Cooper Health and Cape Regional plan to merge
The deal comes as hospital systems are facing increasing financial stress amid high inflation and long-term trends moving more care out of hospitals, though Cooper has been growing stronger.
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Cooper University Health Care and Cape Regional Health System, which is anchored by 242-bed Cape Regional Medical Center in Cape May Court House, said Wednesday that the two nonprofits had signed a preliminary merger agreement.
Cooper, based in Camden, with $1.8 billion in revenue, is far larger than Cape Regional, with $177 million in revenue. Both figures are for 2021. Both systems were profitable last year.
“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,” Garry Gilbert, Cape Regional’s board chairman, said in a news release.
Neither Cooper nor Cape Regional made executives available for interviews on the tentative agreement. The next step is a definitive agreement, which could be reached in March. If that happens, the regulatory approval process is likely to take until early 2024, they said.
Cooper already provides some services at Cape Regional, including doctors for its intensive care unit and telehealth services for stroke victims, according to Joanne Carrocino, Cape Regional’s CEO.
Cape Regional is also affiliated with the University of Pennsylvania Health System for numerous clinical programs, including radiation oncology, interventional cardiology, orthopedics, and pulmonary medicine. It’s likely that Cooper would substitute its services, including cancer treatment through the MD Anderson Cancer Center at Cooper, for those now offered by Penn.
In Cooper’s back yard, Penn has a strong affiliation with Virtua Health.
A spokesperson for Cape Regional said she had no comment beyond the news release.
The combined systems would have two hospitals with close to 900 beds and employ more than 10,000 people.
If the Cape Regional deal is completed, it would add to Cooper’s strong pace of expansion. In September, Cooper announced a $2 billion expansion of its Camden campus. At Moorestown Mall, Cooper is turning a former Sears store into a three-floor outpatient center.
The efforts won praise last month from Standard & Poor’s Global Ratings, which last month raised Cooper’s credit rating by a notch, to “A-” from “BBB+.”
“Management continues to focus on expanding Cooper’s market position in the very competitive southern New Jersey service area through strategic partnerships, targeted physician recruitments, and building out the organization’s ambulatory footprint,” S&P said.