NHRMC and Carolinas HealthCare System Launch Services Agreement

July 08, 2014

WILMINGTON – New Hanover Regional Medical Center and Carolinas HealthCare System, the two largest public hospital systems in North Carolina, have agreed on a Services Agreement designed to continue to improve patient quality and reduce costs for both organizations. The NHRMC Board of Trustees has approved the agreement, which is effective July 8, 2014.

The new agreement will allow the organizations to collaborate on enhancing patient care while preserving NHRMC’s local governance and ownership.

Carolinas HealthCare System will become a strategic resource acting in a consultative role by providing expertise on administrative and clinical best practices, including clinical integration, new program development and quality improvement. CHS will also assist on cost reduction, to include participation in its group purchasing.

This arrangement, largely based on consulting services, will save NHRMC millions of dollars and allow the hospital to more nimbly respond to a rapidly changing health care environment, and also improve the organization by helping it solve common issues and challenges most hospitals face.

“We are delighted to enter into this arrangement with one of the strongest public hospital systems in the United States,” said Jack Barto, President and CEO of New Hanover Regional Medical Center. “One of the challenges of being an independent hospital today is developing the depth of resources to keep up with the rapid changes in the health care environment. This agreement will allow us access to resources we need to keep our organization moving forward and continuing to deliver quality patient care.”

The agreement is in the context of continued changes in market conditions and pressures on healthcare providers, including reduced funding from the federal and state governments. NHRMC announced in April that it is seeking to improve its operations by $80 million over the next four years, but intends to do so through improved operational practices – and not by job reductions.

The initial contract will last three years, with the opportunity for two one-year renewals. All benefits will extend to Pender Memorial Hospital, the 86-bed community hospital in Burgaw that NHRMC manages. The list of benefits includes:

  • Immediate access to CHS experts on clinical, technological and other management areas, which means NHRMC will be able to reduce its own consulting costs
  • Savings generated from the group purchasing ability of the two organizations
  • Sharing clinical best practices that improve patient outcomes and standardize processes, which benefit patients and reduce cost
  • Benefits that flow both ways. NHRMC is among industry leaders in several quality care areas and its protocols may benefit any of CHS’s 32 hospitals it owns or manages
  • Invaluable opportunities to brainstorm with hospitals within the CHS system that are roughly the size of NHRMC and are dealing with the same issues
  • Clinical opportunities with any number of CHS services that are nationally acclaimed. The first already in progress is NHRMC Rehabilitation Hospital and Outpatient Services working with Carolinas Rehabilitation Network, one of the nation’s largest non-profit rehabilitation providers that includes an academic training center and a brain injury fellowship
  • Ability to participate in clinical research trials now affiliated with CHS, expanding access for patients in Southeastern North Carolina to the latest emerging treatments in quality care
  • This agreement is not a management contract and in no way alters NHRMC’s status as a standalone, county-owned public hospital. It represents no change in county ownership, board governance, or employment status. It maintains all current relationships with physicians. The two hospital systems will not share contracting with managed care insurance companies, and the pricing structure at each will remain independent.

    This agreement is not related to the management contract that was proposed with CHS four years ago. It has no impact on NHRMC’s current contract with Carolinas HealthCare System Medical Group to manage its physician network and has no impact on current jobs at the medical center.

    “Carolinas HealthCare System and New Hanover Regional have developed a strong relationship over the years and we are excited to enter this new and unique collaborative relationship,” said Joe Piemont, Carolinas HealthCare System President. “Our organizations share similar missions and complimentary visions, deepened by our commitment to provide the highest quality health care. The benefits of our agreement will be driven by common overriding goals to put the patient first always and enhance the overall value for our patients.”

    The agreement does not mandate that NHRMC subscribe to any particular service offered by CHS, but does provide the potential to do so, to be used at NHRMC’s direction.


    About New Hanover Regional Medical Center

    With a dedicated team of more than 6,000 employees, 550 physicians and 800 volunteers, New Hanover Regional Medical Center is one of the largest county-owned public hospitals in the United States. A multi-campus healthcare system, NHRMC includes the main 17th Street campus where the NHRMC Betty H. Cameron Women’s & Children’s Hospital, NHRMC Zimmer Cancer Center, NHRMC Behavioral Health Hospital and NHRMC Rehabilitation Hospital are located. New Hanover Regional Medical Center also includes the NHRMC Orthopedic Hospital on Wrightsville Avenue and the management of Pender Memorial Hospital in Burgaw. With a team-based approach to health care, NHRMC offers a variety of healthcare services, technologies and treatments for patients of all ages. NHRMC provides more than $140 million in charity care each year.

    About Carolinas HealthCare System

    Carolinas HealthCare System, one of the nation’s leading and most innovative healthcare organizations, provides a full spectrum of healthcare and wellness programs throughout North and South Carolina. Its diverse network of care locations includes academic medical centers, hospitals, freestanding emergency departments, physician practices, surgical and rehabilitation centers, home health agencies, nursing homes and behavioral health centers, as well as hospice and palliative care services. Carolinas HealthCare System works to enhance the overall health and wellbeing of its communities through high quality patient care, education and research programs, and numerous collaborative partnerships and initiatives.