Delaware hospital systems are surfing Sussex County's gray wave of seniors, letting it guide land purchases and expansion of services in the state's most rural county.
Bayhealth plans to purchase 18 acres of land in Sussex County, not too far from the $314 million hospital it's building in Milford.
Beebe Healthcare is creating a new campus in Millville — which will be equipped with an emergency department and cancer program — and has expanded its outpatient and primary care services.
And Nemours/A.I. duPont Hospital for Children is planning to increase its presence by occupying 35,000 square feet of space at the new Bayhealth Sussex Campus in Milford.
Some hospital executives attribute these expansions to a growing need in a county where the population of people over the age of 65 is expected to reach 80,000 people in 2030 — almost double what it was in 2010.
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"As this population grows, obviously it puts a burden on the healthcare facilities," said Alex Sydnor, vice president of external affairs at Beebe. "And we're responding by expanding."
Organizations are also now being rewarded by insurers for keeping people out of the hospital, resulting in more and more health systems focusing on outpatient services.
Health care experts say systems snapping up land in Sussex reflects a national trend among hospital systems. As the population continues to age and live longer, the demand for health services increases. And at the same time, many health systems nationwide are expanding to improve their leverage with third-party payers.
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Stuart Fine, who served as a health system CEO for more than 30 years and now teaches at Temple University, said hospitals across the country are becoming more interested in "claiming turf."
"The more market presence a health system has, the more leverage it has with the different third-party players," said Fine, management program director for Temple’s College of Public Health.
The implementation of the Affordable Care Act has indirectly supported hospitals' efforts to expand, Fine said. Obamacare has substantially reduced the number of "absolutely uninsured patients" and decreased the level of charity care, or discounted care, hospitals provide for low-income patients, he said.
"They would have been less likely to do that if patients in that area were uninsured," Fine said of hospitals expanding.
Thanks to developments in technology, many inpatient treatments are now outpatient services, Fine said. This has led hospitals to expand their outpatient locations.
It's also typically less expensive to add square footage and services at outpatient sites than it is at an inpatient facility because building codes are "much less rigid and demanding," Fine said.
This is the case for Beebe Healthcare, which announced last month it is forgoing plans to add more beds to its Lewes campus after officials realized fewer people are being admitted to the hospital than in previous years.
Last summer, Beebe announced it was going to add an additional 60 beds in a four-story tower on its Lewes campus. Hospital officials said at the time this would help accommodate the growing population, which includes a lot of retirees relocating to Sussex County.
Construction will start this fall on a new Beebe campus in Millville, which will include an emergency department and a second location for the hospital system's cancer program. A specialty surgical hospital on the Rehoboth Beach campus is expected to break ground in 2019.
Beebe Healthcare $180 million expansion includes ER, cancer center
Sydnor, the Beebe vice president, said growing outpatient access has been a "critical" priority for the hospital system. This is why it's designating $180 million in expansion efforts, most of which will go toward outpatient services, he said.
The population in the southeast corner of Sussex County, from Milton to the Maryland border, grew 16 percent in the last seven years — faster than the population growth of the county overall, Sydnor said. It's projected to grow by another 8 percent in 7 years.
As a result, Beebe opened an outpatient center in Georgetown and expanded diagnostic imaging and rehabilitation services in Millville three years ago.
Several years ago, the hospital system ran a seasonal emergency department from Memorial Day to Labor Day, Sydnor said. Due to the growing population of full-time residents, Beebe will begin construction for a year-round emergency department in Millville this fall.
While it's becoming common for health systems to expand, many are doing it by merging with or purchasing smaller hospitals — not by building new health facilities, said Dr. Michael Halpern, a public health professor at Temple.
What's happening in Delaware, specifically with Bayhealth's plans to open a new $314 million hospital, is not typical, he said.
Bayhealth CEO Terry Murphy has said the new Milford hospital is the largest financial commitment in Sussex County history. The health system is also in the process of purchasing an 18-acre property in Harbeson, located along U.S. 9 at the intersection of Hudson Road.
The hospital system also added a 5,000 square foot building to its Quinn Medical Offices, located at 800 North DuPont Boulevard, for primary care doctors. Those physicians, who moved in this winter, joined cardiologists, OB-GYNs and endocrinologists who practice out of the offices.
Dr. Gary Siegelman, Bayhealth's chief medical officer, said the system has been trying to "aggressively care for people who have chronic conditions and haven't gotten that level of support in the past." Many of those patients are older people, Siegelman said.
The Sussex Campus in Milford will have more centralized services for all patient populations, he said.
Nemours will offer a range of specialty care services — from cardiology to behavioral health and weight management — on the first floor of a medical office being built at Bayhealth's new Sussex Campus. It will also have space for its senior clinic, which offers free vision, hearing and dental care for older Delawareans who can't afford care.
Unlike other hospital executives, Nemours President Paul Kempinski said the hospital's expansion stems from the need to improve access for Sussex County families, not a growing population.
Many Nemours patients have to travel two to three hours with their families for care in New Castle County. While there are satellite offices in Seaford, the hospital realized a much more "significant" program was needed, Kempinski said.
Former Milford mayor Bryan Shupe said he believes Sussex County is likely entering a new era, in which people will no longer have to travel to Wilmington, Philadelphia and Baltimore for specialized care.
"In the last couple of years, the expansion has really helped our residents to feel safe at home that they have the specialists and the health care opportunities that they need," he said.
"I think Sussex County is going to be a pivotal player in health care."
Contact Meredith Newman at (302) 324-2386 or [email protected] and on Twitter @MereNewman.
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