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Memorial CEO: Hospital authority's actions killed Novant Health deal

Subheadline: 
Officials left to wonder about key services, overall stability of region’s health care

  • FILE - Memorial University Medical Center

Memorial Health President/CEO Maggie Gill on Tuesday said that a partnership agreement with a North Carolina medical system was doomed after the county’s hospital authority repeatedly changed agreements intended to make the deal work.

“The constant modifying created doubts about if we really wanted the partnership to happen,” Gill said a day after Novant Health Inc. pulled the plug on negotiations.

Included in the alterations were five changed positions in the face of agreements reached with Novant, a Winston-Salem, N.C.-based nonprofit health care provider.

Those changes that did not stick to agreed upon key terms between Feb. 12 and April 28 included Novant’s offer to guarantee a total of $300 million — including $163 million in bonds backed by Chatham County, which Novant had previously offered to pay off immediately, Gill said.

On Monday, Novant President/CEO Carl S. Armato notified Memorial officials that his organization had decided to terminate negotiations with Memorial, citing “a lack of alignment among the Authority, the Memorial Board and other local stakeholders.”

Specifically, he said, “The Authority has indicated its intent to go beyond its historical role and has insisted upon inserting itself into the detailed oversight of Memorial operations, potentially resulting in inconsistent direction from two different governing bodies.”

The withdrawal left Don Waters, chairman of the Chatham County Hospital Authority, surprised at what he thought were good-faith discussions surrounding the lease and “had no reason to think this was not progressing.”

The agreement would have required changes in the authority’s 40-year lease for the property where Memorial sits — which authority members insisted protected key services for the safety net hospital.

With Novant went an agreement to infuse $295 million into Memorial over the first 10 years of the agreement and a willingness to guarantee the 2012 county-backed bond agreement.

Memorial Board Chairman Harry Haslam Jr. has described the pending deal as a “make or break deal” designed to, in part, provide financial stability to the region’s only safety net hospital.

 

Services at risk

Left most at risk in the wake of the agreement’s failure were key elements of level one trauma care, The Dwayne & Cynthia Willett Children’s Hospital and its pediatric and neo-natal services, and behavioral health services, Gill said.

Gill said the actions by the authority had “flat out put medical education at Memorial at risk.”

Mercer’s school of medicine and Memorial last month dedicated an $18-million, newly reconstructed and expanded medical education and research facility on Memorial’s campus.

“We were disappointed to learn that the Novant-Memorial talks have broken off,” Mercer University President William D. Underwood said Tuesday. “We were looking forward to the partnership because it would have enabled the Mercer-Memorial to expand, particularly in the critical area of medical education.”

In wake of Novant’s decision, Gill said her team “needed some time to regroup internally.”

“We have been resilient before,” she said. “We have been through a lot. We’ll continue to focus on high quality patient care every day.

“I think this creates a level of instability in the organization that is not easily healed,” she conceded. “(But) We’ve done it before.”

Memorial “is an anchor in this region and we’re not going anywhere, but we might look different.”

Dr. Jay Goldstein, Memorial’s physician-in-chief for emergency services, said Tuesday that, “The proposed partnership with Novant Health was a golden egg opportunity for Memorial. It would have provided resources to help us continue to provide high-quality medical care for all of the patients we serve, particularly those who don’t have other health care options.

“This would have been great for our community.”

At least one of Memorial’s top officials was already looking forward Tuesday.

Dr. David Byck, president of the medical staff and a vocal supporter of the deal, said in an e-mail to Armato that he recognized that Novant and Memorial “had reached an agreement … in good faith over six weeks ago.

“I ask that you reconsider halting conversation with the Chatham County Hospital Authority, and help us cement this deal,” he said. “Please help us see this through. I hope to be working together in the near future.”

 

Waters: Deal lacked local oversight

Chatham County Hospital Authority board chairman Don Waters said Tuesday he continued to be surprised at Novant’s pulling the plug on the Memorial deal.

“The Hospital Authority is surprised by this unfortunate turn of events. We trusted we were dealing in good faith to resolve the issues and move forward with the Novant deal and had no reason to think this was not progressing.

“In fact, as recently as 10 days ago, Novant had a lease in hand that reflected the agreement reached with the Authority in late April,” he said.

Referring to Novant President/CEO Carl S. Armato’s Monday memo withdrawing from negotiations, Waters said, “Novant’s president and CEO noted that, under the approach advocated by the Authority, Novant would lack the flexibility to implement best practices quickly and meet the demands of the rapidly changing health care landscape.

“This should be of grave concern to all Chatham County residents, as the primary concern of the Authority is to retain oversight over Memorial’s safety net services, primarily its Level One Trauma Center, Level Three Neo–Natal ICU and a continued commitment to indigent care and medical education.

“We welcomed the opportunity for Memorial to have a capital partner and a strong management team, but there was simply not enough local oversight in the Memorial Board (whose board members would have been subject to the approval of Novant) to assure these safety net services would be retained.”

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