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Memorial, Novant medical union almost complete

Subheadline: 
Memorial, Novant must finalize details; partnership will help capital, aid area health care

The board chairman of the parent corporation of Memorial University Medical Center on Wednesday said negotiations with Novant Health for a partnership continue with indications of a March time frame to finalize an agreement.

“We’re nearing the finish line, but we’re not there yet,” Harry Haslam Jr. said.

He said he talked Wednesday with Frank Hargett, Novant chief financial officer, and “we are both focused on getting this transaction done.”

Because Chatham County is the actual owner of the hospital, Haslam said, the Chatham County Hospital Authority’s approval will be needed on the final agreement.

The medical center board in September said it had agreed to pursue exclusive partnership discussions with Novant Health Inc., a Winston-Salem, N.C.-based not-for-profit health care provider, to ensure stability for the local system in the changing environment of health care.

Maggie Gill, Memorial’s president/CEO, said Wednesday details of the “membership substitution agreement” for the two organizations must undergo more negotiations as well as approval by the Memorial board of directors and the hospital authority.

Memorial officials have said the proposed long-term partnership will help with capital improvements, improve patient care and grow jobs. It also is expected to infuse capital and assist the health care provider deal with financial challenges with health care.

“The whole point is to maintain our mission,” Gill said. “We wouldn’t be doing it otherwise.”

She has emphasized that the agreement is not to sell Memorial, but that Memorial and Novant “will join forces.”

“All of the property owned and leased by the Chatham County Hospital Authority to Memorial Health will remain owned and leased by the authority to Memorial Health,” she said. “We are working toward being able to share more details in a March time frame.”

Novant filed a certificate of need with state officials in December with a non-binding letter of intent to meet a time frame of at least 120 days.

“We are continuing to work through the details of our potential agreement, and we do expect to be able to share more information in the coming months,” Haslam told Memorial Health system employees in a letter sent Wednesday.

“We are defining our future, rather than letting it define us.”

His communication to system employees came after Memorial’s board met Tuesday night, and the authority’s board met on Wednesday morning.

Haslam called the action “usual and customary for a partnership of this nature.”

“To that end, this is not yet an approved partnership, and discussions with Novant Health are ongoing,” Haslam said.

He said details of the proposal include:

• Significant capital commitment, which will create more patient access, expanded clinical services and increased job opportunities.

• Support of all debt, including bond debt.

• Maintaining Memorial’s board.

• Maintaining the Chatham County Hospital Authority lease and arrangement with Chatham County.

• Continuing local policies, including charity care.

• Support of team members, management and physicians.

• Support of market-based wages.

• Continue and grow all major service lines, including mission-based services — Level I trauma, Level III neonatal and medical education.

“A long-term strategic partnership with an outstanding organization like Novant Health will be very good news for Memorial, our patients and our community,” Haslam said in his letter. “We will have access to grow in a manner that we could never do as a standalone organization.

“I am excited about this opportunity, and I hope you are as well.”

Memorial and Novant have had a relationship since 2012 with a shared services agreement that officials say has yielded more than $8 million in cost savings.

Don Waters, chairman of the hospital authority, said Wednesday the parties have “agreed upon a letter of intent and are negotiating the final provisions of the contracts that we expect to mirror that letter of intent.

“I see no problem in getting to that point,” he said.

The hospital authority, which owns the land beneath Memorial and leases it to the medical center for $1 a year, agreed earlier to extend the lease to 40 years pending a legal review.

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