A recent OpEd raised some questions about the proposed partnership between New Hanover Regional Medical Center, Novant Health, UNC Health and UNC School of Medicine.
The questions focused on logistics, governance, and the use of proceeds from the sale. They did not question whether the agreement is in the best interests of the region’s healthcare.
The benefit for the community’s health and well-being is increasingly clear as evidenced by the unanimous support of the citizen-led Partnership Advisory Group and 72% of residents surveyed, who said they believed it would have a positive impact on the community.
Still, we want to help clear up some misunderstandings by answering the questions raised directly.
1. Is it true that local taxpayers are giving Novant Health $200 million?
No. New Hanover County will receive $1.5 billion from Novant Health for the sale of New Hanover Regional Medical Center as well as an estimated $400 million from the transfer of NHRMC’s cash reserves to the County. The majority of New Hanover County Commissioners support setting aside a portion of NHRMC’s reserves for a NHRMC employee and provider retention and resiliency fund. This is not part of Novant Health’s purchase price or tax dollars. It is money coming from NHRMC’s operating income.
2. Why is NHRMC negotiating a sale of county assets?
Negotiations are being led by legal representatives for both New Hanover County and NHRMC. New Hanover County and NHRMC jointly selected legal representatives with specific experience in this type of transaction to manage the process of negotiating an agreement with Novant Health. The County also has individual representation to ensure the interests of local taxpayers are protected.
3. When will the proposed UNC partnership begin?
NHRMC currently has a partnership with UNC School of Medicine and UNC Health that will continue and be expanded through the proposed partnership with Novant Health. The Asset Purchase Agreement details the UNC School of Medicine’s commitments to expanding the size of its medical residency program at NHRMC, with specific numbers for each year up to 2026.
4. Will Novant Health have undue influence on the community foundation board?
No. Nominations for both the hospital board and the community foundation board will be made at the local level to represent local people. Setting up the hospital board to appoint six of the eleven community foundation board members, with the other five appointments coming from New Hanover County Commissioners, is simply a way to ensure the foundation funds can be invested in a way that will bring in up to $30 million more in annual investment income. That’s money that can be spent every single year to benefit local citizens and taxpayers.
5. Will New Hanover County truly be able to maintain local control?
Novant Health is committed to maintaining local governance and decision making. This commitment includes retaining NHRMC team members and physician contracts, preserving NHRMC’s separate corporate existence and providing the community with significant influence through a true fiduciary board responsible for, among other things, determining the best use of resources for the region. In addition, NHRMC will have two seats on the Novant Health parent company board.
6. Is it true that the NHRMC strategic plan is not public?
Both NHRMC’s strategic and master facility plans have been shared at a high level through presentations to the Partnership Advisory Group, which are publicly available on www.nhrmcfuture.org. The presentations include NHRMC’s intentions to grow services in the region, invest in achieving health equity, and improve the value of care by raising quality and lowering costs. Due to the competitive nature of the healthcare industry, specific details are necessarily protected.
7. Why is local control not an option?
The agreement preserves local control while providing what’s needed to serve the region and protect local taxpayers from financial obligations. The Partnership Advisory Group evaluated options for local ownership and found they would hold NHRMC back from achieving all that could be done for area residents. The agreement with Novant Health provides funding and security and maintains local control for the decisions most important to local residents, including those around the services offered, staffing, community engagement and provider relationships.
8. What if Novant Health changes hands?
Few things can be guaranteed indefinitely, including NHRMC’s ability to fulfill its mission as a standalone county-owned hospital. Novant Health was chosen by the Partnership Advisory Group, and then approved by the NHRMC Board of Trustees and a majority of the County Commissioners, because it is a strong not-for-profit system that shares our commitment to the local communities we serve. As a substantial part of the Novant Health system, NHRMC would have a role to play in shaping organizational strategy and determining how local needs can be best served. If Novant Health were to be sold, its commitments to NHRMC and New Hanover County would still be honored, transferring over to the
new owner.
9. Would Medicaid expansion change everything?
While health systems support Medicaid expansion, we know that no healthcare organization can rely on changes in policy that could hurt or help their ability to provide care and remain financially sustainable. An expansion of Medicaid could provide some relief, but cuts to other funding and reimbursement could erase those gains. The partnership will create a more stable path forward.
10. Is this the right time to partner?
We recognize that now, more than ever, healthcare organizations must do all they can to ensure stability, encourage innovation and expand access to the care, providers and resources communities need to get and stay well. This partnership enables us to do all these things – and so much more. Uncertainties like COVID-19 have further revealed the need for a solid foundation of financial support to get through challenges without negatively impacting NHRMC’s ability to deliver care.