State treasurer, nurses: hospital putting profit over patients

State treasurer, nurses: hospital putting profit over patients
Published: Sep. 22, 2022 at 10:09 AM EDT
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WILMINGTON, N.C. (WECT) - They are very powerful people. Nurses are scared to publicly question them. Doctors worry about losing their hospital privileges if they speak out against hospital administrators. But North Carolina State Treasurer Dale Folwell isn’t backing down when it comes to challenging the executives in charge of the state’s largest hospital systems. He has called the hospitals “cartels...disguising themselves as nonprofits” while their CEOs rake in millions of dollars a year.

During the pandemic, while taking $1.5 billion in bailouts from taxpayers, the wealthiest hospital systems in the state enjoyed record-breaking profits. Meanwhile, patients languished in Emergency Department waiting rooms. Patients at Novant Health New Hanover Regional Medical Center contacted the WECT newsroom with story after story of excessive wait times despite dire medical conditions. Nurses quit in frustration, burned out from long hours and a lack of resources to do their jobs effectively.

Then, in June, a 77-year-old cancer patient coded in the hospital’s Emergency Room lobby after waiting over 5 hours for care. Doctors were able to reestablish a pulse, but the patient died later that day. That incident appears to have prompted a week-long visit from state health inspectors. They discovered a number of issues that jeopardized patient safety, and the Centers for Medicare and Medicaid Services notified NHRMC that their Medicare contract would be terminated in August.

Hospital officials blame a severe nursing shortage for most of the patient safety issues. After announcing just months earlier they were reducing their reliance on travel nurses due to the cost, Novant officials reversed course. They went on a hiring spree, approving increased pay rates and other incentives for travel nurses. Wilmington hospital administrators proceeded to hire hundreds of nurses, most of them travelers, to help fill the roughly 400 open nursing positions at the hospital.

While the new hires took Novant Health NHRMC out of Immediate Jeopardy status with federal regulators, and their Medicare contract is secure for now, WECT continues to hear concerns about Novant’s ability to provide adequate care to the hundreds of thousands of people who rely on Wilmington’s only hospital.

“Every single one of your viewers knows that something is wrong,” Folwell said of the state of healthcare in Wilmington.

Empty beds because of nursing shortage

Patients have routinely reported waiting five to eight hours or more to be seen in the Novant Health New Hanover Regional Medical Center Emergency Room. Many others have waited days for a hospital room to become available once doctors deem they need to be admitted. But public records from the Department of Health and Human Services show a third of the beds at the 17th Street hospital were empty in June. When the numbers were updated in August, the percentage of empty inpatient beds had dropped slightly to 28%. Hospital officials say they’ve had to keep some of their beds empty due to a lack of nurses to staff them.

Cindy Bode has been working as a nurse since 2000 and worked for New Hanover Regional Medical Center until December, when she’d had enough as a full-time Novant employee. She says nurses are quitting their jobs across the country, and the issues are not isolated to Wilmington or Novant.

“I don’t want to do patient care anymore, because the joy that I used to have is not there anymore,” Bode said. “The love and the passion I had to go to work every day is not there anymore because being beat by management, not enough staffing and just working hard all the time. All those things just wear you down after a while.”

Bode thinks the huge discrepancy in pay between the top executives in the hospital industry and front-line workers is a big reason why people are leaving the field of nursing. She also faulted the unreasonable demands she says managers make on a routine basis.

“So they just want to add on and add on... and then you get tired of having to stay late,” Bode explained. “Never being asked, ‘Can you stay late? You know, just today.’ After a while, it happens every day and you get sick of it. You have a family, you can’t even make a phone call and let them know, ‘I’m going to be late. I can’t pick up my kid at preschool.’ What are you supposed to do? You know, so there comes a point where you need your money, but you can’t take it.”

A recent ownership change at NHRMC also left staff frustrated. While the hourly pay rate for employees increased in some cases after Novant bought the hospital from New Hanover County, benefits got worse. Hospital employees used to get pensions, but they don’t from Novant. Employees have also complained that Novant’s health insurance through Cigna left them with no in-network provider options in Wilmington for many different medical specialties, including pediatrics and dermatology. That has significantly increased employees’ out-of-pocket expenses.

These issues, in addition to industry-wide burnout in the wake of COVID-19, help explain why there has been a 32% employee turnover rate at NHRMC in the last year.

