This appeared on Bloomberg Opinion.

Parents across the U.S. are experiencing the unthinkable: There simply aren't enough hospital beds to treat their sick children. A surge of respiratory viruses has contributed to the shortage, but the root cause is purely financial. Pediatric wards and hospitals have been shutting down for years because they make no money. Preventing future crises will require sustained investments in areas of the health-care system that have long suffered from neglect. In the meantime, hospitals should make better use of existing resources to ensure that kids receive needed care.

Some closures of children's hospitals make sense. Thanks to medical advances, kids no longer need extended hospital stays for routine treatments, such as getting their tonsils removed. As money-losing community hospitals are merged into larger systems, moreover, they're closing pediatric units and sending young patients on to more specialized institutions in their networks. Hospitals say this allows them to hold down costs and focus resources on kids with the most acute needs.

The recent surge in pediatric illnesses, however, has exposed flaws in this model. That's partly because the U.S. health-care payment system is creating perverse incentives. Child patients, who typically don't get hip replacements, aren't as lucrative as adults. Roughly half of them are on Medicaid, which generally offers much lower reimbursement rates than Medicare. The payment gap between Medicaid and commercial insurance is even greater. Bringing Medicaid rates in line with Medicare would go some way toward encouraging hospital systems to expand their pediatric-care capacity - but since such decisions are made at the state level, the benefits are likely to be distributed unevenly.

A more sustainable strategy would be to boost hospitals' incentives to train and hire pediatricians. Currently, the federal government funds medical residents who care for adults at double the rate of their peers in pediatrics, which means hospitals are losing money on the latter. While Congress's latest spending package gives residency programs for pediatrics some extra cash, it doesn't come close to closing the gap. The government can and should do more to increase the supply of pediatricians - for instance, by offering training grants and targeted student-loan forgiveness for doctors working in underserved areas.

Another approach is to maximize the resources at hand. That should start with better equipping local hospitals to handle kids' cases, even without a full pediatric staff. During the pandemic, some community hospitals used telehealth to coordinate more complex care and avoid transfers to regional facilities. This is a promising start - but further investments will be needed to upgrade data- and record-sharing capabilities and train doctors and nurses currently geared toward older patients. (Children aren't little adults, as the saying goes.)

Finally, hospitals would be better equipped to handle routine admissions, including acute respiratory viruses, if emergency-room beds weren't taken up by young mental-health patients. Every night, anywhere from 1,000 to 5,000 youths are "boarding" in the country's 4,000 ER departments, stuck until they can be transferred to a psychiatric treatment program or another facility. It can take weeks, even months, for a spot to open up, leaving kids in an environment ill-suited for long-term treatment, watching television for hours on end, missing school and disconnected from their communities.

One solution is to expand the use of day programs, which offer an effective transition to outpatient care for young mental-health patients. More generous government workforce grants aimed at pediatric workers would help to address staffing shortages in such facilities and improve worker retention.

The financial challenges facing pediatric care are considerable. But sensible investments in education and training, along with a smarter allocation of resources, can relieve stress on the system and improve health outcomes for all children. They deserve nothing less.