Children’s National’s Walter Reed campus was ‘just a pipe dream.’ Now it’s going live.

By Sara Gilgore for the Washington Business Journal

For Children’s National Hospital’s future D.C. campus, the future is here.

A portion of the former Walter Reed Army Medical Center in D.C., transformed into the pediatric nonprofit health system’s pesearch and innovation campus, is fundamentally finished with construction after breaking ground in late 2018. Its team is now working through a fit out and punch list in the buildings housing its clinical care, genomics-research programs and tech-transfer initiatives.

“There were these old buildings that were used for so many years by the Army for research, and to be able to bring them up to modern standards and envision this campus an ecosystem for research and innovation for children in our nation’s capital?” said Dr. Kurt Newman, president and CEO of Children’s National. “A lot of people thought it was just a pipe dream, and here it is: a reality.”

The Walter Reed project’s elements

Today, cars fill spaces in the new garage, rooftop solar panels generate electricity for the community and people populate the campus. The organization’s Rare Disease Institute has started seeing patients, its Center for Genetic Medicine Research goes live by early summer, and both the hospital’s primary care department and Virginia Tech — the academic partner opening a biomedical research complex there — each move in later this year, Newman said.

Then there’s Johnson & Johnson Innovation’s 32,000-square-foot JLabs incubator, equipped to host up to 50 startups across pharmaceutical, medical device, consumer health and health technology sectors. That’s now open, welcoming its first group of resident companies including digital dermatology clinic and Startup to Watch K’ept Health, antiviral drug developer Lab11 Therapeutics, digital health company Acclinate and two Children’s National spinouts: AlgometRx, which is advancing a new medical device that measures pain; and Adipomics, which is developing a platform for diagnostics and treatment around childhood obesity.

The program also includes J&J’s Blue Knight collaboration with the Biomedical Advanced Research and Development Authority for companies advancing responses to health threats and emerging infectious diseases — an initiative that predates Covid-19.

The 12-acre property, located within a D.C. opportunity zone, has up to a million square feet of lab and research space for expansion. And with mixed-use development the Parks taking shape around the campus, Newman said, “this thing is just poised to take off like a rocket ship.”

The pandemic’s impact on the project — and the hospital

The phased opening comes after some pandemic-related construction delays that pushed the $215 million project’s delivery back a few months from the end of 2020, Newman said. “Covid also had an impact on the finances of our hospital, our core business, so we had to make a number of decisions to ensure that the financial health of the organization was strong.”

That meant slowing down expenses such as furniture and some other investments “just to help manage the finances during the pandemic,” he said. But it didn’t involve layoffs; the 8,100-employee health system, which includes about 900 physicians, maintained its workforce through the crisis, he said.

Though the hospital focuses on children, who don’t typically suffer from Covid-19 to the degree that adults do, it still cared for “a substantial number of kids” with the coronavirus. That required Children’s to increase its investment in supplies, drugs, testing and other measures to keep its employees safe while federal relief “wasn’t quite as strong for children’s hospitals,” Newman said. Revenue also took a hit when patient volumes dropped, he said, and the system had to put its 150-year birthday celebration and “all of the fundraising that goes with that” on hold in 2020.

The health system’s local expansion

But Covid didn’t force Children’s to scrap any of its plans — in some cases, it reinforced them. Its mental and behavioral health services, which formerly occupied the main hospital’s basement, opened in late June in its new home at the renovated Takoma Theatre in Takoma Park, not far from the Walter Reed campus. That’s as the pandemic has heightened the need for such services.

“It never felt right to me that we were almost creating a disincentive for families to seek care for their children with these problems,” Newman said.

Children’s National also opened in July a 60,000-square-foot specialty clinic in Lanham in Prince George’s County with services including cardiology, neurology, hematology, allergy, and sports medicine and orthopedics. That’s in addition to the health system’s new sports medicine center that opened in March on the ground floor of the former Discovery headquarters in Silver Spring, Newman said. “So through the pandemic, we’re continuing to grow and expand and plan for the future.”

Going forward, Children’s plans to be involved with clinical trials to study Covid-19 vaccines in children; it’s already immunizing kids over age 16.

It’s also having conversations with the District and George Washington University Hospital majority owner Universal Health Services (NYSE: UHS) — which will run a new community hospital on the St. Elizabeths East campus in Ward 8 — about how it might be involved with that facility, Newman said. Children’s already has a presence in the ER at United Medical Center, which that future hospital will eventually replace.

“So we’re in active discussions” with those players, Newman said, “about at a minimum, having that presence on that campus but certainly looking for other opportunities for delivery of pediatric services.”

Link to the full story