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Leaders Reflect On One-year Anniversary Of Novant, NHRMC Sale Closing

By Johanna F. Still, posted Feb 1, 2022
On the one-year anniversary of the multi-billion-dollar sale closing, Novant Health installed new signage in front of its flagship campus on 17th Street. (Photo courtesy Novant Health New Hanover Regional Medical Center)
The multibillion sale of then-county-owned New Hanover Regional Medical Center to Novant Health closed Feb. 1, 2021, following state approval of the acquisition. On the one-year anniversary of the purchase closing, hospital leaders unveiled new building names, Novant signage and reflected on the year’s activities.

To start, New Hanover Regional Medical Center is now officially Novant Health New Hanover Regional Medical Center, though the longer name had been in circulation in some uses in recent months. The hospital’s other properties all also now include a “Novant Health” before each name. In the coming months, about 300 signs and 200 vehicles will get updated with Novant’s purple branding – one of the last steps remaining in the external branding merger activities.

“The initial transition period is really coming to an end, and our goal really is to transition from integration to business as usual,” John Gizdic, former NHRMC president and CEO and now Novant Health executive vice president and chief business development officer, said in a Tuesday morning virtual press conference.

“Now hopefully we can get back to just focusing on taking care of patients, versus integrating and taking care of patients,” Gizdic said.

This summer, the hospital will launch a unified website; at that point, all components of the merger will be complete, Gizdic said.

In its first year, the local health system implemented Novant Health’s charity care guidelines, offering the benefit to patients who fall under 300% of the federal poverty level, up from 200% of the federal poverty level under NHRMC’s former policy.

Novant Health announced a $40 million investment last week toward all of its team members (the system employs roughly 36,800 across the Carolinas and Virginia). The reward gave full-time employees the option of one week of paid time off or an equivalent cash bonus.

“That would not have happened,” Gizdic said, if not for the acquisition. Ongoing capital projects also “at a minimum would have been delayed, if not really, put on the shelf,” he said.

Over the past year, Novant Health has committed $300 million in capital expenses for its coastal  regional market. This figure covers big-ticket items including the 66-bed community hospital in Scotts Hill, a neurosciences tower and two medical office buildings in Brunswick County.

As part of the sale, Novant agreed to spend no less than $600 million during a 10-year period following the sale closing to fund “commercially reasonable routine capital expenditures of the healthcare business,” according to the asset purchase agreement approved by New Hanover County commissioners in October (the duration could be extended another five years if necessary).

The system also agreed to spend at least $2.5 billion in capital expenditures to implement all projects identified in NHRCM’s strategic plan (which was never released publicly in its entirety, as much of it was deemed confidential). These projects should be scheduled to be complete within five years of closing consistent with dates set in the strategic plan, according to the purchase agreement. 

The $3.1 billion was committed in addition to the $1.25 billion share transferred to the New Hanover Community Endowment Inc. from the sale. Gizdic said Novant is contemplating a 10 to 12-year timeline on the $3.1 billion in combined expenditures. “We're already significantly investing and starting to make sure we make those capital investments to meet the growth and needs of the community,” he said.

In Scotts Hill, design work is underway for a new community hospital with an orthopedic focus. The hospital will provide OB/GYN and general surgery services there, and is seeking state approval to purchase a linear accelerator (used for radiation treatment), a nearly $23 million expense. The equipment with allow Novant to increase its “cancer presence” in the Hampstead area, according to Shelbourn Stevens, president of Novant Health New Hanover Regional Medical Center and the Novant Health coastal region.

The orthopedic campus on Wrightsville Avenue will close once Scotts Hill becomes operational, but Stevens said Novant still hasn’t decided what to do with the building. “We’re still working on that plan,” he said.

Novant Health NHRMC is planning to invest nearly $3 million in cardiac catheterization equipment and $3.4 million to acquire a bi-plane system (an advanced medical imaging technology), according to state records.

In Brunswick County, Novant plans to open two medical offices: one 30,000-square-foot space in Shallotte and one 35,000-square foot building set to open this month at its campus in Bolivia.

Work is underway on two medical clinics made possible by a $10 million gift from Michael Jordan.

The partnership with Novant has allowed Novant Health NHRMC to implement Viz.ai, a technology that helps speed up the time between stroke patients getting on operating tables. “Through this technology, we are able to shave life-saving minutes off of our stroke care,” Gizdic said.
Recognizing a need for pediatric specialty services, Novant is recruiting seven new physicians, according to Gizdic.

By the end of the year, Novant Health NHRMC’s Neurosciences Institute tower is expected to open. The 180-bed facility includes a dedicated comprehensive stroke center, dedicated neurological operating rooms and interventional suites, Gizdic said. “This will be a state-of-the-art destination for our entire region,” he said.

“The foresight to pursue this partnership and what we've been able to accomplish in this first year is truly a testament to the vision of ensuring our community has the resources it needs now and in the future,” Gizdic said.

Stay tuned for this week's BizTalk on Thursday at noon featuring an interview with Stevens and Laurie Whalin, president and chief operating officer of Novant Health Brunswick Medical Center. The talk will be streamed live on the Greater Wilmington Business Journal's Facebook page.
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