State of independence: Virginia alliance plans to build free-standing children's hospital

An alliance in Virginia is proposing an independent, free-standing children's hospital at a time when most of the 200-plus children's hospitals across the United States are part of larger adult health systems, according to an article in the Richmond Times-Dispatch.

The push is unusual because most children's hospitals have become affiliated with systems, Christine Hartwell of Richmond-based CH Strategy Consulting, which specializes in children's healthcare services, told the newspaper. There are only 50 independent children's hospitals in the nation, she said. "And actually, in recent years a couple of the independents have either switched to be affiliated with a system or are considering joining a system."

Since the healthcare industry is looking to manage the health of populations, many systems want to have resources available to manage the healthcare needs of children, she said. 

But a children's hospital that is embedded in an adult hospital has to compete for resources, which is why the Virginia Children's Hospital Alliance aims to build an independent facility.

"Let's say the children's hospital or the pediatric operations in an adult hospital is 10 percent of the revenue," Wallace B. Millner, chairman of the alliance, told the publication. "It's not going to be the highest priority. In an independent children hospital, all of the net gain from operations stays in the hospital."

Although all hospitals face challenges as healthcare payment models change, a 2012 Moody's Investors Service report said children's hospitals historically perform better financially because they have limited competition and are good at fundraising, the newspaper reported. 

To learn more:
- read the article