County, hospital officials pitch business leaders on proposed hospital sale

Updated: Aug. 1, 2019 at 2:24 PM EDT
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NEW HANOVER COUNTY, N.C. (WECT) - Hospital and county officials are making their pitch, now trying to convince local business leaders why New Hanover County should explore the possibility of selling the hospital to a private company.

With over 7,000 employees in the hospital system, New Hanover Regional Medical Center is by far the biggest employer in this area. Officials recognize there is anxiety about the proposed sale and what that could mean for employees, providers and patients.

At a meeting at the Wilmington Chamber of Commerce Thursday morning, New Hanover Regional CEO John Gizdic and County Manager Chris Coudriet explained to business leaders and elected officials in attendance they thought the need to eventually sell the hospital was “inevitable.” They said the amount of money it’s going to take to expand the hospital for population growth, and the limited leverage NHRMC has negotiating as an independent hospital are the main reasons they want to explore the possibility of selling.

“We would be profitable into the future…. I don’t know if that’s 3 years, 5 years, 10 years, so [I’m] not saying we are going to close the doors at all, it’s really about having enough of a profit to make the investments that are needed to secure the future of healthcare in our community,” Gizdic told WECT. He emphasized that the hospital’s current financial health puts the county in a strong position to negotiate now, rather than waiting for a point down the road when we might have experienced a “downward trend.”

Former NHRMC CEO Jack Barto was in attendance at the chamber meeting. He said if hospital and county leaders waited until a time when New Hanover County was negotiating from a position of weakness it would “almost be ignoring fiduciary responsibility.”

Gidzic cited the desire to build a cardiovascular center and expand facilities in Scotts Hill and Pender County as examples of the kind of capital improvements they’d like to make to meet the needs of the region’s growing population. He estimated that it would cost $1 billion over the next couple of decades to make the kind of expansions to keep NHRMC as a top quality provider, and said that would be difficult to do under the current ownership model.

The sale of the hospital would certainly bring a huge infusion of cash to New Hanover County, which could be used to pay down county debt or build schools. But Coudriet said he was also familiar with concerns that the real driving force behind this proposed sale was top hospital executives hoping to personally benefit from a takeover by a private healthcare company. He said those concerns are unfounded.

“That is not at all a part of the equation,” Coudriet said. “I can assure the viewers, the readers of the story, there are no negotiations in place that if a deal is ultimately structured and agreed to that there are benefits and buyouts and compensation. That is factually not true.”

Gidzic echoed Coudriet’s assurances.

“As far as me and my executive team, I can speak for myself. I am committed to this organization and to this community. I have been here for 15 years. I’ve raised my family here, this is home to my twin boys. I don’t plan on going anywhere," he said. "So I want to be here and receive my healthcare here. This is not an opportunity for any of us to try to leave this market or try to get a job at a bigger system or something like that. It is trying to make sure that we do what’s best for this organization and this community.”

Officials say retired hospital employees, and employees who have worked at the hospital long enough to be vested would continue to receive their pension as part of any negotiated sale. They also said that the hospital would continue to provide care to patients who cannot afford to pay, as hospitals are required to do by statute. While NHRMC estimates it will provide $200 million in uncompensated care this year, Gizdic said larger healthcare networks may be in a financial position to provide even more indigent care.

Officials plan to hold public forums on August 19-20 to answer questions about a potential sale. Coudriet says he hopes those forums will focus more on what the public would like to see in a potentially privatized hospital moving forward, rather than whether or not to even explore the possibility of a sale. They could then use that public feedback to develop a request for proposals to send out to potential buyers. Coudriet says the process will continue to be transparent.

“The process really does not allow confidentiality. Every proposal — assuming the board goes forward — every proposal that comes forward has to be put into the public space for inspection. There will be hearings, so every facet of every proposal will be made public,” Coudriet said. He added that if they decide to move forward with a particular buyer, negotiations after the initial written offer and before final contract might be done behind closed doors, but the public would be privy to any and all formal contracts.

If commissioners decide on September 3 to explore the sale of the hospital, that does not mean they are under any obligation to sell if the offers they receive to buy the hospital are not attractive. Officials say because the region is a growing market and the current financials of the hospital are solid, they expect they would receive multiple offers if this process gets that far.

Natalie English, CEO of the Chamber of Commerce, said chamber members will decide whether to formally endorse the proposal of exploring a hospital sale, if they feel it is in the best interest of the business community.

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