NEW HANOVER COUNTY — New Hanover County Commissioners voted 4-1 to sell its community-owned hospital to Novant Health in a multi-billion dollar deal inked Monday.
The expected vote came after supporters and protesters of the sale, holding signs for opposite causes, lined either side of Princess Street as cars honked horns and the county prepared to partake in one of the largest transfers of wealth the state has ever seen.
Related: Deep dive series: The multi-billion-dollar hospital vote [Free]
Proceeds from the sale will transfer $300 million for a revenue stabilization fund, and $50 million for a mental and behavioral health fund to New Hanover County; $200 million to an employee transition fund and $100 million to cover any remaining obligations related to the sale to NHRMC; and $1.25 billion to a new private community foundation, the non-profit New Hanover Community Endowment formed upon the sale approval.
As news of the vote reached sale supporters — all donning New Hanover Regional Medical Center and Novant Health gear — an eruption of cheers could be heard from inside the historic county courthouse, where county manager Chris Coudriet and Commissioner Woody White peeked through blinds to catch a glimpse of the crowd.
After signing the paperwork alongside the hospitals’ CEOs, Chair Julia Olson-Boseman reflected on the year-long path the board’s majority took to reach this point.
“We fulfilled our duty, I think, better than any three commissioners have ever done in the history — except for those ones that maybe built the hospital,” she said. “But I think this is just as big if not a bigger decision than that, and I’m really proud to be standing here today representing all of these people in New Hanover County.”
Olson-Boseman’s nod to fellow commissioners references a majority of the board — including herself, Commissioner Pat Kusek, and Commissioner White — who have supported the idea of the sale from the beginning. Though Commissioner Jonathan Barfield originally voted against the intent to sell resolution last year, he said he had since warmed up to the idea, and voted in favor of transaction Monday.
Addressing rumors and false allegations that surround those in favor of the sale, Kusek spoke of fractured friendships, sleepless nights, and stomach ulcers incurred over the past year. “I’m guilty,” she said “I’m guilty of wanting the best path forward for healthcare in our region — today and in the future. And I’m guilty of insisting that we protect $1.2 billion for the transformation that it will provide for this community for generations to come.
“And yes, I’ll benefit financially from this transaction just like every one of you; each and every person who lives here in this county now or who’s going to come here to live in the future through borrowing less money, paying for programs as we need them, paying less taxes and having perhaps one of the top credit ratings of any county in the whole United States,” Kusek added.
In his closing reflections, Commissioner White spoke of his time as an attorney, assisting people during their worst moments. “We try to change lives one person at a time and oftentimes we do that. But I have never made a decision that will change so many lives all at once.”
From referendum to county vote
New Hanover County voters approved a bond via a referendum to build the hospital, which first opened in 1967. Now, through the approval of a majority of a bipartisan board, it has been sold to the non-profit Novant Health, solidifying an even more dominant presence in southeastern, N.C., with little competition remaining.
Supporters of the sale – including a unanimous recommendation from the Partnership Advisory Group and a 16-1 approval from the hospital’s board of trustees – have put forth the message that without a cash infusion, NHRMC will fall behind.
As a county-owned hospital, NHRMC can’t issue debt outside county lines. In the six decades since it was built, the county’s population has nearly tripled while growth in outlying regions has exploded. Healthcare leaders say the county’s original model now no longer adequately serves the fast-growing region and neighboring counties that depend on NHRMC’s network deserve better.
“We’ve grown exponentially and we can’t keep up,” Mary Ellen Bonczek, NHRMC’s 20-year chief nurse executive, said outside the courthouse.
“We really need something robust to be able to carry us into these areas and get people the care they need,” she said. “So for me, it’s all about my nurses being able to deliver safe care in the environment where the patient is. We just can’t do it by ourselves anymore.”
NHRMC executive vice president Dr. Phillip Brown said the sale was the most magnificent local healthcare event since the opening of the hospital and the “best thing that’s ever happened” for healthcare in the entire region. “It’s really that big of a deal,” he said.
Funds funneled into the new community foundation will help dismantle health inequities that plague the region, Brown said.
