Children’s Hospital of The King’s Daughters

Why the Children of Hampton Roads Can’t Afford Medicaid Cuts

Children’s Hospital of The King’s Daughters, the only freestanding children’s hospital in the Commonwealth of Virginia, serves a unique role in the care of children. CHKD is centrally located in southeastern Virginia where a large and sprawling population has high concentrations of childhood cancer, sickle cell disease, fragile premature newborns, victims of abuse and neglect and children living with diabetes and asthma. CHKD turns no child away, regardless of the family’s financial situation.

As an independent hospital and as the regional referral center for all pediatric chronic conditions and traumatic injuries and illnesses, CHKD is unlike any other health care provider in Virginia. Today, one of its differences is particularly relevant: its commitment to serving the underserved within the region.

More than 50 percent of the days children spend as inpatients at CHKD are covered by Medicaid or a Medicaid HMO. In its Neonatal Intensive Care Unit, the largest segment of CHKD’s hospitalized patients, that percentage rises to 61, a figure that reflects the NICU’s status as the only unit of its kind in the greater Hampton Roads region. The Transitional Care Unit, where patients spend weeks to years before going home, is currently 100 percent Medicaid. Finally, more than half of the visits to the Emergency Room are from children relying on Medicaid.

It is important to note that at a children’s hospital, where one pound babies are as common as 100 pound children, the cost to provide care is much higher than at an adult facility: Capital expenditures for surgical equipment that can navigate microscopic newborn veins must be as available as lifts to move a 16-year-old football player onto an operating table. And, with the closure of nearly all pediatric beds at adult facilities in Hampton Roads, the region is extraordinarily reliant on CHKD.

All of these factors reveal one truth: CHKD is uniquely vulnerable to changes in reimbursement within all Medicaid programs.

While as citizens of Virginia CHKD recognizes the extreme challenges facing the state’s overall budget, it is very concerned about any reductions to Medicaid, a program that is currently unable to cover the actual costs to provide care to its population. And while CHKD’s status in caring for large numbers of Medicaid patients is recognized through disproportionate share payments, those payments still do not overcome the shortfall in reimbursements for the care it provides to children covered by Medicaid.

In 2007 CHKD lost $3.4 million dollars on Medicaid. Next year, costs alone are expected to rise by $1.5 million dollars compounding the effect of any Medicaid reductions. And this is a preliminary projection.

With rising numbers of families experiencing losses of income, jobs, their homes, retirement funds and benefits, there will surely be rising numbers of families turning to Medicaid to cover health care for their children. CHKD’s inability to cover its Medicaid costs will only escalate.

Medicaid as a safety net program will be more important than ever for the foreseeable future, yet with looming cuts to the program, the very real question for CHKD is whether it will have enough resources to maintain its full complement of services.

It is neither an exaggeration nor an overstatement to conclude that cuts to Medicaid will jeopardize CHKD’s ability to maintain its services for every sick and injured child who needs the lifesaving care and treatment that is available only at CHKD.

We appeal to you to protect CHKD as you make your extremely difficult budget decisions this year, and we thank you for your hard work on behalf of all children and all citizens of the Commonwealth.