Delaware, Maryland systems partner on population health management

Bayhealth, Dover, Del., and Peninsula Regional Medical Center, Salisbury, Md., have agreed to create a loose partnership—yet another sign of regional hospitals searching for ways to gain economies of scale and work together on managing population health while remaining nominally independent.

Together, the new collaboration will be called HealthPartners Delmarva, named after the Delmarva Peninsula, where both providers are located. The headquarters of Bayhealth and Peninsula Regional Medical Center are about 55 miles apart.

Officials stressed that the deal is neither a merger nor an acquisition. Rather, the two systems will focus on population health management and finding ways to put patients in the “most affordable” care setting.

“Creating the best experience for our patients will mean identifying and adopting best practices that focus on convenience, safety, time and cost efficiency,” Bayhealth CEO Terry Murphy said in a statement. “By bringing together the experience, innovation and patient-centered values of our two health systems, we can be even more prepared for the new realities of healthcare.”

Affiliations in varying degrees, or those that stop short of a full combination, have proliferated among smaller providers. Most recently, four critical-access hospitals in New Hampshire signed a nonbinding letter of intent to collaborate on care coordination through a new parent organization. In June, five Missouri hospitals and health systems created a population-health alliance called Health Network of Missouri.

In fiscal 2013, two-campus Bayhealth posted an operating surplus of $28 million with $476 million in revenue. The 406-bed Peninsula Regional Medical Center lost $3 million on $366 million in revenue in 2013.

Follow Bob Herman on Twitter: @MHbherman