Health Care

Pender County, Novant Officials Discuss Pending Hospital Sale

By Johanna F. Still, posted Jun 21, 2023
Ruth Glaser, president and chief operating officer of Pender Medical Center, county chair Jackie Newton and Novant coastal president Shelbourn Stevens speak at a media event. (Photo by Johanna F. Still)

Pender County officials gathered Wednesday to discuss a recent agreement to hand over Pender Medical Center's ownership to Novant Health.

The pending deal, signified via a signed letter of intent approved by the Pender County Board of Commissioners in a special meeting Friday, is like an engagement. The actual marriage and vows are slated for September, leaving plenty of negotiations still on the table. 

Details surrounding the value of the county-owned hospital, and whether any other financial arrangements will take place surrounding that transaction, are still being worked out. 

“We still have a lot of agreements to hammer out … This is just the initial announcement that we are philosophically aligned at this point,” Pender County Commissioners Chair Jackie Newton said at a press event held at Pender Medical Center.

The not-for-profit health system Novant, which acquired the previously county-owned hospital in New Hanover County in 2021, has been operating Pender Medical Center since that nearly $2 billion sale closed. As part of NHRMC's sale, Novant agreed to take over New Hanover Regional's longtime arrangement to manage the day-to-day operations of the Burgaw hospital, which first opened in 1951. 

Pender County officials originally partnered with New Hanover Regional Medical Center in 1999, and the current operating and lease agreements are set to expire in July.

"This means that our hospital stays in Burgaw – at a time when rural hospitals are struggling," Newton said.

The crux of the letter of intent, which county staff said they could not release publicly, is Novant’s $50 million commitment to improve access to health care services across Pender County and to upgrade Pender Medical Center to a community general hospital. Novant has also pledged to use the funds to recruit specialty care physicians to the county and improve acute and ambulatory facilities.

In recent years officials had flirted with the idea of shopping for new hospital operators other than New Hanover Regional Medical Center and its successor Novant. 

The latest lease agreement deadline – July 17 – for Pender Medical Center quickly approached as Pender County officials sought to formalize a request for proposal bid process by hiring an outside consultant. Wednesday, officials said that deadline didn’t factor into the decision to cement a deal. 

“It looks like all of a sudden we've gone from point A to Z in a back room somewhere, but trust me when I say that the parties, we were working diligently, arduously and sometimes contentiously to get to this point,” Newton said.

Though an RFP was the initial intent behind hiring the consultant, Newton said through negotiations, county officials were able to obtain commitments on a shared vision for the future of health care in the county. 

Unlike in the NHRMC deal, which featured dozens of opportunities for the public to weigh in on a potential sale to six competing bidders, Pender County agreed to move ahead with Novant without any formal opportunity for public comment. 

“There were two statutory paths: We could have gone to market to obtain bids from other health care practitioners. One was an abbreviated [path] that didn't require public [involvement], but then the other was a full blown [path] that had to have public notices and everything else,” Newton said. “To alleviate that, once we got to the point that we knew what we wanted, and Novant committed to giving us that, there was no need to go forward and make the transition more difficult. With the uncertainties of the health care market, we feel confident that we've made a good decision.”

As the deadline approached some county officials last year had at times, aired criticisms of Novant and expressed interest in seeing competing offers. Newton said the board was empowered by a study conducted by its consultant, Ascendient Healthcare Advisors, of health care in the county. Consultants presented the study to the board in closed session in February. 

An abbreviated version of the mostly confidential study shared by county staff features insights including that about three-fourths of hospital admissions are Pender County residents and that Pender Medical Center is one of only two critical access hospitals in the state, and its average daily census of 29.4 “is considerably below the average of 41.3” when compared to counties with a similar population. 

Pender Medical Center is currently a critical access hospital, a rural designation for small facilities with emergency care services. A key component of the pending agreement is Novant’s commitment to transform the rural hospital into a community general hospital in five years. State law describes a community general hospital as a “hospital that provides diagnostic and therapeutic services to patients for a variety of medical conditions, both surgical and nonsurgical, such services being available for use primarily by residents of the community in which it is located.”

Other frameworks of the agreement include spending on the following initiatives, according to a Novant release: 

"• Maintaining Pender Medical Center’s status as a critical access hospital [while working toward upgrading its status];

• Improving access to primary and specialty care in Pender County;

• Recruiting specialty care physicians to offer services in Pender County; and

• Maintaining and improving acute and ambulatory facilities in Pender County. 

• Programmatic expansion, including physician recruitment and equipment investments in patient acute care and outpatient services;

• Support of faculty salaries for a rural track of Black River Health Services’ Family Medicine Residency Program;

• Ambulatory network development initiatives;

• Facility modernization and upgrades;

• Workforce development, including education and training, and maintenance of competitive wages and benefits for hospital employees;

• Additional staffing; and

• Information technology, data analytics, and digital health"

The state attorney general’s office has not been involved in the deal yet, but will likely take on a similar role as it did when approving the NHRMC sale, according Nazneen Ahmed, spokesperson for Attorney General Josh Stein's office. “We look forward to reviewing this proposed transaction to ensure it benefits health care for the people of Eastern North Carolina,” Ahmed said. 

The attorney general’s statutory purview includes alignment with state antitrust laws and other rules surrounding how counties can sell hospitals, according to a previous release from the office during the NHRMC sale. 

“We've always been committed to the residents in Pender County," said Shelbourn Stevens, president of Novant Health’s coastal region, "and this is just another way we can continue to grow our health care services here and create more access."

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