Children’s Health Systems – The Benefits of Scale

While birth rates have continued to decline, there has been a steady increase in the number of children diagnosed with chronic disease in the United States – spanning conditions that vary from obesity to autism. This has created a significant increase in the demand for sub-specialty trained physicians who are devoted to caring for children. And yet, largely because of compensation differences compared to the adult specialties, many of the training programs for pediatric specialties across the country have gone unfilled as seen in Table 1 below:

This dynamic has exacerbated the shortage of pediatric specialists across the country.  As today’s senior complement of pediatric specialists retire, there are insufficient numbers of new graduates to take their place.  Trainees are far more likely to stay and practice at the place of their residency or fellowship, which would suggest that children’s health systems with their own training programs are the most successful at recruiting and retaining talent over time.

Unfortunately, children’s health systems receive little to no support from the traditional graduate medical education (GME) funding mechanism in this country because that funding is tied to Medicare volumes. The Children’s GME (CHGME) program was enacted in 1999 to address this disparity – but unlike traditional GME funding, Congress must regularly appropriate funding for the CHGME program, which creates more uncertainty regarding its sustainability and makes smaller children’s hospitals more reluctant to develop new training programs or expand existing ones.  Children’s health systems need sufficient funding (generally coming from clinical operations and/or philanthropy) to support their training programs.

Need for pediatric specialists exists across all specialties but is most acute in some of the behavioral health and cognitive specialties as shown in Table 2. And yet, given the complex nature of children’s illnesses, these are often the specialties that are most critical to developing a true multi-disciplinary program. Average wait times for many of these pediatric specialties across the country are in the months, not days – with the problem exacerbated in specialties at smaller children’s hospitals without the scale to keep more than 1 or 2 specialists busy.

Larger children’s health systems are more likely to have the resources to recruit and retain the subspecialty talent needed to provide niche service offerings and develop multi-disciplinary programs that provide best-in-class care for patients and families.

Table 2: Pediatrician Vacancies by Specialty as Reported by Hospitals^[i]

Children’s health systems have historically discussed their value proposition in terms of quality (e.g., clinical outcomes, patient safety) and service (e.g., access to specialty care, wraparound programs).

Several studies have shown a direct correlation between clinical volumes and quality outcomes.  The association between improved outcomes at sites that perform a procedure has often been the focus of payor-driven proposals to regionalize care to high-volume centers. And for a variety of reasons, the correlation between scale and outcomes disproportionately favors children’s health systems with the scale necessary to support larger clinical programs and services.  Other benefits include:

• Sub-Specialty Physician Depth: Larger patient bases provide an economic justification to recruit more than one or two specialists in support of a given program. This both attracts better talent and provides the health system with continuity in the event of one physician departing/retiring, which supports more consistent clinical outcomes.
• Specialty Care Team: For specialty children’s programs, the capabilities of the care team are just as critical as the individual skill level of the physician. To ensure that pediatric anesthesia, imaging, nursing, etc. all have the competency to care for these very complex children, these professionals need to have regular exposure to a large volume of cases.
• Support Staff: Larger children’s health systems tend to have greater ability to invest in quality improvement and monitoring programs, and have dedicated resources to staff, systems and programs that smaller facilities cannot justify. Medical directors, patient navigators, chart abstraction, quality analysts and other personnel are all more common in programs with larger platforms since their costs can be spread over a larger base of patients.
• Research Funding and Support: Pediatric clinical research funding (both NIH and industry) tends to go to clinical programs with a large patient base, since that ensures that there are enough enrolled participants to make the study statistically valid. And since the largest children’s health systems attract the most funding, they are on the cutting-edge of treatment, which in turn attracts the specialty talent necessary to drive the best clinical outcomes.

The reality is that for many pediatric specialty clinical programs, there just isn’t enough incidence of disease to justify multiple program offerings. For example, there are fewer than 2,000 hematopoietic cell transplantations (HCT) provided to children annually across the country – and yet there are more than 80 children’s programs vying for that volume.

Table 3: Number of Pediatric Hematopoietic Cell Transplantations from 2000 – 2016^[i]

Based on the data, the average children’s HCT program does fewer than 30 transplants all year. And there is significant variability in the scale of these programs, with some children’s centers doing well over 100 annually, while many others performing fewer than 20 per year. Not surprisingly, the largest children’s centers tend to have superior outcomes.

This trend can also be found in congenital heart surgery, where many of the larger programs have adjusted mortality rates less than 3.5% while some smaller programs have adjusted mortality rates that are considerably higher.

At a macro-level, the largest children’s health systems tend to have the best scores when looking at overall hospital quality. The category “Outcomes and Experience” makes up 44.2% of the total scoring for the U.S. News & World Report Top Children’s Hospitals rankings. In each of the ten clinical specialties that U.S. News tracks, the best “outcomes and experience” scores are typically linked to the largest hospitals and health systems.