The deadline for proposals for the future of New Hanover Regional Medical Center was yesterday. Six organizations submitted their pitches. Now the County’s Partnership Advisory Group will start the review process. WHQR’s Vince Winkel sat down with Medical Center President and CEO John Gizdic, to discuss the range of options being considered for the future.
There are basically four options regarding the future of the Medical Center: Sell it, a merger, a partnership, or remain County-owned.
Some have suggested that if the other counties served by the facility paid their fair share in taxes, the medical center could stay independent. Hospital CEO John Gizdic says that’s not realistic.
“You know, taxing other counties while theoretically possible is pragmatically impossible. There's no obligation for them to even, um, vote to tax themselves on top of, again, my understanding is it's been told to me is future elected officials could change that at any point in time. And then on top of that, when you look at our region, several of the counties in our region are shrinking in population. And so it would be very difficult for them to raise funds and raise money and raise taxes.”
Also in the cards: some sort of partnership arrangement.
Again, John Gizdic.
“Well, there's an infinite number of ways a partnership can look. There are, I would kind of describe it in maybe tiers of partnerships. The first tier of partnership would be really what we've called contractual relationships. And so those are just like they sound, we would contractually agree to do certain things and another organization would contractually agree to do certain things. It is the least permanent. It's usually the least invasive. The next tier would be some type of joint venture or what we've called a minority equity stake where somebody might come in and not looking to purchase the organization, not looking to go that extreme of a merger or anything like that. And then the next tier would be a majority equity stake or majority joint venture where the organization that we would be partnering with would have a majority stake either in the entire organization or in a specific part of the organization. And so, you know, that's the range of partnerships and they're truly an unlimited number of ways to structure partnerships within them.”
A third option on the table is a merger.
“Really, in my mind, a merger is much like a sale. I believe if you're talking about a for profit organization it would be a sale or an acquisition. Typically if you're talking about a not for profit organization taking over complete control of an organization, then it's more of a merger. So I really think the two are fairly synonymous. Merger and sale. I think the distinction from a legal perspective is probably more along the lines of which organization is doing the acquiring. And so, in my mind a merger is really much like, um, that far end of the spectrum. And so, it would be different than a partnership in the same way that a sale would be different than a partnership.”
The fourth option, would be an outright sale of the entire facility.
“Unfortunately that's been the majority of the conversation for the past eight months is around sale and a sale is not the only option. I want to stress that. And some even think the word partnership is code for sale and it is not. And so while it is an option, it is possible and it is one of the many options we could see, it is not the only option but in a sale theoretically, you know, that is really where somebody would come in and propose to purchase the organization. I mean in, in the most, the furthest model of sale, they would be coming in and buying everything. They would be buying it from the County since the County owns all of the assets. It would be much like the sale of your house.”
That’s Medical Center CEO John Gizdic, explaining the future options for NHRMC. All the proposals will be available to the public in the coming weeks.
Vince Winkel, WHQR News.
THE PROPOSALS CAME FROM:
Bon Secours Mercy Health
UNC Health Care