WILMINGTON, N.C. (WECT) - We’ve told you cautionary tales involving hospital mergers and acquisitions around the state, as the county considers the possible sale or partnership for New Hanover Regional Medical Center. But locally, there is an example of a smooth transition from one hospital system to another.
The circumstances were different when Novant Health took over Brunswick Community Hospital back in 2006. Brunswick County owned the hospital, but it was managed by an outside, for-profit system called HCA.
“They weren’t doing a very good job managing the hospital, they were actually putting, I think, profit before patient care. And so a number of physicians got together and decided that a change needed to be made for the good of the county and the people in the county,” surgeon Mark Tillotson told WECT, adding that at the time Brunswick Community Hospital was “failing.”
Dr. Tillotson was active in the lobbying efforts to break away from HCA, and said he and other physicians helped convince board members of HCA, and most importantly, the county commissioners who controlled the ownership of the hospital, of the need for a change. The county transferred ownership of Brunswick Community Hospital to Novant Health, in exchange for the company’s commitment to build a new, modern hospital for the county.
“The facility was older and it was outdated and had not been maintained. They were semi-private rooms. So everyone wants their own privacy, and we did an assessment, could we add onto that building, and we really just came to the conclusion we need to start fresh with a brand new facility. And that’s what we built here and it was $107 million investment for Novant Health,” hospital president Shelbourn Stevens said. Stevens began working for Novant Health 30 years ago, starting out as a respiratory therapist at one of their other hospital campuses, and worked his way up through the leadership ranks.
The company not only improved the facilities, but also significantly expanded hospital services in Brunswick County.
“Clearly here this was an excellent choice for us,” Dr. Tillotson said. “Since Novant Health has been here we’ve ever tripled the physician staff, the number of services we have, services we didn’t have before. Neurosurgery, vascular surgery, invasive vascular surgery, neurologists, psychiatrists. We have a number of different kinds of services that weren’t available before.”
Bill Sue, a long-time and now retired Brunswick County Commissioner who was involved in the sale, agreed this week that Novant has been a “great fit” for Brunswick County. He said at the time they made the transition, the amount of money it was going to take to build a new hospital, and the resources and population they had to do that with made the proposition unfeasible for the county.
Stevens said Novant’s extensive resources helped bring new services to Brunswick County. Novant Health has about 30,000 employees and 15 hospitals across four states, including Forsyth Medical Center in Winston-Salem and Presbyterian Medical Center in Charlotte. They also help operate the UVA Health System in Virginia.
Novant also has a partnership with New Hanover Regional Medical Center, which keeps one of its AirLink helicopter and flight crew stationed at the hospital in Bolivia to get patients with critical injuries or a complicated medical issue to NHRMC or another trauma center more quickly.
Non-profit or not, the hospital industry is still big business, with many well-compensated executives. According to the company’s 2016 990 forms, the most recent financial documents publicly available through Guidestar.org, Novant’s CEO Carl Armato made $3.3 million dollars in total compensation that year. Seven other top executives made over a million dollars, and 22 more made over a half million dollars that year in reportable compensation. Guidestar lists the company’s assets at $4.2 billion and it’s gross receipts for 2016 at $2.6 billion.
While NHRMC is not facing the dire issues Brunswick Community Hospital was in 2006, if New Hanover County leaders decide a change in ownership or management is necessary, officials at Novant’s Brunswick campus say they need to choose carefully.
“Part of the transition was very scary for a number of people, for example the staff was concerned with would they still have their jobs, would they still have their [retirement benefits], and what were their situations be,” Dr. Tillotson remembered. Brunswick County considered offers from four hospital groups before selecting Novant as the best fit. The county declined proposals from Community Health Systems, Essent Healthcare, and Carolinas Healthcare Systems (now Atrium Health).
“Our transition was absolutely necessary for the people in the county. And probably one of the reasons why you don’t hear much about Novant Health is because quite honestly they came in and did an excellent job in terms of the transition,” Tillotson added.
“It’s really learning the culture of the facility that may be coming on board,” Stevens said of how they accomplished the smooth transition. “Every facility has its own unique culture and then we have to take time, you can’t change that culture overnight. The old community hospital had a for-profit culture. And we’re not-for-profit so the mindset is different. We focus on patients and quality and safety first. And we know will focus on finances at the end.”
While he had nothing but positive things to say about Novant Health’s takeover of Brunswick Community Hospital, former Commissioner Sue remained unconvinced that changing ownership was a good idea for neighboring New Hanover.
“If I were a commissioner in New Hanover County, I would not vote to sell that hospital. I think it’s a definite asset to the county. That’s an ex-politician’s opinion. The circumstances are different,” Sue said, emphasizing NHRMC’s current financial health and modern facilities. He added that he enjoyed excellent care at NHRMC last year when he underwent open heart surgery.
When asked for comment on Thursday to the reflections from those involved in the Brunswick Community Hospital sale, NHRMC provided the following statement:
“NHRMC and New Hanover County have committed to proactively exploring ways to ensure the quality of the care continues to improve and the organization doesn’t go through any period of decline while adjusting to changes in the industry and cuts to reimbursements. The best path may or may not involve a sale. The Partnership Advisory Group selected to make a recommendation will thoroughly explore all options.”
New Hanover County is currently developing requests for proposals for the potential sale or partnership for NHRMC. They expect the process to take at least a year and several commissioners have said they are not committed to selling the hospital if they don’t think it makes sense at the end of this process. Novant is one of several outside hospital systems that have said they are following the potential sale with interest in potentially expanding their footprint in Southeastern North Carolina.