Growth Of Children's Hospitals Raises Adult-Size Questions

Sep 26, 2011

Many children's hospitals started out humbly, like Children's Hospital Boston, which began with 20 beds in a row house shortly after the Civil War.

Today, Boston Children's and many other leading independent children's hospitals are health care juggernauts with extensive facilities, lots of assets and millionaire CEOs, Kaiser Health News reports in a series of articles.

The hospitals are nonprofits, but you wouldn't know that looking at the bottom lines of many of them. They're pouring billions of dollars into new buildings, adding beds and equipment and staff at the same time Washington, the states and employers grapple with budget-busting increases in health care spending.

Hospitals strongly defend the need for new and bigger facilities, and often claim they're good for the economy because of all the jobs created. But nothing is free in health care: tax exemptions accorded nonprofits help to fund the construction, and all the costs of care ultimately are borne by taxpayers, employers and workers.

The average American doesn't focus on the question of cost, says Martin Gaynor, an economist at Carnegie Mellon University and an expert on hospital spending. "They look at children's hospitals and think, 'my goodness, we're helping poor kids," he says. "But who do you think is paying for all this?"

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