By Zac Ezzone for the Triangle Business Journal

UNC Health and Duke Health’s joint effort to develop a standalone children’s hospital would receive a major boost from a budget proposal North Carolina lawmakers released Monday.

The state Senate’s proposed budget carves out $638.5 million to support the project, which involves Duke and UNC working together to build a 500-bed children’s hospital in the Triangle area. The hospital would address existing shortages in children’s health care and serve as a major driver of economic activity in the region.

This funding from the Senate would bring the state’s overall commitment to the project to $854.7 million. Health officials have projected the hospital to cost between $2 billion and $3 billion.

North Carolina remains one of the largest states in the U.S. without a freestanding children’s hospitals.

Dr. Wesley Burks, CEO of UNC Health and Dean of the UNC School of Medicine, in a statement thanked the Senate for the proposed funding, saying the “investment will save the lives of countless children for generations to come.”

The state House of Representatives has not released a budget proposal.

Most of the new capital for the hospital would come from funding the state previously awarded to NCInnovation, an organization focused on advancing university research into commercial ventures. The state’s 2023 budget directed $500 million to NCInnovation to form an endowment to generate interest the organization uses for its grant programs.

The Senate’s budget undoes this arrangement, transferring $100 from the endowment back to the state and $400 million to the UNC system Board of Governors to support the children’s hospital. NCInnovation would instead operate on a cash flow model with the state directing $25 million to the organization annually over the next four years.

The remaining $238.5 million for the hospital would come from the ARPA Temporary Savings Fund, according to budget documents. This is a fund established in connection with North Carolina expanding Medicaid in late 2023.

The Senate’s proposal exempts the hospital from certain certificate of need regulations to eliminate any potential barriers that could block the hospital from moving forward, Sen. Phil Berger said during a press conference Monday.

Dr. Thomas A. Owens, executive vice president and chief operating officer of Duke University Health System, said the organizations look forward to working with the N.C. House of Representatives as they advance their budget proposal.

“This incredible support from the state enables our planning to continue as we collaborate to create a world-class children’s campus,” Owens said. “This investment ensures children with the most complex health issues have access to highly specialized pediatric services right here in North Carolina.”

Duke and UNC earlier this year formed a new organization, North Carolina Children’s Health Inc. to lead the formation of the new hospital. The health systems are looking for more than 100 acres for a campus anchored by the hospital. Officials say the location could be announced as soon as this summer.

The health systems plan to begin construction on the campus by 2027 with work expected to take about six years. When it opens, Duke and UNC will move their pediatric programs to the new campus.

The campus will include the hospital, a behavioral health center, outpatient clinics, research and teaching facilities and hospitality houses. The hospital is expected to have a daily staff of about 3,000 people and more than 8,400 jobs in total, including in construction. Duke and UNC expect the hospital to generate more than $26.8 billion in state GDP over 20 years, according to details the health systems shared earlier this year.

The preceding article originally appeared on April 15, 2025 at the Triangle Business Journal’s website and is made available here for educational purposes only. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 106A-117 of the U.S. Copyright Law. Any views or opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of the Carolina Leadership Coalition. Photo above: UNC Children’s Hospital in Chapel Hill courtesy of UNC Health