Game-Changer: $2 Billion Pediatric Hospital to Boost Economy & Children’s Health

Thank you for joining us this morning.
 
What do Georgia, Tennessee, Florida, and Virginia all have that North Carolina doesn’t? A freestanding hospital that exclusively serves pediatric patients.
 
North Carolina may soon join the club through a joint venture announced this week between UNC Health and Duke Health. The health systems hope to break ground by 2027 on a six-year, $2 billion construction project to build out a 100-acre campus for North Carolina’s first children’s hospital.
 
The venture, called “NC Children’s,” hasn’t yet identified a location, but officials expect to locate the hospital somewhere in the Triangle region.
 
“This campus through its construction and operation will create thousands of jobs and be among the largest economic development projects in the history of the state of North Carolina,” Senate Leader Phil Berger said at an event announcing the plans. “This is a win for the economy and for our children’s health and for our state’s infrastructure.”
 
He’s probably right.
 
Take Children’s Health Care of Atlanta as an example. The hospital employs 13,000 people and serves pediatric patients from every one of Georgia’s 159 counties. It contributes $3 billion to the regional economy every year. Beyond the immediate impact of the hospital’s clinical services, it’s also a hub for research, including clinical trials.
 
The North Carolina hospital is projected to return $26.8 billion to the region’s economy over 20 years.
 
But before all that will be the massive construction project. Officials expect a 250,000-square-foot ambulatory center to anchor the campus, with more than 8,000 construction jobs needed for the multi-year buildout.
 
With North Carolina’s standing as the fourth-fastest growing state in 2024, it’s hard to quibble with the notion that demand for an in-state children’s hospital will be strong. UNC Health and Duke Health plan to transfer all their pediatric care to the new hospital. In his remarks, Gov. Stein said, “It turns out that last year, Children’s Flight for Hope, which is a charity that flies children across the country to get health care that they need, flew more children out of North Carolina than any other state in this country.”
 
The “build it and they will come” logic seems sound, but the “build it” phase requires a massive fundraising operation. The North Carolina General Assembly put the first dollars into the hat with a $140 million appropriation last year as part of a $320 million total project authorization. But that’s barely 15% of the projected cost. Richard Moore, a former state treasurer and current CEO of First Bancorp, will chair the fundraising campaign, Business NC reported.
 
The hospital will almost certainly feature substantial services for children’s mental health. Indeed, “the hospital will include a children’s behavioral health hospital” was part of the four-sentence description in the recent state budget allocation.
 
In 2023, 39% of high school students reported feeling “sad or hopeless,” and 18% reported they “seriously considered” suicide, according to EdNC. Debate rages about what’s causing the spike in adolescent mental health challenges, with Jonathan Haidt’s book “Anxious Generation” sitting on the New York Times bestseller list for 43 weeks (he largely blames devices and social media).
 
But no matter the cause, it’s undeniable that more North Carolina children than ever before require some sort of professional mental health intervention, and those services will be a major component of NC Children’s.
 
The kickoff to a major project is almost always the easiest part of the endeavor. Site selection may prove a thorny and expensive challenge. And nobody can predict what the labor market and economy might look like in the next decade, both of which will impact construction costs.
 
Still, the benefits of the end product seem as close to a sure thing as one can find. North Carolina is a big and growing state, and it’s one of the only states in the region that doesn’t yet have a children’s hospital. Perhaps that will all change by 2033.