Two years after acquiring Lourdes Health System, Virtua Health, South Jersey’s largest hospital network, announced that it has dropped plans for a $1 billion replacement hospital in Westampton and will instead make major renovations to its hospitals in Camden and Mount Holly.

The budget for the renovations, expected to take five years, was not disclosed.

“Virtua and Lourdes coming together in 2019 allowed us to re-envision how to best deliver care throughout the region. Our integration was, in some ways, accelerated by the pandemic, and now we are moving forward as a unified, mission-driven organization,” said John Matsinger, Virtua’s chief operating officer.

Virtua acquired Our Lady of Lourdes Hospital in Camden and Lourdes Medical Center of Burlington County in Willingboro from Trinity Health, a national Catholic health system, in a deal valued at $60 million and agreed to invest at least $205 million in improvements at the Lourdes facilities. Of that amount, $105 million was slated for a new electronic medical records system for Lourdes.

Since acquiring the financially struggling Lourdes system, Virtua, which also owns hospitals in Marlton and Voorhees, has had two annual operating losses. The system had an operating loss of $18.1 million on $1.6 billion in revenue in 2019 and an operating loss of $8.5 million last year on close to $2 billion in revenue.

The 2020 loss would have been worse without $137 million in federal CARES Act grants.

One goal at Our Lady of Lourdes includes efforts to “cement” the hospital’s position as “a regional destination for high-acuity cardiovascular, neuroscience, and transplant services,” Virtua said. Aiding that effort will be Penn Medicine, which has had an alliance with Virtua in cancer care and neurosciences since 2015. That deal was renewed for three years last October.

The renovations at Our Lady of Lourdes include expanded parking, a new main lobby, and a conversion of the hospital, licensed for 301 beds, to 100% private rooms. Virtua has not decided how many beds the hospital will have when the changeover is complete, according to Stephanie Fendrick, Virtua’s chief strategy officer.

The plan for Mount Holly, which is licensed for 339 beds, calls for 10 new operating rooms, new labs and medical suites, an expanded emergency department, and renovated hospital units, Virtua said.

“The scope of this plan is massive; all patient-facing areas will experience some degree of transformation,” said John Kirby, president of Virtua Mount Holly and Virtua Willingboro hospitals. “When this renovation is complete, we will basically have a brand-new hospital.”

Virtua’s plans come on the heels of big investments by South Jersey competitors. In late 2019, Inspira Health opened a $365 million hospital in Mullica Hill, replacing Underwood-Memorial in Woodbury. Jefferson Health late last year completed a $250 million set of projects at its hospital in Cherry Hill.

There’s more to come. Cooper University Health Care last month purchased the former Sears location at the Moorestown Mall for use as a specialty-care location slated to open in 2023. Cooper declined to share further details on that deal.