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NHRMC Partnership Advisory Group Begins Evaluation of Options for Remaining Independent

The NHRMC Partnership Advisory Group has begun its analysis of the healthcare system’s current ownership structure and the options for remaining independent. The Advisory Group has been given the responsibility of evaluating and making a recommendation on the best way to position New Hanover Regional Medical Center as it works to improve the health and well-being of the region into the future. New Hanover County Commissioners, through a vote on September 16, authorized the group to explore everything from restructuring of the current system to forming partnerships on both limited and large scales.

Challenges to Growth

NHRMC has had the same structure since it was founded as a single hospital in 1967. County owned, but not supported by county tax dollars, NHRMC has grown from a single hospital serving one county to an integrated system that serves the entire seven-county region.

In the current structure, New Hanover County owns the real property, facilities and assets of NHRMC, which NHRMC then operates as a health system according to a lease agreement with the county. The original hospital remains the legal parent organization to all the affiliated parts of the system, including New Hanover Regional EMS, NHRMC Physician Group, NHRMC Home Care and Pender Memorial Hospital. County Commissioners choose the members of the NHRMC Board of Trustees and NHRMC can only borrow money to build in New Hanover County.

This structure limits representation from the wider area that NHRMC serves and inhibits its ability to offer services closer to where people live in the region. Nearly all North Carolina’s not-for-profit hospitals abandoned the county-owned and -controlled models years ago, many in favor of the other forms of community non-profit structures, such as a hospital authority or a private community nonprofit. These structures allow varying degrees of autonomy and investment flexibility that have enabled systems like Vidant, WakeMed, Atrium Health, and Novant to grow.

“We have restrictions other organizations do not,” explained NHRMC President and CEO John Gizdic. “We have not been able to build our own system the way others in the state have been able to do, because we are legally and financially restricted from adding services where we see opportunities for them in the region.”

Looking at Options

Last year, NHRMC looked at an option that would establish a new non-profit parent corporation that would operate over the main hospital and the other parts of the system, thereby modernizing the structure so the various components of the NHRMC system aren’t working under a hospital-centric corporation. The restructuring, which would need to be approved by the New Hanover County Board of Commissioners, would also provide more flexibility for working outside New Hanover County.

“The Board of Trustees looked at all the options for restructuring,” said NHRMC BOT Chair Jason Thompson, “They each solve some problems, but none solves everything.”

Most notably, the options don’t create access to more capital and resources to grow. As part of their process, the Advisory Group may consider a restructuring that keeps the NHRMC system independent and community owned, but also allows it to enter into a partnership agreement that brings resources to key areas.

During the meeting, the group looked at the spectrum of partnership possibilities, including joint ventures, clinical services agreements and management agreements. Most options would allow each organization to remain independent and/or locally controlled.

Advisory Group members expressed their interest in further considering how to remove some of the restrictions holding NHRMC back as a county-owned system while also maintaining local control and bringing in resources through a partnership.

“It may be a combination of things,” said Barb Biehner, Partnership Advisory Group Co-Chair.

Member Cedric Dickerson said he’s looking forward to learning more and seeing what comes back from the proposals. “All of us are doing a lot of reading to help us make the right decision. I’m trying to let myself stay in that lane and see where the process leads.”

The next meeting of the Advisory Group is February 6. Meeting schedules, minutes, presentations, and audio recordings can be found at www.nhrmcfuture.org.