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Novant Health Partners Up With UNC In NHRMC Talks

By Vicky Janowski, posted May 21, 2020
Update: This version has been updated with additional comments from Novant Health President and CEO Carl Armato.

Novant Health sweetened its deal for New Hanover Regional Medical Center on Thursday, adding a pledge from UNC to continue its ties with the Wilmington health system.
 
Winston-Salem-based Novant Health announced Thursday that it has signed a letter of intent with UNC Health and UNC School of Medicine “to enhance medical education and clinical services” at NHRMC if Novant is chosen to partner with or buy the local hospital.
 
Novant Health is one of three health systems being looked at closely for a potential deal with the hospital. It offered up to $2 billion to the county if it is able to buy the county-owned hospital and up to $3.1 billion to fund NHRMC's strategic plan for capital projects in the years ahead. It has also said that it is open to other arrangements short of a sale, such as a joint venture or other affiliation agreement.

The other two systems in continued talks are Charlotte-based Atrium Health and Durham-based Duke Health. All three systems, which were among six organizations that submitted proposals for NHRMC, have supplied info about their approach to medical education.

Atrium and Duke did not immediately respond for comment as of Thursday afternoon.
 
The Partnership Advisory Group has not officially counted out the other three systems that submitted proposals, which included UNC Health, but it is now in due diligence discussions and site visits with Novant, Atrium and Duke after hospital trustees and county commissioners voted on those for closer looks. The PAG, which meets Thursday afternoon, also is weighing those proposals against leaving things as is as well as internally restructuring the hospital to address some of the limitations officials say come with the existing model as a county-owned facility.
 
A month ago, UNC Health said that if NHRMC partnered with another health system it would end its existing presence here.
 
“We believe strongly in the benefits of UNC Health and UNC School of Medicine being integrated as partners operationally and academically. If you choose to embark with another partner, UNC Health and UNC School of Medicine will not be able to continue our current educational and clinical presence in Wilmington,” Wesley Burks, CEO of UNC Health and dean of UNC School of Medicine, wrote in a letter to the PAG asking about the scenario.
 
The letter of intent with Novant means that might not necessarily be the case.

"You look at all that New Hanover Regional Medical Center has done over the years with UNC Health and UNC School of Medicine -- there's been a deep commitment to medical education and clinical services at New Hanover Regional Medical Center, and we just thought that if we were selected by the county commissioners and that community we wanted to ensure that we could continue to enhance medical education and those same clinical services at New Hanover Regional Medical Center," Novant Health President and CEO Carl Armato said Thursday afternoon.

"I'm just pleased to announce," he added, "that we were able to have conversations with UNC Health and UNC School of Medicine that would allow medical education not only that currently exists there but other services that the community might need and want to continue and to enhance that."

NHRMC has had a partnership with UNC for nearly 40 years. The hospital works with UNC on NHRMC’s graduate medical education program, in which doctors just out of medical school see area patients in several specialties. NHRMC also is the site of a UNC School of Medicine branch campus, which currently has 12 third-year medical students and six fourth-year medical students, according to Joseph Pino, NHRMC’s vice president of graduate medical education and associate dean and campus director of UNC School of Medicine’s Wilmington Campus.

“Over the last couple years we’ve had the opportunity to recruit them into our residency program,” Pino said about the UNC medical students.
 
“So essentially what I’m describing is a pipeline,” he added during a presentation Monday to New Hanover County commissioners, who along with NHRMC hospital trustees, have the ultimate say in whether any deal for the hospital is forged or not.
 
Pino, who also serves as the PAG’s co-vice chair, pointed out that the other two interested health systems also have addressed graduate medical education.
 
“The truth is that Duke offers the same kind of GME [graduate medical education] and undergraduate medical education that UNC could all, and they’ve said very clearly that they would put forth that same effort. Whereas Atrium at this point has been in dialogue with Wake Forest School of Medicine. The deal has not been fully approved by the state of North Carolina.”

In its initially submitted proposal, UNC Health was the only system that did not make a pitch for a lease or acquisition of NHRMC. Instead it offered to expand its existing academic and clinical partnership.

"The offering that UNC Health and UNC School of Medicine had on the table, we hope to utilize all of what they were going to offer in connection with the Novant Health offering,"  Armato said. "Combined with our ambulatory and community health strategy, together we would be able to offer a unique opportunity for Wilmington, not only to enhance the quality of all patient care but in addition to that, we hope to be able to invest more that enhances the business community also."

For more on the proposals, pick up a copy of the Friday edition of the Business Journal.

Thursday's PAG meeting

The Partnership Advisory Group meets virtually at 5:30 p.m. The public can listen to the open session portions by:
• calling (415) 655-0003 and using the meeting number 805 810 361
• joining online through Webex at nhcgov.webex.com: use meeting number/access code: 805 810 361 and password PAGMeeting
All of the proposals can be found online nhrmcfuture.org/submitted-proposals.
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