Why Should Delaware Care?
Hospital systems across the state are competing to serve a rapidly aging population and meet their care needs. At the same time, they are looking to close access gaps in the southern part of the state as Sussex County becomes a retirement destination for many in surrounding states.
Bayhealth leaders unveiled multiple expansion projects on Wednesday, including a new hybrid emergency room similar to its campus off Route 9 near Harbeson.
It also provided more details about its already announced $250 million expansion to its main campus in Dover.
It comes as healthcare systems across the state are preparing for an influx of retirees who require more frequent and complex care, particularly in Sussex County.
At a Wednesday press conference, Bayhealth leaders showcased seven projects that have already been approved or still require state regulatory approval.
Only one of those projects will need to be approved by the Delaware Health Resources Board, which approves large hospital expansions, according to the system’s chief operating officer, Kyle Benoit.
All of the projects are slated to be up and running by the end of 2029, but many of them will be complete before that date, likely by the end of 2027.
Bayhealth held the press conference at its main campus in Dover, often called Kent General, where the hospital’s CEO Terry Murphy and Benoit outlined the new projects and their potential impact in the region.
The hospital system is marketing the new renovations which will cost at least $373.7 million as the “Next Wave.” During the press conference, Murphy pointed to the rapidly aging state and the hospital’s aim to prepare for that demographic shift.
What are the projects?
Nearly all of the projects and expansions are in Kent and Sussex counties, except for a new hybrid facility in Smyrna, which is on the New Castle County side of the bifurcated town.
Some of the projects announced on Wednesday had already been publicly known, such as the $250 million Kent General expansion slated to bring six additional floors to the hospital, as well as dozens of new patient beds.
Additionally, the Kent General emergency room is also slated for renovations as the hospital plans to build 10 new low-acuity emergency room bays, as well as five behavioral health rooms, typically used for those experiencing a mental health crisis.
Other projects like a new hybrid emergency department in Smyrna will cost Bayhealth $52.6 million and operate 14 emergency bays. The facility would mirror another hybrid emergency department run by Bayhealth near Harbeson that offers emergency and walk-in care for patients.
Bayhealth already operates an emergency room in Smyrna off Carter Road, and said on Wednesday it intends to relocate those services to the new location, which would be located near the Smyrna Rest Stop on U.S. Route 13.
The old facility would be repurposed and Bayhealth would “backfill” other medical needs using the space. Benoit said Bayhealth intends to file a letter of intent with the Delaware Health Resources Board on Wednesday, and that it hopes to send its full application to the board in January 2027.
Separately, Benoit said the health system would expand its services and use of the Blue Hen Mall, which he said the hospital already mostly owns. In November, he said the hospital will purchase the remaining space it doesn’t own within the mall.
Benoit added businesses and operations already leasing with Bayhealth, like a U.S. Department of Veterans Affairs clinic, would continue to operate as normal and the hospital would honor its leases.
As for the hospital’s Sussex County locations, Bayhealth’s hybrid emergency room near Harbeson would also receive a $3.5 million renovation that would double its capacity.
Bayhealth would build new medical offices at its campus in Milford, which would bring an additional 105 specialty exam rooms close to the relatively new facility. According to a slide during the press conference, the new medical offices would cost $39.1 million.
Murphy pointed to Bayhealth’s reuse of spaces that otherwise may have not been active or serving the community, and how the hospital has transformed the spaces into that benefit patients.
“They’re serving the community without knocking it down,” Murphy said.
Downstate arms race
In recent months, Delaware’s hospital systems have been at odds and publicly clashing over proposals below the C&D Canal as they prepare for an onslaught of retirees.
All three of Delaware’s southern hospital systems formed a unified coalition to block two proposed ChristianaCare campuses in Georgetown and Camden, as market share becomes more valuable to healthcare providers.
Bayhealth in Dover, TidalHealth in Seaford and Beebe Healthcare in Lewes are all challenging the two downstate campuses, as the systems look to protect what has historically been their territory. Long the dominant player in northern Delaware, ChristianaCare has increasingly invested below the C&D Canal in recent years.
Spotlight Delaware reported in August that Bayhealth, Kent County’s primary health system, submitted a letter to regulators asking them to halt two proposed ChristianaCare campuses in Georgetown and Camden.
Those regulators, who sit on the Delaware Health Resources Board, were set to discuss that letter in their meeting on Aug. 25, but tabled the discussion to allow for some additional internal review.
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 in Sussex County.
But over the last five years, a health care arms race heated up between Bayhealth, Beebe and now TidalHealth, coming up from Salisbury, Md. They have all built or broken ground on major projects in locations, such as Lewes, Milton or Millsboro in recent years.
It follows 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.
But the downstate hospitals are hoping to convince the Delaware Health Resources Board that ChristianaCare’s plans would flood the market and offer redundant services.
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.
Both of those projects predated the population surge that has particularly struck Sussex County after the COVID housing market boom though.
