New Hanover Regional Medical Center considers management agreement
with Carolinas Healthcare System
When people or organizations forge relationships, they do so most often because they share a set of values and a common goal. The proposed management agreement between New Hanover Regional Medial Center and Carolinas HealthCare System is just such an arrangement. If approved, the affiliation would harness the respective strengths of both organizations while allowing New Hanover Regional Medical Center to maintain its local governance and ownership and long-standing ties to the community.
"Delivering care at the highest possible level to our community is our paramount, overriding mission," said Jack Barto, NHRMC President and CEO. "It drives our planning and thinking in everything we do. The agreement with CHS would open doors and create opportunities to fulfill that mission in ways that offer tremendous advantages - in research, technology, best practices expertise, and a collective effort to manage cost factors have become the biggest challenge on the horizon."
Comprised of 33 hospitals, 1,500 physicians and 48,000 employees, Carolinas HealthCare System is the nation's second largest public not-for-profit healthcare system. Like NHRMC, Carolinas HealthCare System hospitals are committed to the duty to provide care to everyone, regardless of ability to pay. Under the proposed agreement, NHRMC will retain its "public" status, governed by a local board of trustees (as it is now) and committed to being the community's healthcare safety net.
"The proposed management agreement between NHRMC and CHS is a great and timely opportunity to further advance the quality of and access to healthcare for all in New Hanover County and beyond. The proposed agreement, while creating still more opportunities to optimize patient care through access to new quality measures and initiatives, positions us perfectly for what are sure to be challenging times in healthcare in years to come."
George V. Huffmon III, MD
NHRMC Chief of Medical Staff
The benefits of economies of scale, which equal lower costs, which equal the long-term health of our healthcare
Healthcare reform legislation and other factors have made controlling costs the most serious challenge any hospital faces. If approved, the affiliation with the nation's second largest public not-for-profit healthcare system would provide NHRMC with the economies of scale and negotiating power to manage and effectively reduce costs for supplies, technology, and a host of other operating expenses, plus the benefits of quality and clinical best practices. Preparing for fiscal realities on the horizon today lays the groundwork for a viable financial future tomorrow.
"Bottom line, the combination of keeping local ownership and governance with the enhancements in care and cost control is the best of both worlds," explained NHRMC Board of Trustees Chairman, David Sims. "This is good for our patients and community. We can't know exactly what is going to happen with healthcare reform, but we can proactively position our hospital to be strong no matter what the future brings."
"Thousands of hours have been spent by numerous parties to ensure the proposed agreement between NHRMC and CHS is one that puts patient care first. This is a priority that should remain front and center - now and in the future. The community should applaud the efforts and creativity of our hospital leadership in securing a future full of the very best medical care for all those in need."
Neill H. Musselwhite, MD, FAAFP
Immediate Past Chief of Medical Staff
Local ownership, local governance - it all stays here in our community
NHRMC’s governance through a local board of trustees, appointed by the New Hanover County Commissioners, is an oversight model that has served the community and region well. The proposed agreement safeguards the key elements of that model: local ownership and local governance of a public, not-for-profit hospital.
|| The management agreement between NHRMC and Carolinas HealthCare System
Maintain local ownership and governance
Keep the current management team in place
CHS will employ four NHRMC leaders, but NHRMC Board of Trustees controls compensation, evaluation and employment
Retain New Hanover County ownership
Keep NHRMC as a not-for-profit, publicly owned hospital
Fully integrate a management relationship
Provide access to the expertise, economies of scale and quality best practices available through CHS
Keep all service decisions local
Keep NHRMC separate from CHS financial liabilities
Protect and preserve local jobs
Sell, merge or privatize the hospital
Replace the current NHRMC Board of Trustees' governance or eliminate its authority
Affect in any way the New Hanover County Commissioners' authority to control NHRMC Board of Trustee appointments
Change the management team's accountability to the NHRMC Board of Trustees
Eliminate any local jobs or affect employee benefits
Involve sending patients to Charlotte or bringing in Charlotte physicians
Represent a new or untested concept; CHS has employed it successfully for more than ten years
Change the fact that NHRMC receives no financial support from local tax dollars
Questions & Answers
Q: What is New Hanover Regional Medical Center’s proposed management agreement with Carolinas HealthCare System?
A: It is an agreement that allows New Hanover Regional Medical Center and Carolinas HealthCare System (CHS) to work together to enhance the health of the people we serve by collaborating on clinical quality, acquisition of new technology, medical research and education, business management, strategic planning and operational efficiencies.
Q: Why is New Hanover Regional Medical Center considering an agreement with Carolinas HealthCare System?