“Hospitals are really trying to accomplish quality care with less staff, and really less experienced staff. Because a lot of the people we have lost have been those experienced nurses that have been traveling,” NHRMC’s Chief Clinical Officer Dr. West Paul said during an August news briefing as the hospital explained why it was in jeopardy of losing its Medicare license.

As more nurses leave, the pressure mounts on those who are left to care for the never-ending influx of patients. Even with the new traveling nurses and the 117 nursing graduates who recently started at NHRMC, Bode says if the fundamental issues are not addressed, it’s just a matter of time before they too begin to burn out and leave.

“You want to help people,” Bode says of the type of person who enters the health care profession. “So think about if you are a caretaker, as a nurse, and you can’t help someone because you don’t have the resources, meaning you don’t have enough staff or you don’t have enough supplies. You start to feel bad about that. And that becomes like a demoralizing situation. So after a while, the stress does get to your brain... It’s just the combination of things adding, and adding, and adding... and then finally you’re like, ‘I’m choking, I can’t breathe because I don’t have what I need to do my job.’”

A “frightening” situation for patients

Patients are left in the lurch. John Bridges needed emergency medical attention recently after his stitches failed following surgery. He was experiencing a significant gastro-intestinal bleed, and was advised by his surgeon to go to the NHRMC Emergency Room immediately.

“I said, ‘I had surgery, I’m actively bleeding.’ And [they were] just kind of like, ‘Okay, go have a seat,’” Bridges said of the flat response he got from the staff at the ER check-in desk when he went for help. “I waited about three hours before I got taken into the back to be seen. And at that time, when the nurse is trying to draw my blood, I don’t really have a lot. It’s not coming out, there’s like really no blood pressure to speak of. I passed out in the chair, but not from having my blood drawn, just from lack of blood. And I asked to use the restroom after that time when I came to. And they let me go to the restroom by myself... When I came out of the bathroom, the doctor was there to see me. And I had him come and I showed him the blood [in the bathroom]. And suddenly, he took things very seriously, but it required sort of that proof.”

“This is what had been going on while I’d been there for three hours in the waiting room. As you know, telling people this was happening, but until somebody saw the physical evidence, I was sort of trying to maintain a certain amount of dignity. You know, personal dignity in the waiting room, not wanting to make a mess or cause a scene. Everybody there is going through some things. I guess in the future, maybe I would be less modest and more active if it required bleeding, showing some blood,” Bridges said.

Bridges said the first situation was so frightening that he hopes he doesn’t have to go back.

Lack of Transparency

When the county sold the hospital for $1.5 billion despite community outcry, information that used to be a matter of public record became harder to come by. Novant, the not-for-profit organization based out of Winston-Salem that bought NHRMC, initially declined to provide basic information for this story, like average ER wait times.

The data that is publicly available from the Centers for Medicare & Medicaid Services is dated, showing average emergency department wait times from January 7, 2020, to March 31, 2021. That captures just two months of data after Novant took ownership of NHRMC. According to those numbers, the average wait time in NHRMC ED, from the time a patient checks in to the time they leave, was 139 minutes. That was 18 minutes faster than the 157-minute average wait time for hospitals in the state of North Carolina. But it takes longer to be seen in a North Carolina ED than in 37 other states across the country.

After WECT found out - through a tip from a viewer - that federal regulators were threatening to terminate NHRMC’s contract with Medicare, the hospital started providing some information it had previously refused to disclose. That may be at least in part because federal regulators released data about the hospital that proved patients were waiting for extended periods of time.

The report stated that as a matter of course, paramedics bringing patients to the hospital were supposed to be able to transfer their patients to emergency room staff within 30 minutes of arrival. However, in actuality, paramedics were waiting up to ten hours. Federal regulators said at one point, as many as 13 ambulances were lined up outside the hospital waiting to offload patients.

The hospital is still not releasing raw data, but Christy Spivey, Senior Director of Nursing for Novant Health’s Coastal Region, reports that currently, NHRMC’s “median time for getting EMS in and back out is 30 minutes or less.” That’s down from 80 minutes in June. That does not include wait times for people who drove themselves to the hospital and walked into the lobby for help. Still, the hospital shared that overall wait times have improved, and the percentage of patients leaving in frustration without ever being seen was down to 3% in August, compared to 11% in June.

“I think what’s key is that we’ve really adopted a team approach that allows patients to get seen and care started no matter where they are, be that the lobby or when a patient is offloaded from EMS,” Dr. De Winter, Medical Director for NHRMC’s 17th Street’s Emergency Department said. “We’re able to take care of them very soon after they enter the door.”


