Are children's hospitals overspending?

A children's hospital construction project in Cental Florida that is costing about $4.2 million per bed is raising concerns about overspending on such pediatric facilities nationwide, reports Kaiser Health News.

The Nemours Children's Hospital project near Orlando was twice rejected by regulators before objections were overcome via vigorous lobbying. The final cost of the project will be $400 million.

Elsewhere in the country, the subsidization of acute pediatric care through the CHIP and Medicaid programs and generous tax breaks given to not-for-profit facilities may be driving the overbuilding of children's hospitals and contributing toward the spiraling cost of healthcare.

"The elite children's hospitals don't compete on price," said Jerry Katz, a former CEO of St. Christopher's Hospital for Children in Philadelphia. "They compete for prestige. What that means is they are competing for the top docs and researchers, the top programs."

As a result, money is lavished on staff, with some of the highest paid hospital CEOs in the nation helming children's facilities, according to KHN. And more than $16 billion has been spent on children's hospital construction and expansion over the past decade.

For more information:
- read the Kaiser Health News article
- read a Payers & Providers article on children's hospital CEO pay