Nanticoke, Peninsula Regional CEOs look forward to extending exisiting relationship through partnership

By Mike McClure

With last week's announcement of the desire for a partnership or affiliation between Nanticoke Health Services and the Peninsula Regional Health System, the two organizations look to work toward coming together as one organization, which should take place this summer or fall once approval is given by state agencies.

"Seaford and western Sussex wants to keep a hospital in this area. The partnership assures we're still going to be here and be in business," said Nanticoke President and CEO Steve Rose. "I think change is difficult for everybody because of the unknown."

"It's new for us, it's new for them and I think we'll be taking that journey together," Peninsula Regional President/Chief Executive Officer Steve Leonard said. Leonard added that the two health providers will need to learn how to work togeter as one system once the partnership takes place.

According to Rose, the idea of a partnership was not a new one. Nanticoke was looking at potential partnerships and affiliations for at least 18 months. With some small hospitals around the country being forced to close their doors due to rising health care costs, hospitals like Nanticoke are looking to work with larger health systems.

"We've been toying with this for a long time, looking at different partners. It's not something we've taken lightly," Rose said. "Everything we do absolutely comes back to the mission (serve the public)."

Rose said that being part of a larger health system can help hospitals negotiate a better price in areas such as employee benefits.

"It's all about scale. The bigger you are the more you can negotiate contracts and equipment," said Rose.

Nanticoke Health Services has seen an increase in the amount of outpatient and inpatient services it has provided, but Rose said that figure doesn't always tell the whole story.

"More volume isn't enough to sustain you. You really have to look at the big picture," he added.

Rose pointed to similarities in the two health care providers' management styles as well as an existing partnership, in which they share supplies when needed, as key reasons why the Nanticoke board chose PRMC over other health care systems.

"Peninsula's always been a good neighbor of ours," Rose said. "Our culture and their culture is very similar."

He also said that Peninsula wants to work together with Nanticoke and learn from each other

"We're both serving western Sussex and together we can do a good job."

"It was definitely an honor to be selected," said Leonard, who also said the two hospitals have a good relationship. "This allows us to take the relationship with Nanticoke further and the to better serve the area."

Leonard said the longstanding relationship with Peninsula's neighbors to the north includes a good collaborative relationship between their medical staffs, something he would like to see taken to the next level once the partnership is official.

While Rose believes the change is necessary, he is proud of what Nanticoke Health Services has done, especially in the almost 11 years he has been a part of it.

"This is without a doubt the most incredible health system I've ever worked with. I'm very proud of what we have achieved together," Rose said. "We've made great strides. We've done a lot of great things and we want to hold on to that."

Under the new arrangement, which is still being worked out, the Nanticoke board would report to the corporate board, which would be made up of representatives from Peninsula and Nanticoke. Nanticoke will also have representation on the strategic committee.

While the new name of the hospitals have not been decided, it is believed that both Nanticoke and Peninsula will keep their names, possibly with another name attached to it.

"I'm hopeful we can keep a similar name or the same name," said Rose.

According to Leonard, 21 percent of PRMC's patients come from Sussex County. While PRMC offers more comprehensive services such as an open heart trauma facility, most patients would be directed to their local hospital under the proposed partnership.

Leonard said the goal would be to enhance the services that Nanticoke currently provides.

Both Leonard and Rose see the joint health care system having the same vision, to improve patient outcomes, improve the healthcare experience, and lower costs.

"That's the vision we'd like to create together," Rose said of what he calls the triple aim for patients.

While Peninsula will be looking to Nanticoke to provide services to patients from Sussex County so they don't have to go to Salisbury, it will look for Nanticoke to share its goal of engaging the community to live healthy and well.

Neither CEO sees the partnership causing an immediate impact on the employees at Nanticoke.

"I think ideally there is more opportunity in a larger system," said Leonard.

With last week's filing of the letter of intent, the two organizations are now working through a definitive agreement or due diligence. Along with that comes a certificate of public review, which is driven by the state of Delaware.

The expectation is that this process will be complete by summer or early fall. Both boards also have to agree with the terms and approve the afreement.

As for the future, Leonard sees the joint system, which includes a Peninsula facility in Millsboro and a Nanticoke facility in Georgetown, serving the lower half of Sussex County.

That could mean additional investment by the group on the eastern side of the county.

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