State Treasurer Dale Folwell says the notion that many of the large hospital systems in North Carolina are not making a profit is laughable.

“The multimillionaires [were] laughing all the way to the bank when this transaction got approved,” Folwell said of NHRMC’s sale to Novant.

Folwell said as a not-for-profit organization, Novant was eligible to borrow money for the hospital purchase at a low-interest rate loan through the state treasurer’s office, but opted to pay a higher interest rate through an outside lender to avoid state oversight.

“At the end of the day, these multibillion-dollar corporations are operating, disguising themselves as nonprofits,” Folwell said. “Why should your viewers care about that? Because they don’t pay income tax. They don’t pay sales tax. They don’t pay property tax.”

“The fact is, the reason there may be wait times, is they control the supply of healthcare. They want to control the supply of health care. They don’t care about the wait times in the emergency rooms,” Folwell said, noting that hospitals make more money when fewer nurses take on large patient loads. “There’s absolutely no accountability to make sure that the tax benefits that these ‘nonprofits’ get is nearly equal to their charity care.”

According to a report commissioned by the state treasurer and conducted by National Academy for State Health Policy, and peer-reviewed by researchers at Johns Hopkins University, North Carolina hospitals, including Novant, are making more money than ever before.

“Novant Health thrived financially during the pandemic....” the report reads. “Among North Carolina hospitals, Novant Health received the second largest payout of federal taxpayer dollars,” the report reads, noting $261.4 million in COVID relief payments, and another $373.7 million in “MAP” money [funds from the Medicaid Services’ Accelerated and Advanced Payment Program which allows eligible health care facilities to request up to six months of advance Medicare payments for acute care hospitals or up to three months of advance Medicare payments for other health care providers]. “Novant Health recorded a net profit of $812 million in 2021, compared to the annual average of $377 million from 2016 to 2019.”

“Despite Novant’s huge windfall in cash and investments in 2020, its charity care did not keep pace,” the report states. “The pandemic threw hundreds of thousands of North Carolinians out of work, but Novant’s charity care spending rose by just $57.5 million from 2019 to 2020 across the system’s 10 hospitals. That equals only 6% of the system’s $921.4 million growing in cash and investments during the same time period.”

While the 2020 numbers looked lucrative, NHRMC executives say they’ve lost money this year, in large part because of the overtime rates they have had to pay their remaining nurses, and because the high cost to retain traveling nurses.

According to a 2020 published report on executive compensation, 13 administrators at the not-for-profit Novant Health were making over a million dollars a year, with CEO Carl Amato receiving $3.6 million. Another 20 people with the company were making more than half a million dollars a year. Amato’s salary exceeds or rivals that of CEOs for some publicly traded health care systems, although it’s still far behind the $30.4 million salary of Samuel Hazen, the CEO of HCA Healthcare which owns the Mission hospital system in Asheville. That is a for-profit company.

Wilmington, Greensboro, and Durham ranked in the top five “most monopolistic cities in the nation for health care” over the last decade. It’s perhaps not surprising that North Carolina also ranks as one of the least affordable states to obtain healthcare.

The way out

While over a dozen nurses have reached out to express concerns to WECT, Bode was the only one willing to speak publicly.

“I think people are honestly just afraid to talk because they think they will lose their job,” Bode said. “And that very well may happen. Even if they’re short staffed there would find some way. Not say, ‘You went on camera, and we’re gonna fire you.’ But they find some other little reason to let you go or make your life unhappy enough that you’re like, I can’t take it anymore. And you quit.”

“I did work for Novant... I’m not worried about not being able to get the job in the future,” Bode said. “I’m not spewing lies, I’m just telling you the truth. And people, that’s just what’s really happening. You know, it’s always been like that. It’s getting worse.”

Treasurer Folwell said to get to the other side of this mess, people need to keep talking.

“The wheels are starting to come off of health care in the Greater New Hanover area,” Folwell said. “And you know, to the top multimillion-dollar executes at these organizations, I don’t care what they do. Pick up a broom, pick up a bedpan. Come down here and fully understand what’s happened under your leadership to health care before this transaction has its second birthday.”

On a larger level, Folwell would like to see North Carolina follow the lead of other states, and more closely regulate how much charity care non-profits be required to provide to patients in exchange for not having to pay taxes. North Carolina does not currently require a minimum threshold for charity care spending. Alternatively, he said hospitals could return their COVID relief dollars to taxpayers.

Novant executives took issue with many of Folwell’s comments. For their reaction to his concerns and others, click here.

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