Nanticoke explores merger with Salisbury-based Peninsula

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Rose, left and Crouse.

Nanticoke Health Services, Seaford in talks to merge with Eastern Shore health care giant, the Peninsula Regional Health System.

The talks were confirmed in a letter that went out to the community from President Steven Rose and Board Chair David Crouse.
“More than a year ago-acknowledging the changing health-care environment and being in a strong financial position-the Nanticoke Health Services Board of Directors began looking at the feasibility of an affiliation that allow us to remain a strong, locally-focused, comprehensive care system,” the letter indicated.
“With all of this in mind, our Board has voted to enter into negotiations to affiliate with Peninsula Regional Health System located in Salisbury, Maryland. Details of the organizational and operational structure of this affiliation will be worked out as we move forward,” Crouse and Rose wrote.
The letter continued, “Peninsula Regional is a cultural match and shares our vision of ensuring that western Sussex County residents continue to benefit from our continuum of care and community health programs.This was a very important part of our considerations.”
Western Sussex is growing but does not have the income levels of the more affluent coastal areas of the county. The area has also seen a decline in manufacturing as the Invista nylon plant has reduced its headcount.
Nanticoke has strengthened its finances under Rose, but is located in a county with three health care systems. Dover-based Bayhealth has a new campus in northern Sussex County, with Lewes-based Beebe adding facilities to the west.
In 2017, the last year public information is available, the nonprofit Nanticoke system reported earnings of $1.8 million on revenue of $146 million.
Peninsula is the top health care system on the Eastern Shore, but is heavily regulated by the State of Maryland and is seeing a rapid consolidation of health care systems in the Free State. A major player on the Eastern Shore is the University of Maryland medical system.
In 2017, Peninsula reported a profit nearly equal to the figure for Peninsula but posted a loss of more than $34 million a year earlier.
With Peninsula, much smaller Nanticoke would have more financial strength in building outpatient centers that are becoming a bigger part of the health care system.
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