Freestanding children’s hospitals with teaching and research missions are about to receive federal dollars to help them recover from drastically reduced reimbursement levels caused in large part by the managed care industry.

Last December President Bill Clinton signed into law an act that will provide substantial funds to compensate children’s hospitals for the training and research cutbacks they have had to impose as reimbursement from private industry dries up. The move is part of his administration’s commitment to improving the state of children’s health in the U.S.

The new grant money for the 60 freestanding children’s hospitals with teaching programs addresses two of his priorities, Clinton explained in a statement issued in conjunction with the December 6 bill signing. It ensures "that our nation’s children, especially those who suffer from complex or unusual diseases, continue to receive the highest quality care that our health care system can provide," he said, and will also foster the development of "the scientific evidence that we need to improve the quality and safety of our health care system."

The President stressed that in a health care market in which managed care companies call most of the shots, teaching hospitals are forced to scramble to cover the "significant costs" of conducting training and research programs.

"While other teaching hospitals receive support for these costs through Medicare, children’s hospitals receive virtually no federal funds," the President said, "even though they train nearly 30 percent of the nation’s pediatricians and nearly 50 percent of all pediatric specialists."

He pointed out as well that these usually urban hospitals are the "safety net" protecting the "poorest, sickest, and most vulnerable children." They also conduct vital research on children’s health issues, he noted.

"We have always had to struggle to fund graduate medical education," said Mina Dulcan, M.D., head of the department of child and adolescent psychiatry at Children’s Memorial Hospital in Chicago and a professor of psychiatry at Northwestern University School of Medicine.

These hospitals have long had to rely on private fundraising "and almost resorting to bake sales" to support graduate medical education. Yet children’s hospitals "train a substantial portion of the country’s pediatricians and pediatric subspecialists, as well as child and adolescent psychiatrists," Dulcan pointed out in an interview with Psychiatric News.

"If we didn’t make this progress toward equity with other teaching hospitals. . .we would have to rethink the amount of graduate medical education we can continue to provide," she noted.

Calling the new funding program "a very good start," Dulcan said it "enables us to continue our commitment to high-quality medical education."

The Clinton administration convinced Congress to appropriate $40 million to get the program started—the full amount he requested. He praised First Lady Hillary Rodham Clinton for spearheading the effort to get the money included.

These freestanding children’s hospitals have long been at a funding disadvantage, even before managed care reduced teaching hospitals’ income. Most other teaching hospitals receive substantial funding for graduate medical education from Medicare, but since children’s hospitals treat very few Medicare patients, that source has never been an option.

The same act that will boost funds for research and graduate training at children’s hospitals changes the name of the Agency for Health Care Policy and Research to the Agency for Healthcare Research and Quality and funds that agency through 2005.

Its new name reflects an increased emphasis on providing information necessary for physicians to provide quality health care to their patients, Clinton noted.