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Cape Regional Medical Center in Cape May Court House.
Joanne Carrocino , President and CEO of Cape Regional Medical , talks about the construction of a new Ambulatory Surgery Center that is coming in 2020. Aug. 22, 2019 (Craig Matthews / Staff Photographer)
CAPE MAY COURT HOUSE — Leaders of Cape Regional Health System, which operates Cape May County’s only hospital, have decided to merge with Cooper University Health Care, citing a need for partnership amid a struggle to remain independent.
Cooper and Cape Regional have signed a letter of intent for the merger, according to a statement from Cooper.
Both are working toward a definitive agreement in March, Cooper said in an announcement Wednesday.
The merger still has to be approved by health care regulators. The approval process could take until 2024, Cooper said.
Cape Regional spokesperson Sue Staeger could not be reached for comment Wednesday afternoon.
The Cape May County-based company operates Cape Regional Medical Center, three urgent care facilities and employs more than 60 primary care physicians through Cape Regional Physicians Associates.
County Commissioner Director Gerald Thornton on Wednesday welcomed the news as reassurance that the company is doing what’s best to continue providing health care to area patients.
“Cooper University Health Care is a great name in health care for our region,” Thornton said in a statement. “I have appreciated the long-standing working relationship that Cape Regional President Joanne Carrocino and their entire Board of Trustees have had with Cape May County Government during my time in office.”
Cooper is widely known for managing Cooper University Medical Center in Camden, which has South Jersey’s only level-one trauma hospital.
Garry Gilbert, chairman of Cape Regional Health System’s Board of Trustees, said partnering with Cooper is the best decision for public interest.
“As it becomes more and more challenging for smaller health systems to operate independently, merging with Cooper made the most sense as we share the same commitment to the communities we serve and to providing the highest quality care to our patients,” Gilbert said.
Should the proposal be approved, the new health system, which is projected to make an annual $2.2 billion in revenue, will operate two hospitals with more than 900 licensed beds, more than 900 employed physicians in three practicing groups, 130 ambulatory locations in eight counties and six urgent care centers, Cooper said.
“For more than 135 years, Cooper has continued to expand its reach to provide advanced health care to the people of South Jersey,” said George E. Norcross, III, chairman of Cooper University Health Care’s Board of Trustees, in a statement. “This merger of two trusted health care organizations will benefit tens of thousands of residents and visitors to Cape May County and strengthen the overall health care system in South Jersey.”
Cape Regional Health System is one of Cape May County’s largest employers. It operates multiple facilities in the county, including the Thomas and Claire Brodesser Jr. Cancer Center, the Claire C. Brodesser Surgery Center and Jane Osbourne Center. All three facilities are located in Cape May Court House.
The merger announcement comes four months after Cape Regional said it was ending its maternity/obstetric care unit, citing a lack of obstetrical physician coverage. It said after the announcement it was working with Shore Medical Center in Somers Point and AtlantiCare, which operates two hospitals in Atlantic County, on a plan to provide those services to Cape May County residents needing them.
Cape Regional Medical Center first opened in 1950 as Burdette Tomlin Memorial Hospital, after a local businessman who provided $25,000 toward construction expenses. It’s been known by its current name since 2006, a change associated with improvements made under its University of Pennsylvania Health System affiliation.
The proposal mirrors health care trends across the country, said Ge Bai, a professor of accounting and health policy at Johns Hopkins University.
Health care companies announced 115 transactions in 2017, the highest amount in recent history, according to RevCycleIntelligence, an online publication through the Xtelligent Healthcare Media network.
Overall transaction values of mergers around the country grew by 146% between 2016 and 2017, reaching $175.2 billion, RevCycleIntelligence said, referring to a PricewaterhouseCoopers report.
Bai says health care company mergers and takeovers are universal, noting trends display financial strains related to the COVID-19 pandemic. She said companies in densely populated areas are typically bigger and more powerful than their rural counterparts, giving them financial leverage.
“It’s really when a crisis hits that you can see the difference,” Bai said of the economic crunch caused by the pandemic. “The crisis exposed a lot of smaller ones’ (companies) financial vulnerability and strengthened the financial footing of bigger ones.”
Contact Eric Conklin:
609-272-7261
econklin@pressofac.com
Twitter @ACPressConklin
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Cape Regional Medical Center in Cape May Court House.
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