Selling the possibility of selling New Hanover Regional

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Officials say right time to ask the ‘hard questions’ about the county-owned hospital’s future

WILMINGTON — Jack Barto expected this day to come, when officials would start the public debate on whether New Hanover Regional Medical Center should continue to be an independent, county-run health system.

He just didn’t think it would come so quickly.

“The health care landscape was a heck of a lot clearer then than it is today,” New Hanover Regional’s former CEO, who retired in 2016, said on Thursday.

Echoing comments by current hospital CEO John Gizdic and New Hanover County Manager Chris Coudriet, Barto said the last thing a health system or any business wants to find itself is in a financial bind when your industry is changing around you.

That’s what’s happening now in health care. But Barto said the hospital is in a strong position — both financially and due to the projected growth in and around Wilmington — to enter any negotiations from a position of strength.

“The time is right to ask the question,” he said, adding that it “takes guts” to begin that conversation.

It’s been nearly two weeks since New Hanover County announced it might be ready to get out of the hospital ownership business.

Since then, much of the community conversation — and angst — has been about what might happen to the quality of care and the nearly $200 million worth of uncompensated medical services the hospital provides to the region’s poorest and most vulnerable residents.

Oh, and how to spend any possible financial gain New Hanover County could see from a sale of the hospital, a windfall that could surpass $1 billion.

Growth brings demands

On Thursday, officials spoke before the region’s business community about the proposal. During a presentation before roughly three dozen business and public officials at the Wilmington Chamber of Commerce’s riverfront office, Gizdic and Coudriet reiterated the rationale behind the decision to at least kick the tires on what a change in hospital ownership could mean for health care in Southeastern North Carolina.

With the tri-county Wilmington area expected to grow by nearly 50 percent during the next two decades, Gizdic said health care services will need to grow to meet that increased demand.

“That future requires resources,” Gizdic said. “If that’s the future that we want, how do we get there?”

Coudriet said he didn’t know if the county and hospital would have the deep pockets to take on that much debt to meet the demands for new facilities and expanded services that growth would require. It’s a cost that could easily surpass $1 billion over the next decade, Gizdic said.

Adding a partner, or a new owner, could change that equation.

Numerous officials and health care experts have said they expect New Hanover to attract a lot of interest from other health care systems, both inside and outside of North Carolina, if the county commissioners decide to explore that option.

“Change is difficult,” Gizdic said. “Asking the hard questions isn’t always fun. But if we don’t do that, we’re going to get what happened instead of making something happen.”

‘Staying ahead of the curve’

Wilmington Councilman Paul Lawler asked if there was a sense of “inevitability” that New Hanover Regional wouldn’t be able to continue going it alone as an independent, publicly-run health system.

“I don’t have my crystal ball,” Gizdic responded, adding that the conversation shouldn’t be doom-and-gloom about what might come down the pike and how it could impact the hospital. But he added that these talks were about “staying ahead of the curve” so New Hanover would be in the best position to continue to offer quality health care to the community no matter what changes come along.

Natalie English, president of the Wilmington Chamber, said her members have told her that they support the county and hospital asking the question if this is the right time for an ownership change — even if they don’t know what the right answer is.

What everyone agrees on, she added, is that any decision — even one that maintains the status quo — must not endanger the quality and range of health care services offered by New Hanover Regional.

“It’s one of our top selling points,” English said of having a top-notch health care provider in town.

The chamber has yet to take a position on the possible sale of the hospital.

Avoiding local subsidies

The county intends to hold a pair of public meetings later this month to allow the community to comment on the proposal. The county commissioners are scheduled to consider a “resolution of intent to sell” at their Sept. 3 meeting.

Coudriet said financial realities as much as maintaining and improving the quality and delivery of health care to all of the county’s residents drove the decision to explore a possible sale.

He said New Hanover Regional is the third largest county-owned hospital system in the country. But unlike those larger ones, it doesn’t rely on local taxpayer money to remain solvent.

“We want to avoid that in the future,” Coudriet said.

But how to maintain a first-class health care system that provides access to all while not breaking the bank is what’s prompting the county and hospital to ask the question now.

“We all want a vibrant, financially secure health care system going forward,” Coudriet said. “But how do we get there?”

Barto, the former hospital CEO, said exploring the idea of adding scale, bulking up by joining or partnering with a larger health system made sense in these uncertain times.

“Otherwise, people are going to talk to us last,” he said. “They’re going to talk to the bigger parties first.”

Contact the newsroom at 910-343-2384 or Breakingnews@StarNewsOnline.com.

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