Why Chicago's Lurie is expanding when smaller hospitals are turning away from pediatrics

As smaller area hospitals close or consolidate their pediatric wards, Lurie Children's Hospital in Chicago is doing the opposite: launching a high-profile fetal surgical center—one of only a few in the world—and, separately, beginning a $51 million project to add 48 beds for critically ill kids and newborns. Meanwhile, executives are gearing up to pitch a second expansion phase to the board later this summer.

Lurie's pedal-to-the-metal approach stands in stark contrast to what's happening at many community hospitals, most recently Mount Sinai Hospital on the West Side. Among those sitting on the wrong side of a decades-long shift in pediatrics toward high-end specialty care for complicated cases—and cheaper outpatient care for everything else—Sinai announced in June that it will close its 24-bed children's ward due to lack of demand. The Chicago area has lost 140 children's beds over the past four years, by Lurie's count.

Meanwhile, the Streeterville-based powerhouse keeps growing, reporting an 8 percent increase in 2016 operating revenue, to $922.5 million. Five years ago, it opened a shiny new lakefront campus—adjacent to Northwestern Memorial Hospital, Northwestern's Feinberg School of Medicine and the new Shirley Ryan AbilityLab—and it is now luring big-shot faculty from the nation's best children's hospitals. "We've really created a crown jewel of an academic medicine center," says Lurie COO Michelle Stephenson.

One of the hospital's biggest "gets" since it relocated from Lincoln Park in 2012 is Dr. Aimen Shaaban, a world-renowned fetal surgeon who started at Lurie this month after being recruited from prestigious Cincinnati Children's Hospital Medical Center. He's one of fewer than two dozen surgeons in the world who do in-utero surgery to correct congenital defects before birth. He's also the force behind Lurie's new Chicago Institute for Fetal Health, which it hopes will draw patients from well beyond Chicago and, indeed, the U.S. "Chicago should be the destination for all fetal care, with its central location and big airports," Shaaban says. "It should not be a center—it should be the center."

Lurie isn't alone in its ambitions. Last fall, Boston Children's Hospital received the green light on a $1 billion expansion, while Cincinnati Children's unveiled plans this spring for .

Lurie's local competitors, University of Chicago Medicine Comer Children's Hospital and Advocate Children's Hospital, are bulking up their inpatient facilities, too. Comer recently added six neonatal intensive care unit beds, bringing its total to 213, while Advocate will add 11 NICU beds by next year to its pediatric base at Advocate Christ Medical Center in Oak Lawn. (The health system brands its children's hospital across two locations, totaling 252 beds: Christ in the south suburbs and Advocate Lutheran General in the north, in Park Ridge.)

Parents who want the best for their children exacerbate this gulf by going directly to top-ranked specialty children's hospitals even when an illness doesn't require that level of expertise. "Boston is a classic example," Ginsburg says. "Lots of patients who need (less-acute) care like to go to the academic medical centers because of the brand. And so Massachusetts has the highest health care spend of any state."

Lurie's Stephenson says her hospital has tried to combat this through what she calls "right care, right place, right cost" partnerships designed to keep children who aren't critically ill in their own community hospitals rather than ferrying them downtown. It has struck a variety of partnerships with 16 hospitals—for example, around-the-clock hospitalist coverage for pediatric patients with less-serious illnesses at Adventist Hinsdale Hospital.

Comer and Advocate, too, have connected with dozens of other hospitals to ensure healthier kids can get care in their own communities. Advocate maintains pediatric space at its 10 other hospitals outside Christ and Lutheran General, even when spaces are not filled, says Robbins, its strategy chief, and continues to expand its outpatient relationships in suburbs including Libertyville and Elgin. Comer, which began partnering with other places 25 years ago, today works with 15 hospitals to provide a network of perinatal experts, including coverage as far away as Community Hospital in Munster.

Maintaining a far-flung presence isn't just goodwill. It could be viewed as a strategic business move, too. The booming peds business isn't likely to last long term, given declining birthrates. (Ginsburg points out that immigration will prop up the U.S. child population for a while, but it's unclear whether immigration rates will also begin to fall.) A sizable regional footprint is important to keep Lurie's growing number of beds filled well into the future.

"We look at trends in where the kids are coming from, and we're seeing growth outside of the Chicago metropolitan area," Stephenson says. "We're becoming much more of a regional, national and international draw."

"Why​ Lurie​ is​ expanding​ when​ smaller​ hospitals​ are​ turning​ away​ from​ pediatrics"​ originally​ appeared​ in​ Crain's​ Chicago​ Business.