A new collaborative relationship will keep New Hanover Regional Medical Center on a course of enhancing health care services and reducing costs, hospital officials announced Tuesday.
 
NHRMC and Carolinas HealthCare System have forged a services agreement “designed to continue to improve patient quality and reduce costs for both organizations,” according to a news release from NHRMC. The agreement took effect Tuesday.   
 
Carolinas HealthCare System (CHS), based in Charlotte, operates a network of more than 900 diverse care locations in North and South Carolina. It will play a consulting role to NHRMC by “providing expertise on administrative and clinical best practices, including clinical integration, new program development and quality improvement,” according to the release, which added that CHS will also assist on issues of cost reduction, which may include collaborating with NHRMC in group purchasing.

Hospital officials said in their announcement that the agreement was not a management contract and did not affect "NHRMC's status as a standalone, county-owned public hospital."

"It represents no change in county ownership, board governance or employment status," the release stated. "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, according to the release, is not related to the management contract CHS proposed four years ago. That deal faltered when New Hanover County commissioners voted against it.

The current services agreement also does not affect an existing contract between the hospital and Carolinas HealthCare System Medical Group to manage NHRMC's physician network, officials said Tuesday.
 
“This is pretty exciting for people we care for in this region,” NHRMC spokeswoman Martha Harlan said of the new agreement. “Our CEO, Jack Barto, is a real visionary. He put in place this agreement that’s going to allow people to collaborate and talk with one another about things like best practices, technology and clinical applications.
 
“Think about the ability of occupational therapists and speech therapists at our Rehabilitation Hospital to talk with their counterparts at other rehab facilities that are part of the [CHS] system on ways to apply new technology or save money. This agreement will allow us to bring the best of the best back to our patients,” said Harlan (shown left).
 
Another key aspect of the services agreement is the potential it brings for lowering costs, Harlan said, alluding to an announcement in April by the medical center that it will seek to save $80 million in operations costs over the next four years. The need to do so results from a variety of changing marketing conditions and financial pressures, including reduced funding from the federal government and the state.
 
Harlan said that NHRMC, with its multiple campuses, 6,000 employees and 550 physicians, already operates in a very lean and efficient manner, and can share its continuous improvement expertise with its new partner.
 
“I think Carolinas are going to learn a lot from us on lean processes and continual improvement in every shape, from physicians’ bedside matter to use of ever-changing technology,” she said. “We have to be vigilant and have to be proactive. We’re all really excited about it. “
 
The service agreement also increases NHRMC’s purchasing clout, Harlan said.
 
“We have to reduce costs . . . as does every hospital across the nation,” she said. “Now, we’re negotiating on behalf of a much larger base. If we’re buying a piece of equipment that costs a million dollars, we have greater buying power if we can negotiate for two of them. And we’re looking at group purchasing. Can we reduce unit pricing for supplies?
 
“The cool thing is, we stay independent. We’re still nonprofit; we’re still owned by the county. It’s the best of both worlds.”
 
Developing a depth of resources necessary to respond to rapid changes in the health care industry is one of the challenges today for independent hospitals, Barto (shown right) said in the release.

"This agreement will allow us access to resources we need to keep our organization moving forward and continuing to deliver quality patient care," he said.
 
The initial contract will last three years, with the opportunity for two one-year renewals, the news release stated. All benefits will extend to Pender Memorial Hospital, the 86-bed community hospital in Burgaw that NHRMC manages.
 
“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,”  Carolinas HealthCare System president Joe Piemont said in the release. “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.”