Nemours Children's Health System, best known for the Alfred I. duPont Hospital for Children in Wilmington, is increasing the competition for pediatric care in the Philadelphia region.
Nemours, which is backed by the $5 billion Alfred I. duPont Testamentary Trust, will break ground Friday for a $45 million specialty clinic in Deptford, claiming a location where rival Children's Hospital of Philadelphia has not yet planted a flag.
"We have a lot of patients from Southern New Jersey, especially the areas just over the Commodore Barry Bridge and the Delaware Memorial Bridge," said Roy Proujansky, chief executive of Nemours' operations in the Philadelphia region.
Including a $397 million hospital in Florida opened in 2012 and other operations there, Nemours had $809.8 million in net patient revenue in 2014.
The 65,000-square-foot Deptford facility, scheduled to open next summer, will bring Nemours' front door closer to those South Jersey patients and provide a platform for further expansion. It will be Nemours' biggest investment outside Delaware and the areas of Florida that Alfred Irenee du Pont designated as the beneficiaries of his fortune, officials said.
Children's, meanwhile, which had $1.9 billion in patient revenue in the year ended June 30, is building a large specialty-care center in Concord Township, a 20-minute drive from the duPont hospital along Route 202.
The region also has a third, free standing pediatric hospital, St. Christopher's Hospital for Children in North Philadelphia. The rivalry is unusual.
In most metropolitan areas, adult-oriented general hospitals essentially cede their pediatric patients to one dominant children's hospital, said J. Kevin Holloran, an analyst with Standard and Poor's Ratings Services.
"It typically is a mutually beneficial relationship. You rarely see the competitive pressures like you might be seeing in the Philly market," Holloran said.
Children's market share in the overall region was 22 percent, compared to 11 percent for Nemours, according to a report last year by S&P.
As to whether the competition in pediatric health care benefits the customer, Proujansky said he had mixed feelings.
"I do think that patients and families deserve choice," he said. "If somebody has just told you that your child has something very, very serious, then the course of action is very scary. I think many of us would really want to confirm that by hearing it from somebody else who does the same thing."
The downside, Proujansky said, is that competition causes two well-off health-care providers to "spend dollars in redundant services for a population, rather than supplementing each other's capabilities in a way that is thinking about the needs of the entire population."
This dynamic applies to Nemours and Children's, and also to Penn Medicine and Jefferson Health System, Proujansky said.
As a society, "we need to think about that as an issue," Proujansky said.
Stuart Fine, longtime CEO of Grand View Hospital in Sellersville and now a professor at Temple University's Fox School of Business, was pleasantly surprised to hear of Proujansky's "candid" remarks.
"Unfortunately, however," Fine said, "if you sit back and try to take the moral high road, your market could be taken right out from beneath you and you could find yourself so financially compromised that you're no longer able to exist."
Another factor in Nemours' expansion push - as is the case with any system that offers high-end, complex treatments - is the need for significant patient volume.
"You can't do something that's really, really technically difficult a couple of times a year and be great at it," Proujansky said.
For a pediatric system, partnerships with adult hospital are one way to get those patients.
Nemours lost two big South Jersey partners, Virtua and AtlantiCare, in the last five years, but picked up Inspira, which has hospitals in Woodbury and Vineland, areas that will easily be served by the new Deptford facility.
The 30-acre site near the intersection of Route 42 and Route 55 was picked to make it accessible to the 500,000 children in six South Jersey counties, said Pauline Corso, administrator of the practice at Nemours.
It's a start, relative to Children's, which in January opened a specialty care center in Plainsboro, N.J., and is scheduled to open specialty and ambulatory surgery centers in King of Prussia and Concord Township this is summer.
Nemours has additional plans in Pennsylvania, where it is already aligned with Main Line Health and Jefferson, among others.
Proujansky offered no specifics, but said, "we are thinking a lot about Southeastern Pennsylvania."