“I think people have been skeptical that the proceeds would be used for good,” he said. “But the truth is I think we have to trust people to do the right thing. And, when you have a multi-member board, I think they will do the right thing. Those funds are dedicated, consistent with the strategic plan of the county, so they’re going to go and do good things. To me that’s exciting.”
Vote no, go slow
For all the enthusiasm outside the courthouse came an equal amount of skepticism. In a protest organized by Save Our Hospital, those against the sale held signs that suggested the deal stunk, questioned the need for the hospital’s extensive public relations efforts to sell the sale to the public, and called for the attorney general to weigh in.
The local non-profit opposed to the sale unsuccessfully attempted to delay Monday’s vote late last month by suing the county for alleged public records violations. Alex Hall, the group’s attorney, spoke to supporters from the steps of Thalian Hall and questioned key aspects and reasons behind the sale.
“They named it a partnership to make the bad medicine go down better,” he said.
At the gathering, Senator Harper Peterson asked aides to hand out envelopes filled with instructions on how to contact the AG’s office. After having written a letter to the AG last year asking to initiate a formal complaint against the county for alleged malfeasance and corruption, Peterson maintained last week he still stands by his statements.
Peterson said he fully expects the AG to uncover evidence of criminal activity.
Dr. Kyle Horton, a democratic candidate for the county board of commissioners, said she was heartbroken by many aspects of the sale, especially the timing. Because an outgoing and divided board chose to vote on the multi-billion dollar sale — just weeks before early going begins — any future commission would have to pony up $25 million to attempt to undo the deal.
“In 2018, when we elected this recent slate of commissioners, no one knew to ask them about healthcare,” she said. “And here we are at this pivotal moment at the future of healthcare with the pandemic, and they’re barreling forward without any accountability to the taxpayers or the citizens.”
As a physician, Horton said she’s seen firsthand what patient quotas and other impacts from mergers and acquisitions have done to practices. She, like many opposed to the sale, said she’s concerned the cost of healthcare will rise while the quality of care will go down.
The vote
As expected, Commissioner Rob Zapple cast the lone dissenting vote to the sale. At the beginning of the item, Zapple attempted to separate the vote to approve the community foundation bylaws from the other actions related to the sale.
His motion to separate the items was seconded by Commissioner Barfield, but his attempt to discuss the item was thwarted when Olson-Boseman asked the board to call the motion to question — a parliamentary move that effectively shuts off debate on an item. Commissioner White called the item to question and the motion failed.
After the meeting, Barfield said he wouldn’t have voted in favor of the motion should it have passed but he wanted Zapple to have the opportunity to speak his piece.
Zapple said he was disappointed he couldn’t discuss the item. “I don’t know if I would have changed minds or not but I sure as heck would have given it a try,” he said in an interview.
Assuaged by the recent verbal promises of Novant CEO Carl Armato, Zapple told the board in his remarks that he was prepared to vote in favor of the sale itself, calling it a “good deal.” Armato promised Zapple the educational partnership with UNC Health would begin on a “near-term timeframe,” despite the lack of definitive language in the agreement outlining when the program would start.
Still, Zapple remained unconvinced that infusing a private community foundation with the public’s money was a responsible idea. Having been handed updated bylaws, tweaked with substantive changes after the public’s last opportunity to provide comment on the sale, Zapple said he couldn’t accept them as currently proposed.
“The public has not had 10 days to review these documents, yet the content of these bylaws will establish the most powerful foundation and board of directors in southeastern North Carolina,” he said. “Like this entire process, the bylaws are being rushed, and I am sure that the public is not fully aware that, as written, they will result in a massive transfer of wealth from the public to a privately controlled foundation.”
Zapple said he could only hope the AG was paying attention (this statement appeared to elicit an eyeroll from Commissioner White, who has adamantly denied any wrongdoing and opposed Zapple’s public skepticism of the sale).
“I will not give up on this,” Zapple said in an interview. “That money has got to have media and public eyes on it on a regularly scheduled basis.”
View more photos of the sale below. Click to enlarge and scroll:
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