PRMC and Bayhealth join forces to drive innovation

Two large hospital and health care systems, Peninsula Regional Health System and Bayhealth, will share expertise, training and tech infrastructure, the CEOs of both organizations said Tuesday in announcing an alliance between them.

The company heads, Peggy Naleppa of Peninsula Regional and Terry M. Murphy of Bayhealth, said the partnership was prompted by a desire to collaborate on learning the best-known treatments for disease, as well as the hope of reducing costs — by using the buying power of both hospital networks combined to get better prices on equipment and supplies, for example.

They said the linking of Salisbury-based Peninsula Regional and Bayhealth, which has full-service hospitals in Dover and Milford, would not mean any immediate job cutbacks or changes to the way each company is governed by its respective board of directors.

"This is not a financial purchase of one system by the other," Murphy said at a news conference at which both he and Naleppa shared a dais. "It is not a consolidation of our workforces. ... We can now share the ideas and innovations of both systems and work even closer with physicians and other health care providers in our communities."

The two corporations cover different territories in the same general region. Bayhealth touches patients throughout Delaware — it recently opened an emergency ward as far north as Smyrna — but it is focused on Kent County and northern Sussex. Peninsula Regional owns Peninsula Regional Medical Center in Salisbury, the Maryland Eastern Shore's main trauma center, and it also serves people in southern Sussex County and some parts of Virginia's Eastern Shore.

Other hospital systems — Nanticoke in Seaford, Beebe Healthcare in Lewes — operate in the middle ground between them.

"We're not in each other's backyard, if you will," Naleppa said. "It's not about a turf issue for us."

As a nuts-and-bolts matter, Naleppa said both companies are investing equally in a Delaware-based corporation, HealthPartners Delmarva, that will handle administrative and consulting work to make the partnership happen. Each organization's board of directors has approved the shared effort, Naleppa and Murphy said.

Bayhealth is the larger organization of the two, but only slightly; it has 3,200 employees and 466 physicians on its staff. Peninsula Regional has nearly 3,000 employees and almost 300 physicians.

Murphy said it's too soon to say whether the partnership will lead to more, or fewer, people employed in each company. A reduction in "administrative costs" is one goal of the partnership, he said, but he also envisioned adding more medical coding staff as a possibility.

"It's a little bit too early to tell. We haven't released our work teams to look at it," Murphy said. "There are no plans, any plans, as it relates to workforce reductions as part of our discussions."