Health Care

PAG Recommends Negotiating NHRMC Sale With Novant

By Vicky Janowski, posted Jul 2, 2020
The Partnership Advisory Group on Thursday evening unanimously picked Novant Health to continue negotiating with on buying New Hanover Regional Medical Center.
Winston-Salem-based Novant, which offered $2 billion to New Hanover County to acquire the hospital and make it a Southeastern North Carolina hub for the nonprofit system, rose to the top of three health systems the advisory group has been meeting with in recent weeks. Atrium Health and Duke Health were the other two involved in recent talks that showed interest with buying the county-owned NHRMC.
“I think we’re ready to look at what is the best recommendation we can make to move forward,” said Barb Biehner, co-chair of the Partnership Advisory Group (PAG), who outlined work the 21-member group has done in evaluating proposals for NHRMC over the past nine months since it formed.
The three finalists turned in strong proposals, said Bill Cameron, the PAG’s vice co-chair, but Novant came out ahead in an evaluation of 18 issues the group has been looking at such as avoiding staff shortages and engaging independent providers.
(See the PAG’s evaluation chart below.)

The hospital’s trustees board and the county commissioners would have to agree to the PAG’s recommendation to continue negotiations with Novant over the next couple of months. The trustees meet next on Tuesday, and county commissioners are scheduled to meet on July 13. Those two boards would have to agree on moving forward with Novant and would have the final say on any deal, if one is reached.
In its initial proposal, Novant offered up to $2 billion to New Hanover County, $50 million to the NHRMC Foundation to fund unmet community needs and $3.1 billion investment in strategic master plan projects over the next decade.
Atrium Health issued a statement during the PAG meeting.
“Over the past few months, it has been an honor for Atrium Health to share our vision and goals for what we could have achieved together with New Hanover Regional Medical Center,” it stated.
The Charlotte-based system initially offered a long-term lease, with officials saying they were responding to pushback from the community about a sale. It later added an additional acquisition option to compete with Novant’s offer.
“While we are disappointed the Partnership Advisory Group is not recommending Atrium Health as the finalist to advance in this process, we respect their decision and understand the tough choice they had to make with $5 billion being offered by the recommended finalist,” read the statement from Atrium, which also currently manages NHRMC’s physician group.
If a deal is forged with Novant, that contract with Atrium would be one of the issues that will have to be discussed further.
“With over 300 physicians and advance practice providers in the greater New Hanover area, Atrium Health will continue to do what is in the best interest of providing the personalized care this community counts on each day,” Atrium officials said Thursday evening.
During the recent due diligence talks, Novant announced an agreement with UNC Health and UNC School of Medicine to expand the university’s existing medical training, residency program, clinical trials, research and pediatric care at NHRMC.
“I believe the risk of not doing something is riskier than partnering with Novant and UNC Health and the UNC School of Medicine,” Cameron said.
Novant Health had $5.4 billion in revenue and $4.6 billion in net assets last year.
The system already has a local presence with Novant Health Brunswick Medical Center in Bolivia and physician group practices throughout Brunswick County.
Last July NHRMC President and CEO John Gizdic and New Hanover County Manager Chris Coudriet first publicly floated the idea of examining NHRMC’s future, citing changing conditions in the health care industry and the dwindling number of hospitals still owned by local governments.

Joseph Pino, NHRMC’s vice president of graduate medical education and SEAHEC executive director, said the advisory group did not come to its decision lightly.
“It’s really the most important … decision for New Hanover County at large that probably ever occurred,” said Pino, the PAG’s other vice co-chair “And it’s not just this committee making a decision; it’s affecting employees, their families, our community and all the surrounding counties.”
PAG member Cedric Dickerson said Novant’s culture seemed to align best with NHRMC’s culture.
“Novant, they say upfront that, ‘Health equity is a core of the way we do business.’ That sealed it for me,” he said.
“I think that the other partners wanted to partner with New Hanover Regional, and I think they considered us the diamond that we are,” Dickerson said, “but Novant considered us the crown jewel.”
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