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Health Care

Pender Looks To Sell Hospital To Novant

By Johanna F. Still, posted Jul 7, 2023
Pender County officials are looking to sell the Burgaw hospital to Novant Health, which had been operating the facility. (Photo by Johanna F. Still)
Pender County officials gathered on June 21 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 on June 16, is like an engagement. The actual marriage and vows are slated for September, leaving plenty of negotiations still on the table. 

“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 because it’s a “negotiation stage document,” 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. 
County staff later clarified that the “price” Novant is paying for the Burgaw hospital assets is its $50-million capital commitment over 10 years. 

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. At the recent press event, 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.”

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. 

The state attorney general’s office has not been involved in the deal yet as of press time, but will likely take on a similar role as it did when approving the NHRMC sale, according to Nazneen Ahmed, spokesperson for Attorney General Josh Stein’s office. 

Closing could occur within six months of Sept. 20, according to county staff. Due diligence could alter some details of the agreement, but the essence of it has already been disclosed publicly, staff said.

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