Why Should Delaware Care?
Both Kent and Sussex counties are designated health care shortage areas, with residents experiencing access barriers. A new proposed ChristianaCare campus located within the Sussex County seat, a town with a population of more than 7,000, could help close that gap.
ChristianaCare, Delaware’s largest health care system, announced Thursday it aims to open a new $65 million campus in Georgetown, marking its first significant entrance into Sussex County, the state’s fastest growing region, but one that is already marked by competition in health care.
The health care system expects its new facility, which would offer emergency beds, behavioral health care, specialty care and primary care, to open by 2028. It is partnering with health care-focused developer Emerus Holdings to build the facility at 20769 DuPont Blvd., just south of the Bridgeville Road intersection.
It’s not a given, however, as the new facility still requires regulatory approval by Delaware’s Health Resources Board, which provides oversight on plans to expand health care services in order to ensure that they don’t drive up the costs of care for consumers.
Five years ago, that board denied a similar project by local competitor Beebe Healthcare.
ChristianaCare’s new facility would also come as federal funds will soon start to flow into Delaware’s southern counties to support rural health, and the hospital system continues its expansion both in and outside the state.
After a failed bid to merge with Southern New Jersey’s Virtua Health, the Georgetown plans could indicate that ChristianaCare sees more opportunity in its own backyard, and is willing to disregard the loose geographic monopolies that health care has enjoyed for decades in Delaware.
“This new campus will help close gaps in access by bringing high-quality, equitable and more convenient care directly into the community that needs it most,” ChristianaCare’s CEO Dr. Janice Nevin said in a statement. “Our goal is simple: ensure that every Delawarean can access the care they need, in the right place at the right time.”
ChristianaCare in growth mode
The health care system says it expects the new campus to occupy 42,000 square feet on the outskirts of Georgetown’s city center. ChristianaCare framed its decision to expand into Georgetown as part of a commitment to serve Delaware’s aging population.
Separately, ChristianaCare announced in July it would spend $865 million to invest in Delaware health facilities across the state. One of those projects was a new cancer center in Middletown as part of its larger expansion into the suburbs south of the C&D Canal.
In a statement to Spotlight Delaware, a spokesperson for ChristianaCare said the project would not rely on the incoming federal dollars and would be part of its $865 million investment.
“We began this process more than a year ago with an in-depth market analysis to better understand the critical health care needs in Sussex County,” the spokesperson said.
ChristianaCare has also made moves out of state, as it looks to expand in the greater region.
Since 2020, ChristianaCare has ventured deeper into the suburban Philadelphia health market, purchasing defunct hospitals and building its own in the surrounding towns. The hospital system announced last year it would partner with the Children’s Hospital of Philadelphia, better known as CHOP, leaving Delaware’s chief pediatric hospital on the sidelines.
However, late last year the hospital and New Jersey-based Virtua Health terminated a letter of intent they signed this summer that had signaled the health systems were considering merging in the coming years.
Combining the current ChristianaCare and Virtua Health footprints would have created a system covering more than 10 contiguous counties in New Jersey, Delaware, Pennsylvania and Maryland, with more than 600 facilities, nearly 30,000 employees and more than 500 residents and fellows.
The deal also would have required numerous regulatory sign-offs in both states, pitting potential hurdles to completing the deal. That included a review by attorneys general in Delaware and New Jersey because both systems are not-for-profits.
In Delaware, the prospect of an out-of-state merger was met with skepticism from Gov. Matt Meyer, who challenged the move when asked about it at a press conference in July.
“I think when any medical practice in Delaware, and especially nonprofit hospitals, get some positive return from serving Delawareans’ health, that money should be reinvested in Delaware, not in another state,” Meyer said.
Entering Sussex market
For decades, Delaware’s three major health care systems largely fit into geographic monopolies: ChristianaCare serving New Castle County, Bayhealth serving Kent County and Beebe Healthcare serving Sussex County.
Over the last five years, however, a health care arms race has heated up between Bayhealth, Beebe and now TidalHealth, coming up from Salisbury, Md. They have all built or broken ground on major projects in places like Lewes, Milton or Millsboro in recent years.
That comes on the back of a post-COVID population boom in Sussex County. The region is now designated as a “Medically Underserved Area” by the federal government, with projections showing that the population will increase from 237,000 in 2022 to over 361,000 by 2050. The county is also rapidly graying, as the population growth is largely driven by retirees who will demand more health care needs.
The arrival of ChristianaCare, which to date only had primary care offices in Milford and Rehoboth Beach, will bring needed resources, but also new competition to the crowded market. Representatives from Beebe and Bayhealth declined or didn’t respond to a request for comment on ChristianaCare’s plans.
A new Certificate of Need test?
The proposal by ChristianaCare may be the biggest test of the state’s Certificate of Need law in years, especially as the booming Sussex County community is frequently requesting more health care options and Republicans decry the existence of the regulatory oversight.
In 1974, the federal government was trying to tamp down rapidly rising health care costs in America – the cost of hospital stays doubled between 1967 and 1974, and required all states to establish Certificate of Need boards that would review proposed health care facility and equipment expansions, which were thought to be unnecessarily driving up the cost of care.
It was repealed in 1987, but many states chose to continue utilizing such boards. In Delaware, the process was renamed the Certificate of Public Review in 1999 and placed under the Health Resources Board, a 16-member panel that meets monthly to review plans for new health facilities or significant expansions of existing ones.
In 2019, the board was central in a debate over whether to allow Beebe to build a freestanding emergency room in Georgetown. It ultimately denied that project, saying it was too close to Bayhealth’s Milford campus and Nanticoke Hospital in Seaford.
The board was also expected to be critical of plans by Bayhealth to build its own freestanding emergency room in Milton, which led the Dover-based health system to pull its plans.
In the years afterward, state legislators looked at weakening the board’s powers, but the proposals ultimately never proceeded. The cause of repealing the board has become a key topic for Republicans in recent years as health care costs have risen again.
The board has also been more lenient in its post-COVID reviews, however, as health care demand has also markedly grown. Bayhealth ultimately was approved for its Milton ER, and it opened the facility in 2023, while Beebe broke ground in recent months on a Millsboro ER.
The Delaware Health Resources Board is set to meet at 2 p.m. Feb. 26, when the board is likely to acknowledge it has received ChristianaCare’s proposal. No agenda has been posted, but a vote on the ChristianaCare project would likely take place at a later meeting.
Still, members of the public are able to comment.
Get Involved
The Delaware Health Resources Board will meet at 2 p.m. on Thursday, Feb. 26, at the Herman M. Holloway Sr. Campus in New Castle. Information about virtual attendance can be found here.