CoastLine: NHRMC Future Could Include Sale, Partnerships, Or No Change, Say Officials

Aug 7, 2019

New Hanover Regional Medical Center could soon be up for sale.  The county-owned hospital system, approved by voters in the early 1960s and opened in 1967, is doing well.  

So well, in fact, that last year, NHRMC posted a nearly-$80 million increase in its net position.  The year before that, it finished with a $98 million surplus – that’s revenues over expenditures -- essentially the profit – folded back into NHRMC.   

If, on September 3rd, New Hanover County Commissioners pass a Resolution of Intent to Sell, the next step is creating a Request For Proposal.  According to a county press release, the actual sale could take more than a year to complete.  Officials say in the release that any buyer would have to show how they would advance current NHRMC priorities – including improving access to care and wellness through more consumer-centric options, advancing the value of the care through higher quality and lower costs, effectively managing public health to not only treat the sick but keep people well, and achieving health equity through community partnerships and activities that remove barriers to care, enabling residents to achieve optimal health.

A study by the Robert Wood Johnson Foundation that examines the effects of hospital consolidation on prices, costs, and quality of care across the nation finds that, “Hospital consolidation generally results in higher prices. This is true across geographic markets and different data sources. When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent.”

Researchers consistently find hospital competition improves quality of care.

Health Care Economist Marvin Gaynor of Carnegie Mellon told Congress last year that medical prices are "high and still rising, they vary in seemingly incoherent ways...there are serious concerns about the quality of care, and the system is sluggish and unresponsive, lacking the innovation and dynamism that characterize much of the rest of our economy." 

One of the reasons for this state of health care in the U.S., says Gaynor, is lack of competition. 

Since local officials announced their intention to explore a sale on July 23rd, the public discussion has evolved.  It began with sale enthusiasts touting a roughly-$1 billion windfall for the county.  It took more than a week for concerned local stakeholders to get their voices heard – and even now – about two weeks after the initial announcement, opponents and skeptics of the sale – are just beginning to make their cases for more information and a slower process.

Local officials say the Resolution of Intent To Sell is misleading.  While that's the title of the resolution, passing it, they say, is the only way policymakers can open the question about the future of NHRMC -- whether that's partnerships, management changes, a sale, or no change. 

In this conversation, New Hanover County Manager Chris Coudriet and NHRMC President and CEO John Gizdic say they are not committed to selling -- but rather to an exploration of the best structure to support the approximately-$1 billion increase in funds over the next decade the hospital system will need to serve the growing population in the region.

On this edition, we explore the case for selling, and unpack the concerns that have arisen through our own interviews. 

Guests:

John GizdicPresident and CEO of New Hanover Regional Medical Center

Jeff JamesCEO of Wilmington Health Associates, a local multi-specialty medical group

Chris Coudriet, New Hanover County Manager

What's next?  

Two public forums are planned before the September 3rd county commission vote:

  • Monday, August 19, 6-7:30 pm, Northeast Regional Library, 1241 Military Cutoff Road, Wilmington
  • August 20, 8:30-10:00 am, Senior Resource Center, 2222 South College Road, Wilmington

At the September 3 County Commission meeting, the Commissioners will decide whether to explore alternative owners. If the resolution is approved by a majority of Commissioners, the county, in cooperation with NHRMC leadership, will develop a Request for Proposal (RFP) based on community priorities that will be distributed nationwide.