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Duke Health Presentation: Officials Emphasize Shared Values With NHRMC

By Vicky Janowski, posted Jun 9, 2020
Update: This story has been updated to include the full video of Duke Health's presenatation.

Duke Health and New Hanover Regional Medical Center share similar focuses on improving community health, Duke officials said during their public presentation late Tuesday afternoon outlining their interest in NHRMC.
 
“We know this is a once-in-a-generation transformative opportunity,” said Eugene Washington, chancellor of health affairs at Duke University and President and CEO of Duke University Health System. “We want to work with you to improve the lives of the people who live in the communities we serve.”
 
The talk, the first of three from the short list of health systems interested in partnering or buying NHRMC, was streamed online and on TV so that the public could watch, though the online feed cut off. The full presentation is shown below.
 
An hour-long Q&A with the Partnership Advisory Group (PAG) members was scheduled to take place after the public portion and in closed session. (Novant Health and Atrium Health also are slated to present this week.)
 
Duke Health has proposed several scenarios for an acquisition deal, as well as an openness to other partnership structures, such as a joint ownership or lease.
 
“Improving health is our driving force,” Washington said during Tuesday’s presentation. “We’re a trusted health system, with more than 70,000 inpatient stays this year, and we had approximately 2.5 million outpatient visits this past year. In any given year we will have in training approximately 3,700 health professional students and 1,500 residents and fellows.”
 
Duke’s initial proposal detailed a couple of options for a purchase. But the health system, along with Novant and Atrium, has been in due diligence discussions with PAG members and NHRMC officials since that initial proposal.
 
One option, according to Duke’s proposal, includes a lower amount in upfront funding – $500 million at closing plus NHRMC and New Hanover County keeping its net cash, which before the financial drain of the COVID-19 pandemic was estimated at $440 million. That was combined with a pledge to fund NHRMC’s strategic plan and capital projects at a minimum of $1.9 billion over 12 years.
 
Another option detailed instead $1.35-$1.4 billion for an all-cash closing, but a minimum of $400 million for capital improvements over the next five years. The team of four Duke Health executives and physicians who presented did not get into details of the proposed financials.
 
Here are some of the areas that they did discuss during their presentation Tuesday:
 
• On employees: Duke Health, Washington said, has not furloughed or laid off employees during the financial strain affecting hospitals during COVID-19. “And just a couple examples of how we demonstrate our care for our people. We were one of the largest first employees in the state that increased minimum wage to $15 an hour for all employees back in 2019,” he said. “That is more than twice the current federal and state minimum wage of $7.25.”
 
On local control: Under the proposal, a local governance board made up of a majority of residents would have responsibility “for quality, for safety, for operations and for strategy as well as other things there … local residents, local physicians, local providers and the senior staff of New Hanover Medical Center, and that’s a very important principle for us,” said William Fulkerson, Duke University Health System executive vice president. “We certainly hope and plan to retain [NHRMC President and CEO] John Gizdic and his team to be the senior staff going forward. They’ve done an outstanding job for New Hanover and as a senior team they will continue to be accountable to that local board for the performance of the New Hanover system.”    
 
• On research capabilities: The representatives said that Duke encompasses one of the largest biomedical research enterprises in the country with about $800 million a year in sponsored research support. “One of the things that I think makes us unique it, and one of the things that I’m really excited about as a community hospital is our ability to really focus on and have access to all of the resources of an academic health system and the university,” said Duke Regional Hospital President Katie Galbraith, adding that those resources include data analytics.

Click here for Duke Health’s presentation slides.
 


Upcoming presentations this week are 5:30-6:30 p.m. for the public portion.

• Wednesday-Novant Health
• Thursday-Atrium Health

 
The presentations are slated to be livestreamed so the public can watch on NHCTV.com or on NHCTV cable stations (Channel 13 on Spectrum and Channel 5 on Charter).
 
The Business Journal will post recaps of the upcoming presentations Wednesday and Thursday evening.
 
The proposal documents are online at nhrmcfuture.org/submit­ted-proposals.

For a roundup from the Business Journal on the proposals, including links to video interviews with representatives of the three health systems, click here.
 
For a recent BizTalk interview with Fulkerson, click here.
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