly one fifth of all hospital markets in the U.S. operate in a monopoly setting; and that when mergers take place in concentrated markets, price increases for insurance companies exceed 20%. These price hikes are then passed on to patients and tax-payers through higher premiums and co-pays.

Pediatric Services: Where Do We Stand?

Hospital consolidation may lead to increased prices, concentration of care, and exacerbation of healthcare disparities. While consolidation affects all specialties, the state of pediatric services should garner specific attention. From 2008-2018, inpatient pediatric beds by 11.8% and inpatient pediatric units by 19.1%, resulting in increased distances to care for nearly a quarter of U.S. children. Clearly, pediatric services are closing at alarming rates. With increasing financial pressure, hospitals are incentivized to condense costly departments. This may start as a slow increase in ED transfers to other facilities. As volume decreases, staff comfort with pediatrics decreases and providers leave, until finally, the department is closed altogether.

Despite Massachusetts' reputation for high-quality healthcare and the in the U.S., Massachusetts hospitals and communities appear to be becoming less capable of caring for common pediatric conditions, resulting in pediatric services being restricted to specialty academic centers.

In a published in JAMA Pediatrics, Urbano L. França, PhD, and Michael L. McManus, MD, MPH, evaluated the capability and regionalization of adult versus pediatric care in all acute-care hospitals in Massachusetts between 2004-2014. The researchers found Massachusetts pediatric hospital care has become more concentrated, with fewer children able to receive complete care in their community. ED to ED transfers for pediatric patients increased 52.7%, despite a significant decrease in pediatric ED visits and admissions. Fewer hospitals were capable of caring for pediatric conditions, with community hospitals seeing a greater than 40% decline in their mean pediatric Hospital Capability Index (which reflects the likelihood of a hospital completing a patient's care without transfer). More than 75% of pediatric conditions were found to be highly regionalized (in terms of where complete care could be provided), including common conditions such as upper respiratory tract infections, asthma, lower limb fractures, and appendicitis. The authors suspect decreasing pediatric capability in mostly nonacademic institutions is increasing concentration of care in academic centers. While this study did not address changes in quality of care, I believe it is unlikely that higher quality care from academic institutions would outweigh risks caused by delays in diagnosis and increased time to treatment for common pediatric conditions. Similar findings of increasing regionalization and decreasing capacity have been replicated in .

While Boston is fortunate in its plenitude of healthcare services, the transfer of pediatrics from Tufts to BCH is still likely to create access inequities. The two institutions historically serve , with a large portion of Tufts patients being non-English speaking and , compared to 36% publicly insured at BCH. The academic reputation of BCH also allows a higher price tag -- specifically 25-38% more than Tufts, depending on insurance. Higher prices charged to insurance companies generally mean higher out-of-pocket costs and copays for patients with private insurance. And with BCH gaining more market share, it is likely prices will continue to rise. Nevertheless, officials at both hospitals assured the public that Tufts patients on Medicaid should not worry, as Medicaid covers the entirety of their healthcare costs. Yet, increasing hospital prices have already forced many Medicaid managed-care plans to restrict access to specialty centers like BCH. In 2016, Neighborhood Health Plan, then a division of Partners Healthcare and the largest of six Medicaid managed-care plans in Massachusetts, followed Boston Medical Center's HealthNet in restricting access to BCH, citing prices were too high. Currently, BCH does not cover all available Medicaid plans in Massachusetts. If these disparities exist in a highly dense healthcare region such as Boston, it is easy to imagine the detrimental effects resulting from the closures of pediatric departments in more rural community hospitals.

Therefore, while localizing specialized pediatric care to high-volume children's hospitals and academic centers may improve care for some conditions, the loss of community-based pediatric primary care and consolidation of services is likely to reduce access, increase prices, and delay care, leading to worse health outcomes and increased disparities.

How to Move Forward

Pediatric units are closing across the country, and pediatric care is being regionalized to large systems able to raise prices at will. Despite President Joe Biden's in 2021 encouraging the Federal Trade Commission's (FTC) continued enforcement of antitrust regulation, not all hospital consolidations and pediatric department closures have been prevented. While the costs and low reimbursements in pediatrics are worthy of concern, we as a nation should not allow institutions to cherry pick healthcare services based on finances.

So, what are some alternatives? Perhaps legislation should focus on price-caps on healthcare services. Alternatively, children's hospitals with monopoly market shares could be mandated to accept a certain percentage of Medicaid patients and care for a geographic area through population-health management plans. These latter options may be used as requirements for children's hospitals to receive subsidies, non-profit, or 340b status to ensure local communities receive care. Additionally, continued involvement in legislation by physicians, medical organizations, and hospital leadership will be required to bring attention to further closures of pediatric units.

Children's healthcare is fundamental to the future. While children's hospitals and academic centers certainly provide excellent care, they are not equipped to supplant basic primary pediatrics for entire regions. The reliance on few specialized centers to provide care for an entire specialty and age group will create access disparities, delay care, and monopolize prices. The national loss of community-based pediatric care is detrimental to children's health and pediatrics as a specialty, and needs to be addressed with local, state, and federal action.

is a fourth-year medical student at , and a 2023 Boston University Questrom School of Business MBA Candidate.