Pender County commissioners are weighing the future of the county’s only hospital since its current operating agreement with Novant Health expires next summer.  

One option the local officials might consider is a modern replacement hospital to serve western Pender County.

A majority of Pender County commissioners said they are open to exploring alternative options for the operation of Novant Health Pender Medical Center (formerly Pender Memorial Hospital) ahead of the county’s lease agreement’s approaching expiration with Novant Health. But first, commissioners want to give Novant the opportunity to present its plans before looking elsewhere. Novant Health inherited New Hanover Regional Medical Center’s agreement with Pender’s hospital when Novant bought NHRMC.

Twice extended in recent years, the county’s operating and lease agreements with the hospital system are set to expire July 17, 2023. This time, the commissioners say they want to talk about larger potential changes instead of another extension.

According to interviews with all five commissioners, board members are approaching the deadline with an open mind. If upcoming talks with Novant Health aren’t fruitful, alternative arrangements could potentially lead to the county shopping for an entirely new health care system operator and/or even selling the assets, depending on the deal(s) presented, some of the commissioners said recently.

A Novant Health spokesperson said the system has invested $20 million in capital projects at the Pender facility over 23 years, “including renovations and facility improvements” and “other major investments, both in team members and by supporting hospital operations.”

“We remain committed to Pender County under an operating agreement with the current term ending in July 2023,” the Novant spokesperson wrote in an email. “We look forward to beginning discussions with Pender County to determine the best next steps for the community.”

County officials are set to sit down with Novant representatives next month, commissioners said, adding that they anticipate receiving a presentation from hospital officials. 

“If they address all our issues and make a commitment to do what we think is important to achieve our goals and meet our expectations,” commissioners chairman David Piepmeyer said, then the possibility of considering other health care operators “will go away.” 

As to the prospect of potentially divesting the county’s hospital assets, Piepmeyer said, “We’ll see.”
Commissioner Jackie Newton said Novant and NHRMC have been good partners. “We want the most bang for our buck,” she said. “It is our wish that a medical presence remains in the town of Burgaw to serve the people of western Pender County,” she said. “To do anything else would not be serving our citizens well.”

“No commissioner wants to be in the hospital business,” Commissioner George Brown said.

Brown said his preference is to continue a relationship with Novant while retaining ownership of the hospital assets. “I want it to be a partnership of sorts. I want it to be something the commissioners can be involved in,” he said. 

Commissioner Fred McCoy said he wants to keep the existing Pender Medical Center operational. “We'll have a look at options, and we don't have all the answers yet,” he said. “But I'm definitely supportive of keeping the hospital going.”

Extended leases
Like New Hanover County before its sale last year to Novant, Pender County owns its hospital facility, which is nestled in a residential area near downtown Burgaw. Pender County first partnered with NHRMC in 1999 to run the day-to-day operations of the hospital, which opened in 1951. 

The 86-bed facility features an emergency department, surgery and endoscopy, infusion clinic, skilled nursing, short-term rehabilitation, long-term care and imaging services. Sitting on a 3.7-acre parcel at 507 E. Fremont St., the property is valued at $9.3 million, according to the latest available county records. 

The rural hospital struggles to attract physicians, Piepmeyer said. This has led to a slowdown in the turnaround time for emergency service personnel, who must wait for a patient to be processed before being released to respond to a new call, Piepmeyer said. “The root cause of it is the amount of nurses and physicians. We have a limited pool of physicians,” he said. “We need to remedy that.” 

After 20 years of partnership, Pender County’s lease agreement with NHRMC initially neared its expiration in the summer of 2019. This was around the time New Hanover County first signaled its interest in selling its assets (which eventually culminated in the $1.5-billion sale to Novant that closed last year).

Even then, Pender County commissioners were interested in looking for new health care partners but opted to maintain the status quo with NHRMC to see how the sale negotiations settled. Commissioners extended the lease in 2019 to July 2021, but before that date arrived, the board extended the agreement for a second time last year for a two-year term to ensure the NHRMC-Novant deal could close without a hiccup. 

A replacement hospital?
Since the acquisition, Novant has forged ahead with plans first initiated by NHRMC before the sale to build a new 66-bed hospital at its Scotts Hill campus, which is near the New Hanover-Pender county line. The $210 million project is expected to open by 2024. 

As a previously county-owned facility, NHRMC’s inability to issue debt for projects outside of county lines was one of the factors that prompted the initial sale exploration. One month before New Hanover County approved the Novant deal, Pender Memorial President and COO Ruth Glaser cited the debt restrictions to commissioners in a September 2020 public hearing: “Our citizens in Pender County are really deserving of more than what we have,” she said. 

Commissioners have raised concerns about medical investments in Pender Medical Center or western Pender County in the wake of the Scotts Hill plans, so that the county’s rural residents are also provided high-quality and convenient access to health care. 

Commissioner David Williams served on the NHRMC Board of Trustees for over a decade; he now represents Pender County on the replacement successor board formed as part of the sale, the Novant Health Coastal Region Board of Managers; is a longtime member of the Pender Memorial Board of Trustees; and served on the hospital sale exploration team, the Partnership Advisory Group.

Williams’ roles have granted him access to NHRMC’s strategic plan. Per the purchase agreement, Novant agreed to spend $2.5 billion to complete all projects identified in the strategic plan in a five-year period following the closing (February 2026), implemented on par with the plan’s timeline. So far, Novant has made $300 million in commitments as part of its post-sale obligations, including the Scotts Hill hospital, new medical offices in Brunswick County and the Wilmington main campus’ neuroscience tower. Absent among those recent announcements have been commitments inside Pender County lines. 

A replacement of Pender Medical Center was clearly identified in the NHRMC strategic plan inherited by Novant, according to Williams. This replacement has been discussed in open meetings among the hospital boards and is widely recognized by top area health care officials as a priority, he said. 

“Pender Memorial – that particular building, that particular hospital – is not the future of health care in western Pender County. It needs to be replaced,” Williams said. “I believe the folks in western Pender County deserve access to the modern, up-to-date services just like we enjoy where I live on the east side.”

Health care trends are prompting hospital construction along well-traveled highways, Williams said, and plans for Pender Medical Center’s replacement could take place on the Interstate 40 corridor. “That’s where it needs to be. That much I can say beyond a shadow of a doubt,” he said.

A new hospital and Novant’s partnership with UNC School of Medicine could help the county’s ability to attract much-needed physicians, Williams said.

If a new facility is constructed, Williams said he believes it’s possible that Pender County could retain its hospital property. “The county could use that for much-needed office space,” he said. “Emotional attachment to a building should not come into play on a decision like this.”

Williams is confident Novant will come prepared with a presentation that will ease all of the board’s lingering concerns. “Hopefully," he said, "all of us will go, ‘Wow. We’re in really good shape. We don’t need to shop.’”