By Stephanie J. Underwood Senior Vice President at Tyler & Company with Carolyn Jackson CEO of St. Christopher’s Hospital for Children in Philadelphia

It’s hard to find a single aspect of healthcare that the latest wave of reform does not touch. Children’s hospitals are not immune to the economic realities facing our nation, which spends a whopping average of 18 percent of its gross domestic product on healthcare. According to the Children’s Hospital Association, more than 40 percent of children live in low income or poor families and nearly 45 percent rely on publicly financed health insurance coverage or remain uninsured. But that’s just the tip of the iceberg in terms of what is keeping many children’s hospitals’ CEOs awake at night.

Tyler & Company’s Children’s Hospital Practice Leader Stephanie J. Underwood, recently spoke with Carolyn Jackson, CEO of St. Christopher’s Hospital for Children in Philadelphia, to gain a greater perspective of how the challenges being faced by children’s hospitals differ from adult care facilities. 

Underwood: What are some of the biggest challenges facing children’s hospitals today?

Jackson: There are a lot of challenges facing children’s healthcare, but one of the biggest has to be funding the children’s hospital graduate medical education program (CHGME). 

As background, the CHGME program, created by Congress in 1999, provides significant federal support for pediatric training, thereby increasing the number of pediatric providers, addressing critical shortages in pediatric specialty care and improving access to care. Adult hospitals also receive federal funding for GME, but those dollars flow through add-on payments to their Medicare reimbursements. Since children’s hospitals have virtually no Medicare patients, GME funding is made through an annual appropriation. This money is used by children’s hospitals to train approximately 5,500 physicians each year, as well as advance pediatric research.  

Underwood: Why are pediatric-trained physicians so important?

Jackson: Children are not just little adults. They have healthcare needs based on their specific point in development as well as their size and age. Adult specialists are not accustomed to caring for children and are often uncomfortable having children in their practice, especially if they are young or have complex conditions. Just as adult medicine has split into many specialties and subspecialties, so has pediatric medicine. We would be doing a disservice to children everywhere, especially those with complex conditions, if we forced them to go to adult physicians.

Underwood: What kind of dollars are we talking about?

Jackson: The President’s original 2013 budget proposed reducing CHGME funding. After a portion of the total monies were added back in, this year’s budget was supposed to be the same as in 2012; that is $265 million. However, the final appropriation ended up being $251.16 million after a 5-percent, across-the-board cut that was applied to all non-defense discretionary spending. This is still a decrease from 2011.

Underwood: What should CHGME funding be?

Jackson: Funding should at least be restored to its prior level. Although given cost constraints in other areas, this would be a nice one to grow.

Underwood: What are the likely consequences if funding is not maintained at the 2013 level?

Jackson: If it is not maintained at the 2013 level, children’s hospitals will be faced with difficult choices regarding where to find alternate sources to fund medical education. This may result in elimination of programs or resources. It could also result in the decrease of training opportunities to medical students, residents and fellows. 

Underwood: What are you doing to plead your case with the government?

Jackson: Children’s hospitals’ CEOs are voicing our concerns to Congress, both individually and collectively. Our trade organization, the Children’s Hospital Association, has helped in terms of organizing educational briefings for members of Congress in DC. I’ve personally met with Senator Bob Casey (D-Pa.) and Senator Pat Toomey (R-Pa.). Bob Casey continues to be a strong proponent of CHGME and has co-sponsored a bill (S 958*) with Johnny Isakson (R-Ga.) to provide funding for the extension and reauthorization for CHGME.   

Underwood: Are you optimistic the approach will be successful? 

Jackson: It is impossible to predict the future, but with a strong push by children’s hospitals’ CEOs and the Children’s Hospital Association, coupled with many supportive legislators, I believe we have the potential to at least maintain current funding levels.

* Addendum: Since interviewing Carolyn Jackson, CEO of Christopher's Hospital for Children in Philadelphia, S. 958 was replaced by S. 1557, Children's Hospital GME Support Reauthorization Act of 2013. It was passed by the Senate on Nov. 12, 2013, and as of Nov. 19, 2013, had yet to be heard by the House of Representatives.

Tyler & Company is committed to advancing the careers of children’s hospitals’ leaders. We believe that the passion these leaders display is inspiring, and we applaud their dedication to providing the best care possible for children. While they face some unique financial challenges in order to continue advancing pediatric care, their business and leadership acumen position them for the best possible outcome.

Reach Stephanie J. Underwood, Senior VP, Children's Hospitals Practice Leader, at 610 558 6100 or