Attorney General clears NHRMC-Novant sale deal -- with new conditions
A year and a half after the sale process of the New Hanover Regional Medical Center began, the state Attorney General has approved a deal with Novant Health -- but, the approval does come with some new conditions. If those are met, the partnership between NHRMC and Novant will begin on February 1.
Note: You can find details of the AG's review of the deal, along with responses from New Hanover County and other key stakeholders below.
For months, critics and supporters alike have waited for North Carolina Attorney General Josh Stein and his office to complete a review of the hospital sale. Stein now confirms he will not object to the deal, but his office has negotiated several key new conditions.
Stein heard many concerns from New Hanover County, most of which he says relate to the $1.25 billion community foundation, which will manage the sale proceeds for charitable grantmaking.
“That's what we've heard from a lot of people in New Hanover County was they wanted to make sure that this $1.2 billion foundation served them. And we negotiated a number of provisions to enhance that.”
Those provisions include new transparency and engagement requirements for at least two public meetings before the Endowment board decides on its grant criteria, and two annual public meetings going forward.
In addition, the board will make public its grant giving criteria and activity, its mission statement, and its conflict of interest policy.
Stein’s review also features diversity requirements, including an increased focus on the Hispanic community, and adding two members to the board, who must have experience in public health, supporting underserved communities, or promoting racial equity. That 13-member board will also create an advisory board, to represent the broader community.
It’s worth noting that Stein’s negotiations do not make the endowment board public, or make it responsive to public records or meetings laws, nor does it appear to bring it under the jurisdiction of the state auditor.
There have also been questions about representation outside of New Hanover County. Stein’s office will not require board membership from the other six counties in the hospital’s coverage area, however Stein says,
“We reviewed the documents to ensure that the environment can make grants to the broader service area. And we believe that the endowment should not be limited to the county lines of New Hanover County, to serve the broader region.”
Asked about allegations of unethical or illegal actions related to the sale, which include formal complaint filed by State Senator Harper Peterson in September of 2019 [which can be found at the end of this article] and several statements from the Save Our Hospital organization, Stein says:
“We considered all the input we got from the public, whether it was from an email or a letter or phone call, and then conducted our review.”
Stein didn’t directly answer what the status of Peterson’s complaint was. He did say he remains concerned about the trend of hospital consolidation in general, and hopes it sparks further discussion. Right now, Stein says his ability to object can only go as far as state statute allows.
“The statute is being satisfied. And so at that point, I don't really have an ability to object according to the statute. So I want to engage the public and legislature in a broader question about whether there are other questions that should be asked when transactions of this nature.”
Response from New Hanover County Chair Julia Olson-Boseman:
“We appreciate the Attorney General’s thorough review of this transaction.There have been so many people who have examined, researched, and carefully vetted the facts and details throughout this process – and that now includes the Attorney General’s Office with his detailed review. I believe it’s now time to acknowledge the comprehensive and open process that got us here, as well as the integrity of the people who have been involved. And with the Attorney General’s decision today, it is my hope that this can bring closure to the debate around this partnership and that our community can rally around this incredible opportunity. I look forward to the future that lies ahead for healthcare in this region, as well as an endowment that will transform our community and make us stronger.”
You can find the county's full response here, including comment from NHRMC President CEO John Gizdic, President and Chair of the New Hanover Community Endowment Spence Broadhurst, and Novant President and CEO Carl Armato.
Josh Stein NHRMC Novant Deal by Ben Schachtman on Scribd