Penn Medicine will build a $295 million cancer center at its Princeton Medical Center

The University of Pennsylvania board on Thursday approved a Penn Medicine plan to build a $295 million cancer center at Princeton Medical Center in Plainsboro, N.J., which Penn has owned since 2018.

A health system executive said at the board meeting in University City that Princeton Medical Center needed a differentiator in advanced medicine to help it stand out amid increased competition from RWJ Barnabas, one of New Jersey’s largest health systems, and New York’s Memorial Sloan Kettering Cancer Center.

Kevin Mahoney, CEO of the University of Pennsylvania Health System, told board members that he and other health system executives considered other possibilities for adding to Princeton’s offerings, but decided that cancer treatment was the way to go.

“Cancer is our sweet spot, so we opted to push forward on an advanced platform around the cancer program,” Mahoney said. Penn also expanded cancer services at Lancaster General Hospital since acquiring that facility in 2015.

The approved plan calls for the Plainsboro cancer center to have more than 40 exam rooms, more than 30 infusion chairs, and two linear accelerators for treating cancer, according to a presentation at the board meeting.

In addition to the cancer center, Penn plans to build a 1,161-space, six-level parking garage for $56 million and an outpatient imaging center for $50 million. Penn hopes to raise $30 million in donations toward the total $401 million cost of the three projects.

As is true across the hospital industry, the shift of many surgeries to outpatient settings has hurt the profitability of Princeton Medical Center, health system chief financial officer Keith Kasper said. Health-care providers get less money for outpatient surgeries than inpatient surgeries.

“You really need this differentiator to bring Princeton back into a place of financial stability,” Kasper said.

Staff writer Susan Snyder contributed to this article.