Maintaining mission and ensuring a high quality hospital is available within the community is central to the decision-making process for Nanticoke Health Services’ Board of Directors and Leadership Team.
Rural health organizations, such as Nanticoke, commonly work with partner organizations to close gaps in care and gain access to necessary resources. These partnerships help ensure the best possible care continues to be available for our community, long into the future.
Nanticoke has chosen to affiliate with Peninsula Regional Health System (PRHS) to continue the delivery of quality care and enhance medical services for the residents of Sussex County. While details of this affiliation will take time to work through, we want to keep you updated as we can.
As a member of our community, please refer to the Frequently Asked Questions below to learn more about what’s happening. If you have any questions about this document, please call us at 302-629-6611, ext. 8950.
Peninsula and Nanticoke Definitive Agreement:
Frequently Asked Questions
What does “definitive agreement” mean? As many know, we have been actively collaborating with Peninsula Regional Health System to affiliate and create a new larger health system. Last winter was the announcement of a signed letter of intent. This was non-binding and allowed each organization to take a deeper dive into the other’s operations; allowing for a due diligence period to be sure the organizations were a good match. Now, a definitive agreement (DA), also called an affiliation agreement, has been signed. This is binding and means both organizations have legally committed to come together as one organization. Together we will build a new Health System that encompasses Nanticoke, Peninsula, McCready, a physician enterprise and many other health-related services.
How will the DA help Nanticoke’s finances? Regardless of the agreement, Nanticoke (and PRMC) needs to perform operationally. The new Health System will allow for operational efficiencies and spread overhead costs while providing Nanticoke the necessary capital commitment.
Does the DA make a commitment about the hospital and our services? The hospital will remain for a minimum of ten years. Peninsula wants to grow Nanticoke’s presence and services and has no plans to close the hospital. It’s the intent of the new Health System to have both Nanticoke and Peninsula provide exceptional care the day after closing as it did the day before, and well into the future.
Does this mean Nanticoke and Peninsula are one organization? Almost…but not yet. There are both Federal and State approvals required. The FTC and the Delaware Healthcare Commission each need to approve the partnership. That process is progressing ahead of our expectations. Once the federal and state approvals are complete, we will set a date for “closing” similar to closing on a new house. Think of this process in the same way. We have a signed contract but we are awaiting a “closing” date, which comes at the conclusion of the public review process. We expect “closing” to be towards the end of the calendar year. Once we go to closing, Nanticoke and Peninsula become one healthcare organization, coming under one corporate umbrella reporting to one CEO.
What will the new organization look like? The affiliation is legally called a Membership Substitution. We are both Not-for-Profit businesses so there is no real cash exchanged. Simply put, at closing, Nanticoke Health Services, our current corporate entity, goes away and is substituted by Peninsula Regional Health System (PRHS). PRHS will be the corporate umbrella under which all Nanticoke’s entities, including the hospital and the physician network, will fall. In 2020, there are plans to re-launch the health system brand. Nanticoke Memorial Hospital and Peninsula Regional Medical Center, the hospitals themselves, will keep their names. The two physician networks will become one and also get a new brand that mirrors the new Health System name.
Will we still see familiar faces in Nanticoke’s leadership? After closing, Peninsula Regional’s CEO, Steve Leonard, will become the CEO over all of Peninsula and Nanticoke entities. Steve Rose has announced he will retire sometime after closing. Penny Short is expected to become the new President of Nanticoke Memorial Hospital.
Will the Nanticoke Governance structure change? The new Health System will have a Board of Directors and dedicated committees. The DA commits to maintaining local board of directors at both Nanticoke and Peninsula.
Will there be staffing changes? While Nanticoke made a few recent changes due to budget, Peninsula has no immediate plans to make big changes. The new Health System will begin to look at ways to enhance services already provided by both Nanticoke and Peninsula. This was true when the letter of intent was signed and remains true today with the signing of the definitive agreement. Regardless of the affiliation, an organization must manage their finances appropriately for their long-term viability. Eventually, the new Health System will incorporate two hospitals, a freestanding medical facility, a physician enterprise and a host of other health-related sites/businesses. In total, there will be nearly 5,000 employees; which affords multiple employment opportunities across the health system.
What will happen with Nanticoke’s current partnerships and contracts? This is another one of those areas that will be worked out in more detail over the next year. Keep in mind Nanticoke (and PRMC) have many contracts and it will take time for the Health System to work through these once the change-over occurs. Penny Short and Tom Brown are Nanticoke’s appointment to the Executive committee overseeing the integration. Again, it will take some time to get through this level of details. As with other areas, current partnerships and contracts will be evaluated at Nanticoke and Peninsula and at the appropriate time, changes may be made. Nanticoke and Peninsula will continue to support our communities including local businesses, where we can.
Peninsula Regional uses Epic. Nanticoke uses Cerner. Will we go to one system? Yes, it would be expected that eventually both organizations will be on one EMR system. When and how this will occur is going to be a part of a long term planning process. It is good to keep in mind that, three or four years from now when this happens, there will still be a need across the Health System for information technology staff and technical support. For those working for the Cerner team, we will still need you. You should expect there to be opportunities for the I.T. staff from Nanticoke (Cerner) to remain with the health system if they choose.
How do you plan to grow services for Nanticoke? There are many areas in which we believe we can work together to provide better care in Sussex County. While much of this is to be evaluated during the integration process, we are already looking at how to improve services at Peninsula’s Millsboro location. We will also evaluate cardiology, orthopedic and other service lines to see where we can make improvements; working toward a stronger system of care by leveraging what both organizations have to offer. There is also a great deal of opportunity to grow our population health programs to better manage patients through the system of care
What happens next? We anticipate the Delaware public review process will conclude by the end of September which leads to the final “closing” around the end of the calendar year. This timeline can change. After closing, a new Health System will be formed, but it is imperative that exceptional care continues to be delivered with supportive operations.
What is integration planning? What is happening now? With the signing of the definitive agreement, we have officially kicked off the integration planning process. Teams from all areas across both organizations have been set up and have begun to work together looking at how to move forward to become one system. These teams are drawing upon strengths from both organizations to develop a plan for the future.