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Health Care

Sen. Peterson Files Complaint About Hospital Process Ahead Of Vote

By Vicky Janowski, posted Sep 16, 2019
Ahead of a vote about the future of New Hanover Regional Medical Center, state Sen. Harper Peterson on Monday turned in a complaint to the N.C. Attorney General’s Office about how he feels the process has been handled so far.
 
“…fundamental fiduciary, legal and procedural responsibilities have been put in question and have damaged the public’s trust in fair and open government,” Peterson (D-New Hanover) wrote in his letter that outlines a number of questions about the issue.
 
New Hanover County commissioners later on Monday afternoon voted 3-2 to seek offers for potential new owners.
 
With the resolution, which is required by state law, a request for proposals can now be crafted for outside health care systems to make their offers to buy or manage NHRMC, which is county owned.
 
County manager Chris Coudriet and NHRMC President and CEO John Gizdic in late July announced that the county-owned health care system would be looking at exploring a new ownership model.
 
At that announcement, and at public forums held since then, they have emphasized that Monday’s vote does not commit the county to sell but to seeing what offers would be made for NHRMC, the third-largest county-owned hospital remaining in the U.S.
 
Peterson, who wrote the strongly-worded letter that accuses county officials of acting outside legal bounds, called for more time on the process.
 
“There is no record of a public discussion or decision by the NHC Commission to consider a matter of such enormous consequence; the potential sale of NHRMC, no record of directing the County Manager to spearhead this initiative, no record of directing the County Manager to so closely partner with NHRMC’s CEO to manage and message this initiative and speculation on its far reaching consequences,” Peterson wrote in his letter, which also questions whether a deal already is “in the works” and what properties the county owns instead of NHRMC.
 
“There has been no accountability to the NHC taxpayers regarding the tens of thousands of tax dollars spent on NHC staff time, resources, marketing, etc., nor the tens of thousands of NHC tax dollars spent on contracts with third parties, including legal advisors, business consultants and communication specialists dating back months prior to the July 23rd public pronouncement that an effort would begin,” the complaint letter continued. “This has led me to believe that there has been ‘fiduciary lapse’ by the NHC Commission with respect protecting the taxpayers of NHC.”
 
Requests for comment from New Hanover County and NHRMC representatives were not immediately returned this afternoon.

Commissioner Woody White during Monday's board of commissioners meeting addressed some of the criticisms to the packed audience.

“So these conspiracies out there that the deal is done, and the signs that you’re holding up about how there’s some nefarious intent or even the completely false allegation from some people that the deal is in, that there have been things done behind the scenes is an outrage and insulting to me,” White said, who described Peterson’s filing as “reckless.”
 
“Any evidence of any backroom deals conversations, emails, text messages, clandestine meetings, which is a word that has been used, to bring it forward,” he said. “Show it to the police. Show it to the SBI [State Bureau of Investigation]. I want to see it. Because it hasn’t happened.”

Laura Brewer, communications director for the state Attorney General's office, said the office had received the complaint and would review it.

"The Attorney General has the authority to review transactions when a non-profit becomes a for-profit," she said in an email. "Anyone who is concerned about this issue should feel free to express those concerns to our office via www.ncdoj.gov/complaint."

Peterson said he filed the letter to draw Attorney General Josh Stein’s attention to the issue.
 
He pointed out that Stein became involved in the recent $1.5 billion sale of Asheville’s Mission Health (a nonprofit) to HCA Healthcare (a for-profit), helping to negotiate provisions on issues such as rural hospital services and board makeup of the nonprofit created with the sale proceeds there. That example of regulatory oversight, however, came toward the end of the deal.
 
Peterson said he hoped instead to get Stein’s office to weigh in earlier.
 
“I want him to review everything that has gone on leading up to this that hasn’t been disclosed. I want this to trigger his concern,” he said. “I didn’t want to politicize it before this step, but now they’re voting.”
 
Click here to watch a live stream of the commissioners meeting.
 
The Business Journal will send out a separate news alert email this afternoon following the vote.
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