pinwheel / Julie Markee

September 11, 2015;

Hospitals around the country are feeling more than a little pinch as states consider cutting Medicaid. On Tuesday, the Alabama state legislature will convene in a special second session to address its $156 million shortfall. Medicaid will be one of the most seriously affected programs. Given that Medicaid reimbursements cover only half the costs of providing care, if significant cuts are made, the hospital Children’s of Alabama will be forced to cut programs. Because state Medicaid funds are matched by federal dollars, cuts to hospitals go even deeper, resulting in their inability to acquire cutting-edge technologies like medical imaging equipment and surgical robots.

The biggest losers will be patient families, according to Dr. Jeffrey Blount, professor of neurosurgery at the University of Alabama at Birmingham and president of the medical staff at Children’s. He shared his opinion on the matter on last Friday. He advocates for sustaining Medicaid funding without interruption or cuts. He writes, “Children’s is a unique treasure for the state. It is one of the largest and busiest children’s medical centers in the nation and provides a comprehensive range of services for the children of the state.”

Blount argues that the hospital’s disadvantaged families with really sick children will be the most vulnerable. “Many of Children’s patients suffer from chronic, lifelong profoundly disabling conditions that arise through absolutely no fault of their own.”

Consider the parents of a six-year-old who has hydrocephalus and was born prematurely. In her short life, she has had over 20 operations and needs continued rehabilitation and pulmonary medicine along with physical therapy. Her mother has had to quit her job to take care of her. Her husband’s health insurance coverage has been depleted. The family needs Medicaid to cover the costs of their complicated care.

Blount says, “Chronic complex illness is a serious and profoundly challenging reality for these people and many of them demonstrate graciousness within adversity that has redefined the outer limits of the concepts of love and beneficence that I have ever witnessed.”

In addition to hurting families, the cuts will have a serious impact in the recruitment and retention of physicians. Children’s and the University of Alabama attract medical staff from across the nation, but the hospital’s high-caliber doctors may be wooed away by other centers where reimbursement is better.

Medicaid covers 32 million kids nationwide, more than 40 percent of all U.S. children. About 3 million in the United States are defined as medically complex, because they have life-threatening conditions that affect two or more organ systems. Medicaid covers the majority, about 2 million children. That number is expected to double in the next decade.

On the national front, the Children’s Hospital Association is working in partnership with the federal government to find a solution. The Advancing Care for Exceptional Kids Act of 2015 (ACE Kids Act) was introduced to deliver savings to Medicaid by using existing funds to align payments to achieve better outcomes for children with medical complexity. The ACE Kids Act achieves savings through tailored provider networks that provide the most appropriate care closest to the child’s home and community decreasing the need for hospital stays and emergency room visits.

Nationwide Children’s Partners for Kids (PFK) is one of those networks. It is a pediatric ACO serving approximately 300,000 Medicaid-eligible children in Ohio and designed to address rising costs and concerns about the quality of care delivered to low-income patients. A study in Pediatrics indicates that PFK has proven that it has successfully improved the value of pediatric care, containing costs while maintaining quality of care. A handful of pediatric ACO’s are involved in studies looking at more cost-effective ways to ensure quality of care.

Still, as the ACE Kids Act is making significant progress, Children’s of Alabama needs a break now. Blount says, “Children’s is a unique treasure for the state. It is one of the busiest children’s medical centers in the nation and provides a comprehensive range of programs for the children of the state. Many families know us as a place ‘Where miracles happen. […] I strongly encourage the Legislature to invest in this very precious resources for the state of Alabama by securing continued and uninterrupted funding for Medicaid in the upcoming budget.”—G. Meredith Betz