WILMINGTON — A resolution passed to begin the bidding process for the potential sale of the county-owned healthcare system despite strong opposition from protestors and two county commissioners.
In a 3-2 vote Monday afternoon, commissioners approved an “intent to sell” resolution for the county to begin formally exploring new ownership of New Hanover Regional Medical Center (NHRMC), the region’s largest health care provider. Before the meeting, a group of about thirty people marched through the lobby of the New Hanover County Government Center chanting, “Vote no, go slow.”
The resolution mandates the creation of a “partnership advisory group” to develop Request for Proposals (RFP) and to advise commissioners throughout the process. County Manager Chris Coudriet and NHRMC President and CEO John Gizdic, who both presented to the board before the vote, will join hospital, physician, and community leaders in the formation of the group.
READ MORE: Here’s what the ‘uncharted waters’ of NHRMC’s potential sale look like [Free Read]
Coudriet recommended a public hearing on October 15 to begin the process of developing the RFPs. Each RFP sent to prospective buyers will be open for no less than 60 days, according to Coudriet, and each proposal received will be presented during at least one public hearing. He also promised another public hearing before a final contract is made.
“This resolution does not direct or confirm a sale of New Hanover Regional Medical Center,” Coudriet told commissioners. “It’s a starting point for us to begin collecting all of the data that we would need and ultimately the county commission would need to determine what is the best path forward for healthcare in our community.”
Commissioner Patricia Kusek first made a motion to approve the resolution, seconded by Julia Olson-Boseman and given the majority by Woody White. Rob Zapple and Chairman Jonathan Barfield opposed it.
‘Lack of transparency’
Before the vote, Zapple cited a process that lacked transparency, ignored input from the medical community, and risked losing local control “of an enormously valuable asset.”
“I’ve spoken to hundreds of citizens across our county and the vast majority share my concern,” Zapple said. “This process is being rushed unnecessarily and is not transparent, and important stakeholders in this decision are being ignored.”
Zapple said hundreds of doctors, nurses, and medical professionals have been excluded from the conversation. According to Zapple, the consulting firm hired to represent NHRMC, Jarrard Inc., has already been in touch with a number of large healthcare systems.
“What are the results of those conversations? Why hasn’t that information, or even a summary of that information, been made public?” Zapple asked.
Because RFPs are contractually binding quotes and represent the legal first step towards a contract, he said this could be interpreted that a sale of the hospital “is further along than they are willing to admit.”
Zapple said hospital medical staff had requested a 90-day delay in the “intent to sell” vote in order to educate physicians and the community, and a separate subcommittee of physicians requested a 12-month delay on any action. According to Zapple, some on the committee were issued non-disclosure agreements in a bid to prevent them from discussing the sale.
“That is not only a failure of transparency, it begs the question, ‘What does the hospital not want us to know or discuss?'” Zapple asked.
NHRMC, which makes more than a billion dollars in annual operating revenue and has at least a billion dollars in assets, is currently owned by the county but operates independently as a nonprofit through a commissioner-appointed NHRMC Board of Trustees. According to President Gizdic, in the 52 years the county has owned the hospital, it has become the largest county-owned health system in the U.S. that receives no local tax support.
Zapple said NHRMC has reserves of over $650 million and is on track to earn $90 million on operating surplus this year. With a 78-percent share of the seven-county region that it serves, he argued the hospital’s market share would only continue to increase.
“Keeping local control means the focus of the hospital will be on meeting the needs of our community, not on the bottom line of a distant corporation,” Zapple said. “In every other reported sale or larger merger of hospitals across the nation, the end result is always the same: increased costs to the consumer and a decrease in the quality of healthcare.”
Zapple asked for an amendment to include a minimum 12-month waiting period, starting with the passage of Monday’s resolution, before any final vote is made. Chairman Barfield seconded the motion, which failed to get a necessary third vote.
Barfield asked why a program that has been devised to give the hospital the ability to borrow outside the county to fund construction — he said the current lease agreement prohibits them from doing so — was overlooked in favor of the RFP process.
“So to prohibit another entity from coming in and taking the low-hanging fruit, we had this document prepared — it’s in my inbox, it’s on my desk — giving them that ability. But somehow this document got pushed to the side and we’re having this conversation now,” Barfield said.
Fiduciary responsibility
Commissioner White said conspiracies suggesting the deal was already done through some “nefarious intent” and behind-the-scenes agreements was an outrage and an insult.
“Because if there’s any evidence of that, I suggest my fellow commissioner and our state senator today who recklessly filed some complaint, should come forward and present any evidence of any backroom deals — conversations, emails, text messages, clandestine meetings (which is a word that has been used) — bring it forward. Show it to the police, to the [State Bureau of Investigation],” White said.
Earlier Monday, North Carolina Senator Harper Peterson filed a complaint against the New Hanover County Commission for its “failure to fully inform and openly engage” county residents in the decision-making process of the potential sale, a process that he said had become corrupted.
Commissioner Kusek said her support for the resolution was based on the county’s “fiduciary responsibility to taxpayers of the county,” although she had not made a decision whether the hospital should be sold or not.
“I don’t have enough information to make that decision,” Kusek said. “But how could any reasonable person not want to investigate and research and evaluate the expert information that gives us the ability to make informed decisions?”
She said the resolution was made with the goal of increasing accessibility, services, and the quality of healthcare “regardless of who owns the hospital.” The changing landscape of the healthcare industry, she warned, could shift the financial burden to the county’s taxpayers in the next decade without a deal.
Kusek also echoed White’s view that no agreements were being made behind closed doors.
“All proposals will be made in public in detail,” Kusek said. “There are no secrets or behind the scenes deals. What’s the right destiny for the hospital? Is it a strategic partner? Is it a management agreement? Do we turn the hospital into an authority and let it buy itself back from the county over a period of time? Again, we don’t know the answers, but I look forward to exploring what those studies might bring.”
Mark Darrough can be reached at [email protected] or (970) 413-3815
