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Novant Negotiations: Looking At NHRMC Employees

By Vicky Janowski, posted Jul 14, 2020
The letter of intent approved Monday night for New Hanover County, NHRMC and Novant Health provides a look at the areas being negotiated on for the hospital’s sale.
 
County commissioners voted 4-1 Monday on the nonbinding letter, a more than 40-page document, outlining the framework of negotiations that will now take place with the Winston-Salem-based, not-for-profit health system in what could be a $5 billion deal between payments to the county and commitments for capital projects. Monday’s vote came after a 16-1 vote also to move forward from the hospital board of trustees, the other group that has to sign off on any final deal.
 
“I want to thank the New Hanover County Board of Commissioners along with the Partnership Advisory Group and the New Hanover Regional Medical Center Board of Trustees for their trust and selecting Novant Health to be the future partner of New Hanover Regional Medical Center,” Novant Health CEO Carl Armato said Tuesday.
 
Now the county, NHRMC and Novant Health will hash out the many details needed to come to a definitive agreement, which has to be made public and be the subject of a public hearing before a final vote. That vote is expected to take place in September or October.
 
Click here to read the full letter of intent.
 
NHRMC is the region’s largest employer with more than 7,000 workers, and their transition to a Novant-owned system was the focus of several parts of the letter of intent.
 
Novant has pledged to avoid layoffs and keep all NHRMC employees for a minimum of two years after the closing. Commissioner Jonathan Barfield asked during the commissioners meeting about that pledge. “The hospital for years [had a policy] that they would have no layoffs, and looking at the [letter of intent] document, you’re looking at a three-year horizon, and then those things may happen,” he said. “What commitment will be given to employees that they’ll have long-term employment with the hospital?”
 
Joe Kahn, a health care attorney with Hall Render, who has been working with the Partnership Advisory Group, said the employees have been a key part of the discussions.
 
“Novant Health is committed that for the initial two-year period there won’t be any layoffs, any reductions in force,” he said. “And then beyond that, because we don’t know what the future holds with respect to health care and the operation of health care, what they’ve agreed is that any layoffs that might occur in the future beyond that initial two-year period would have to be approved by the local board … just as there is now where there’s a local board that would have oversight and decision-making authority for any such layoffs. There would be that board here in the community, made up of residents of the community that would have to approve any layoffs on a go-forward basis.”
 
According to the letter language, Novant would offer employment to all employees at their current salaries and job titles outside of firing someone for cause. Areas ranging from expanding NHRMC diversity hiring efforts to enhancing nursing education programs to addressing staff recruitment also are discussed in the letter.
 
Sometime within three years, Novant, in collaboration with NHRMC, would bring a shared services center and corporate department to the area.
 
And for at least three years Novant would provide wage and benefits packages that are comparable to what NHRMC already offers.
 
Because NHRMC has a pension plan for its employees, which Novant Health does not, officials have drafted plans for a $200 million pot of funding from the $1.9 billion sale proceeds into what is being called a Team Investment and Resiliency Fund to help employees with the transition. The letter does not include much detail about that fund or how it would be dispersed.
 
The fund “would help ensure a beneficial transition from NHRMC’s existing pension plan to Novant Health’s retirement plan and support staff and provider retention and resiliency initiatives,” stated a news release last week from the county and NHRMC.
 
At Monday’s meeting Commissioner Rob Zapple – the lone vote against approving the letter of intent – questioned why that transition money had to come from the county’s share of sale proceeds and not from Novant.
 
“Why are the taxpayers of New Hanover County paying for bonuses, new retirement packages and resilience funding for New Hanover Regional Medical Center employees to transition to Novant,” he said. “Novant is buying the entire enterprise and should now be responsible for paying the costs of reassuring their new employees that their jobs and the benefits are secure. There are thousands of citizens in New Hanover County that have gone without paychecks for the past four months.”
 
Armato said Tuesday that funding recommendation came from the Wilmington side.
 
“I was pleasantly surprised by and appreciative of how the Partnership Advisory Group and the New Hanover Regional Medical Center board came up with that … one of their big commitments was helping local physicians, advanced practice providers, nursing team members and all of the team members at New Hanover Regional Medical Center have a smooth transition into a new organization,” he said. “It was something that they came up with. But we supported [it], and we’re going to ensure that both on the money that they put up and the commitment from Novant Health, that we take care of the team members at New Hanover Regional Medical Center.”
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