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In $50-million deal, Novant will own Pender hospital, invest in county-wide healthcare

Pender Medical Center, formerly Pender Memorial Hospital, owned by the county and operated by Novant.
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Pender Medical Center, formerly Pender Memorial Hospital, owned by the county and operated by Novant.

Pender County officials had been privately mulling whether or not to continue the county's relationship with Novant Health or go with a new operator for the Pender Medical Center — but the $50 million deal announced Friday will see Novant own the hospital, and expand its role in the county's healthcare operations.

After a closed session during Friday's special meeting, Pender County commissioners unanimously approved a $50 million agreement with Novant Health that includes improvements to the Pender Medical Center (formerly Pender Memorial Hospital) in Burgaw, as well as improved access to healthcare services across the county.

County officials said the deal would help ameliorate concerns about delivering healthcare to the county's more rural areas — a longstanding issue that had been part of the county's internal deliberations over whether to renew Novant's contract to manage its hospital or go with a new operator.

The county had hired Ascendient, a healthcare consulting firm, to review Novant's operating agreement ahead of its expiration in mid-July. According to conversations with top Pender and Novant officials, negotiations with Novant were ongoing and fluid, and as recently as last week, multiple options were still on the table. Since then, the deal with Novant appears to have evolved quickly, resulting in Friday's announcement.

The deal

According to both Pender County and Novant, the deal outlines a $50 million commitment over the next decade, including "proposed building and facility improvements, new permanent medical equipment, and recruitment of new health care professionals to expand services."

A top priority is developing Pender Medical Center into a "community general hospital" within five years, addressing a major concern for Pender County leaders over the past several years. According to the county, that investment is "part of the transaction that will make Novant Health the owner of Pender Medical Center."

A community general hospital is defined under North Carolina law as a “hospital that provides diagnostic and therapeutic services to patients for a variety of medical conditions, both surgical and nonsurgical, such services being available for use primarily by residents of the community in which it is located.”

Legal documents finalizing the deal will be drawn up by September, with the aim of closing the transaction in six months.

Pender County officials said details are confidential under state law, but outlines five goals:

  • Developing Pender Medical Center into a community general hospital within five years
  • Maintaining Pender Medical Center’s status as a critical access hospital
  • Improving access to primary and specialty care in Pender County
  • Recruiting specialty care physicians to offer services in Pender County
  • Maintaining and improving acute and ambulatory facilities in Pender County.

Uncertainty

Since last fall, Pender County Commissioners had been considering whether to stay with Novant or go with another operator; the county brought on Chapel Hill-based healthcare consultancy firm Ascendient at the beginning of the year to help weigh its options.

In mid-May, President Shelbourn Stevens told WHQR that Novant was still hopeful that “we would be that health care provider” for Pender. And according to a statement to WHQR last Tuesday from Ruth Glaser, president and chief operating officer of Novant Health Pender Medical Center, "Novant Health wants to remain part of the community and we are in talks directly with Pender County leaders. We hope to come to a positive agreement that we can share in the near future."

Novant inherited a contract to run Pender’s main hospital — formerly Pender Memorial — that was held for two decades by New Hanover Regional Medical Center as a county-owned hospital. That contract was coming up for renewal in 2019, when the process to sell NHRMC was building momentum. Pender County commissioners noted at the time they had considered other healthcare providers but agreed to a two-year extension to see how the sale shook out – and another two-year extension in 2021 to avoid unsettling the deal with Novant.

Still, concerns persisted. Pender County leaders had voiced concerns about delivering care to the much more rural western part of the county and about whether Novant would make good on strategic plan commitments to upgrade Pender Medical Center now that it’s putting significant resources in the planned Scotts Hill facility, which is just across the Pender County line in northern New Hanover County.

Below: Release from Pender County and Novant Health.

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.