A: High quality patient care is paramount and our number one priority. Through this management agreement New Hanover Regional Medical Center and Carolinas HealthCare System will share best practices and expand resources to help support our collective missions during a period of profound change in healthcare delivery.
Q: Is NHRMC considering the management agreement with Carolinas HealthCare System out of financial necessity?
A: No. To the contrary, NHRMC’s strong financial performance makes this an ideal time to proactively seek opportunities to enhance healthcare services for our region.
Q: Would the agreement with Carolinas HealthCare System be a merger or privatization?
A: No. The new arrangement is called a management agreement. It is not a sale, merger, lease or privatization. Local governance and ownership will continue as it is now.
Q: Would the agreement result in job cuts or layoffs?
A: No job cuts or layoffs are expected as a result of this proposed agreement. In fact, it will help protect the talented workforce we need to continue to offer exceptional healthcare.
Q: Currently NHRMC does not receive financial support from local tax revenues. Would this change under the agreement?
A: No, that would not change. NHRMC would continue to be self-sustaining, delivering high quality care while staying fully committed to our role as the safety net for the people of this region.
Q: What are the specific services and benefits that will accrue to NHRMC and the region it serves as a result of this agreement?
A: Benefits include clinical enhancements and operational improvements available through the sharing of best practices with all 33 hospitals currently affiliated with Carolinas HealthCare System. Other benefits will occur by virtue of the economies of scale attainable within a larger system. Additional benefits include collaboration opportunities in the areas of medical education and research.
Q: Would the management agreement with Carolinas HealthCare System result in any NHRMC services being discontinued?
A: No. The current structure of our ownership and governance through our local board of trustees will remain unchanged. No services would be discontinued. In fact, services would be further strengthened.
Q: How would this affiliation affect my doctor(s)?
A: The structure of our medical staff would not change. We are fortunate to have so many highly skilled physicians. Those same physicians will continue to be actively involved in a wide variety of quality improvement efforts that will enhance the level of care available to patients.
Q: Does this mean some patients will be sent to Charlotte for care?
A: There is no requirement or expectations for patients to be referred outside of the NHRMC system. These decisions are always made on what is best for the patient.
Q: What is the proposed management agreement that New Hanover Regional Medical Center is considering with Carolinas HealthCare System?
A: It is an agreement that would allow New Hanover Regional Medical Center and Carolinas HealthCare System (CHS) to work together to enhance the health of the people we serve by collaborating on clinical quality, acquisition of new technology, medical research and education, business management, strategic planning and operational efficiencies.
Q: Is the agreement with Carolinas HealthCare System a merger or privatization?
A: No. The new arrangement is called a management agreement. It is not a sale, lease, merger or privatization. Local governance and ownership will continue as it is now.
Q: Will the affiliation result in job cuts or layoffs? Will employee benefits be affected?
A: No. There will be no job cuts or layoffs as a result of this agreement. In fact, it would help protect the talented workforce we need to continue to provide exceptional healthcare. NHRMC offers its employees comprehensive benefits. These strong benefits will continue.
Q: Will this affiliation include Betty H. Cameron Women's & Children's Hospital, Rehabilitation Hospital, Cape Fear Hospital and the Behavioral Health Hospital?
A: Yes. All these entities will be able to take advantage of the benefits that this agreement will bring to NHRMC.
Q: How will this affiliation affect my doctor(s)?
A: The structure of our medical staff would not change. In fact, physicians will continue to be actively involved in a wide variety of quality improvement efforts that will enhance the level of care available to patients.
Q: Is this agreement a direct result of healthcare reform and changes that are occurring?
A: Healthcare reform will bring many changes, including significant reductions in reimbursement. While NHRMC is financially strong, the strength of collaboration will help yield additional effects on cost containment to help offset the significant reductions expected.
Q: What role will the NHRMC Board of Trustees play in the governance of the hospital's business and operations strategy?
A: The board will continue to function in the same capacity as it does now. Ownership and governance stays local. The CEO and Board of Trustees will continue to have oversight, just as they do now.
Q: How will this prepare New Hanover Regional Medical Center for the changes in healthcare reform that are already happening, or are imminent?
A: By sharing best practices, our patients will benefit from the highest standards of patient care and the resources that come through collaboration and economies of scale; for example, lower supply costs, lower costs of capital and better opportunities for investments in strategic capital and technology.
Q: Will this agreement have any impact on local tax revenue?
A: No. NHRMC is self-sustaining and does not receive any direct financial support from local government entities. NHRMC will continue to offer high-quality care while also fulfilling the promise of being the safety net for the people of this region.