The Partnership Advisory Group (PAG) voted unanimously Tuesday night in favor of a final recommendation to sell New Hanover Regional Medical Center to Novant Health.
 
The move paves the way for what are expected to be positive votes on the agreement by NHRMC’s Board of Trustees this Thursday and by the New Hanover County Board of Commissioners on Monday.
 
The 21-member advisory panel – composed of business, nonprofit and faith-based leaders, physicians, NHRMC President and CEO John Gizdic and County Manager Chris Coudriet – endorsed the financial and operational roadmap for the hospital sale that would have not-for-profit Novant pay $1.5 billion to acquire the Wilmington-based system, itself a nonprofit and the third-largest county-owned hospital system in the country.
 
Formed in October 2019 to explore a possible sale or partnership for NHRMC, PAG’s Tuesday vote marked the formal completion of the group’s work.
 
“Tonight, we finish as one united team … you kept an open mind, you learned, you evaluated, you challenged, and in the end, you did what many thought wasn’t possible. You reached a unanimous recommendation,” Gizdic said.
 
Working off of sales proceeds currently estimated at $1.9 billion that includes the hospital’s cash reserves, the binding legal agreement being recommended by PAG and involving Novant Health, New Hanover County, UNC Health and the UNC School of Medicine reaffirms key commitments made by Winston-Salem-based Novant.
 
Those commitments include $1.25 billion to establish an independent community foundation focused on funding educational, health and social equity, community development and community safety initiatives; $300 million for a county revenue stabilization fund that could be used to retire county debt early, set aside funds for emergencies or minimize tax hikes; $200 million to help NHRMC employees migrate from a pension plan to Novant’s retirement package and address other transitional issues; $50 million for a Mental and Behavioral Health and Substance Use Disorder Treatment Fund; another $50 million to the NHRMC Foundation; and more than $3 billion for routine capital expenses and strategic master plan projects for 10 years following closing.
 
The agreement also enshrines Novant’s pledge to retain all of NHRMC’s employees at the time of closing for a minimum of two years and another to expand UNC’s local medical residency program.
 
Changes to NHRMC’s governance structure would include a new 17-member community-based hospital board.
 
“The new appointees will be identified prior to closing,” said Joseph Kahn, an attorney with the law firm of Hall Render, which has been advising the PAG.
 
Novant, Kahn said, will be able to ratify ongoing appointments to the new board as openings become available and will be “a partner at the table with you as opposed to someone coming in and dictating how the system should be run,” Kahn told the assembled advisory team. Ratification of board members must not be “unreasonably withheld” under the final agreement, he said.
 
PAG member Robert Campbell, pastor of Castle Hayne’s New Beginning Christian Church, questioned whether members of the public would be able to make nominations for appointments to the new hospital board.
 
While there is no formal process for doing so at the moment, Kahn told Campbell, persons interested in serving on the board or in nominating someone should make their feelings known.
 
Carl Armato, president and CEO of Novant Health, will join NHRMC president and CEO John Gizdic in a one-hour conversation about the proposed sale this Thursday at the 2020 WilmingtonBiz Conference & Expo, taking place online. The discussion begins at 9:30 a.m. Info: wilmingtonbizexpo.com.