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Novant touts NHRMC sale benefits but admits current situation is 'unsustainable'

John Gizdic, executive vice president and chief business development officer for Novant Health, and previously the chief executive officer of New Hanover Regional Medical Center.
John Gizdic, executive vice president and chief business development officer for Novant Health, and previously the chief executive officer of New Hanover Regional Medical Center.

On Friday, Novant Health held a press conference to discuss recent staffing struggles at NHRMC — and whether things would have been better as a county-owned hospital. NHRMC's former CEO, now a top Novant executive, said Novant's support had effectively saved the hospital, but admitted that even the company's impressive resources can't sustain the hospital's current operational strategy in the long run.

The increasingly public difficulties faced by NHRMC, including significant staffing shortages, have pushed many to ask if the hospital would have faired better if it were still owned by New Hanover County. On Friday, Novant held a press conference to address that question, with a familiar face — John Gizdic.

Listen to the full press briefing with John Gizdic here:

Gizdic was the CEO of NHRMC when the county owned it; now he’s the executive vice president for Novant, which bought the hospital two years ago. Like other Novant officials, Gizdic noted that hospitals around the state — and around the country — are dealing with extreme pressures from the Covid-19 pandemic, and the related shifts in the labor market.

He at one point said that, "as I understand it, there's not a hospital in North Carolina that is making money this year."

Gizdic did acknowledge the troubling conditions in NHRMC's emergency department.

"I want to acknowledge the situation wasn't ideal in our emergency departments this summer. We own that," he said.

That situation, which included a patient dying after waiting hours to be admitted, led to a federal agency threatening to cut the hospital's Medicaid and Medicare contracts if conditions were not improved.

Related: So, did someone die waiting for care at NHRMC? Plus, short-term rental redux

But Gizdic made it clear he didn't think a county-owned NHRMC would have weathered the storm better.

"I firmly believe New Hanover Regional Medical Center would be in much worse shape today, without our partnership with Novant Health. As the former CEO of New Hanover Regional Medical Center, I can't imagine trying to face this turbulent industry on our own. Had we remained independent, New Hanover Regional Medical Center would be increasingly challenged to compete for these resources against the rest of North Carolina, and the nation," he said.

Novant's resources

Gizdic says Novant’s resources have helped the hospital to recruit 200 new nurses and invest millions of dollars into raises and other benefits for existing staff.

“We have made a significant investment in our team, as I mentioned earlier, over $65 million. And to put that in context, In a normal year, historically, New Hanover Regional Medical Center averaged about $10 to $12 million in raises for our team members. So we're talking five to six times what we would be able to invest on our own in one year alone," Gizdic said.

Gizdic also noted that, despite the pandemic, some of the capital investments promised by Novant as part of the sale agreement have been moving forward. By contrast, he said, "if we were independent standalone, pretty much every project would be on hold right now, there would be no capital spending, because we would have no capital dollars available given our current financial situation."

Traveling nurses are draining finances, hampering morale

NHRMC's efforts have been aggressive, and wouldn't have been possible without Novant's financial backing. But, despite some success, the hospital has still lost significant staff — and it is relying heavily on traveling nurses. Despite recent attempts to wean the hospital off of the more expensive contract employees, NHRMC is currently relying on roughly 300 traveling nurses.

“That is at a cost that is three to four times what we pay a normal nurse or a staff nurse that works in the organization," Gizdic said. "And ultimately, that is not sustainable for the long term. It's not sustainable financially, it's not sustainable for the culture of the organization.”

Related: NHRMC escapes 'immediate jeopardy,' but morale issues linger

Gizdic acknowledges that working alongside higher-paid traveling nurses has been hard on the morale of permanent staff.

"We were used to stability and having, you know, almost like a family in each of our departments. And with this unique labor market, this labor shortage that we're facing, this gig economy that we find ourselves in, we don't have those same circumstances that we were once used to. And so it is tough. It's very difficult and challenging times," he said, comparing the stress to a "two-year-long hurricane."

Systemic changes

So, if the hospital's reliance on traveling nurses is unsustainable, culturally and financially, and there's no way to unring the bell in the healthcare labor market, at what point do the current stresses on NHRMC hit a breaking point?

Gizdic didn't prognosticate, but he agreed there is a crisis on the horizon if there aren't changes to the healthcare industry.

"We really have to look at changing the care model. Right, we probably are never going to produce enough nurses in this country to care for everybody that needs that care. But we think about Baby Boomers and the need for care. We're gonna have to look at different models, and how do we change that care model, to certainly elevate the nurse and have them in that care model, but have other disciplines as well. And so I think all of those are factors that have to go into solutions for the future," Gizdic said.

This is not a new conversation, Gizdic pointed out, and the unsustainability of
the current healthcare model was a major part of his support for selling NHRMC — or, as he saw it at the time, partnering with a larger company to help the hospital survive in an increasingly tough market.

Related — Deep Dive: Here’s what the ‘uncharted waters’ of NHRMC’s potential sale look like (Port City Daily)

But even the additional resources of Novant don't change the fact that the ground is shifting under hospitals across the country, with no exception for NHRMC. That shift has become acute sooner than many thought it would, Gizdic said.

Solutions could include changes in the way hospitals provide care — relying more on preventative care, outpatient care, and focusing on the social determinants of health. It could also mean changes to the way insurance companies reimburse hospitals for the care they provide — and even state and federal laws that regulate how that all works.

Those changes won't be easy, but they will be political. And that's something that concerns Gizdic.

“ I'm concerned that it's become a political issue instead of you know, really a core issue that our citizens our community needs and relies on," he said.

Disclosure notice: Novant Health provides has provided underwriting support for WHQR.

Ben Schachtman is a journalist and editor with a focus on local government accountability. He began reporting for Port City Daily in the Wilmington area in 2016 and took over as managing editor there in 2018. He’s a graduate of Rutgers College and later received his MA from NYU and his PhD from SUNY-Stony Brook, both in English Literature. He loves spending time with his wife and playing rock'n'roll very loudly. You can reach him at BSchachtman@whqr.org and find him on Twitter @Ben_Schachtman.