2010-04-13 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
JOINT MEETING WITH NEW HANOVER REGIONAL MEDICAL CENTER PAGE 794
BOARD OF TRUSTEES,APRIL 13,2010
ASSEMBLY
The New Hanover County Board of Commissioners held a joint meeting with the New Hanover Regional
Medical Center Board of Trustees on April 13, 2010 at 5:00 p.m. at New Hanover Regional Medical Center,AHEC
Auditorium,2131 S. 17a'Street,Wilmington,North Carolina.
Members present were: Chairman Jason R. Thompson;Vice-Chairman Jonathan Barfield,Jr.;Commissioner
Robert G. Greer;Commissioner William A. Caster;Commissioner Ted Davis,Jr.;County Attorney Wanda M. Copley;
Clerk to the Board Sheila L. Schuh and County Manager Bruce T. Shell.
Board of Trustee members present were: Chairman David Sims;Vice-Chairman John Fuller, Michael Boggio;
Carl Brown;Lawrence Clark;Dr.Larry Dashow;Robert G. Greer;Ronald Isyk;Patricia Leonard;Helyn Lofton;Nancy
Marks;Richard McGraw;John Monroe;Dr.Neil Musselwhite;Dr.John Pace;F.Rivenbark;and Dr. Clarence Wilson.
CALL TO ORDER
Chairman Thompson and New Hanover Regional Medical Center Board of Trustees Chairman David Sims
called their respective Boards to order. Chairman Sims requested New Hanover Regional Medical Center President and
CEO Jack Barto to make the staff presentation.
STATE OF THE MEDICAL CENTER PRESENTATION
New Hanover Regional Medical Center President and CEO Jack Barto presented the following information:
Who is NHRMC:
• New Hanover Regional Medical Center (NHRMC) is the only place in the region for specialized
services in cardiac,orthopedic,oncology,vascular,trauma and neonatal care.
• Orthopedic program ranking among nation's top 10%four years in a row.
• Centers of Excellence in cardiac and bariatric services. Designated as a Teaching Hospital Cancer
Program.
• Teaching hospital in four residency programs: Internal Medicine, OB/GYN, Surgery and Family
Medicine, affiliated with the UNC School of Medicine.
• Physician staff of 520 offers specialties comparable to larger metro areas.
Statistical Glance for Fiscal Year 2009:
• NHRMC Campus:
• 30,707 admissions in FY09 representing a 6%increase
• 565 staffed beds
• 45 treatment rooms in Emergency Department,7 fast-track
• 79,871 visits in FY09
• 24 operating rooms
• 21,807 surgeries in FY09
• Level 11 trauma center
• Cape Fear Hospital Campus:
• 4,435 admissions in FY09
• 74 staffed beds
• 20 treatment rooms in Emergency Department
• 37,418 visits in FY09
• 7 operating rooms
• 8,702 surgeries in FY09
• Radiology-MRI, CT,Diagnostics
Fiscal Year 2010 Budget:
• Total operating expenses in the amount of$700 million
• Personnel expense in the amount of$289.3 million
• Supplies expense in the amount of$143.6 million
• Bad debt in the amount of$93.4 million
• Operating gain in the amount of$23.5 million
• Operating margin in the amount of 3.25%
• Full time employees—3,921
• NHRMC receives no taxpayer dollars to support operations
Regional Impact:
• Impact of more than$1.2 billion annually on New Hanover County's economy.
• More than 8,300 jobs depend,directly or indirectly, on its viability.
• Largest employer in Southeastern North Carolina.
• Statewide,hospitals support$6.6 billion payroll.
• Industry cannot recruit key personnel without presence of strong medical center.
Service Excellence Emphasis Driving Results:
• Created a Service Excellence culture where patients want to be treated, employees want to work and
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
JOINT MEETING WITH NEW HANOVER REGIONAL MEDICAL CENTER PAGE 795
BOARD OF TRUSTEES,APRIL 13,2010
doctors want to practice
• People, Service, Growth,Quality,Finance:
• People: Retaining the Best
• Service: Patients and Community
• Patient satisfaction at the highest levels in its history(83rd percentile on recent HCAPS)
• Staff pays taxes, sends children to school here and volunteers on numerous civic causes
• Safety net for seven counties
• Lose millions of dollars providing psychiatric care,outpatient clinics and EMS
• Other examples of community outreach:
• VitaLine
• Outpatient pharmacy
• HIV Care Team
• Free mammograms, as well as vascular and cardiac screening, and other clinical outreach
• More than$120 million in uncompensated care for FY 2009
• Community sponsorships exceed$400,000
• Growth: Meeting Community Demand
• Expansion project began in January 2006
• $220 million+invested in community's health care
• Financed through operations and$8.3 million of philanthropy to date
• Projects to be completed Fall of 2010
• No public tax money
• Market share in 7 County area up 2.5 percentage points to 51.2%
• Betty H. Cameron Women's and Children's Hospital—opened September 14,2008
• Surgical Pavilion—opened June 30,2008
• Patient Tower renovations—five floors completed with entire project completed by November 2010
• Challenges:
• Hospitals' Medicaid share greater than the State
• Medicaid losses on the rise in North Carolina hospitals
• Breakdown of losses:
• Medicaid:
• FY 2009 loss: $11.08 million
• FY 2009 Reimbursement: 86.68%of costs
• Three-year average: $11.84 million loss
• Reimbursement: 84.87%of costs
• Medicare:
• FY 2009 loss: $15.83 million
• FY 2009 Reimbursement: 92.92%of costs
• Three-year average: $16.87 million loss
• Reimbursement: 92.09%of costs
Health Care Reform:
• Welcome fact that reform of health care system has at least begun.
• Still analyzing how Health Care Reform Bill will affect hospitals and the industry.
• Support insuring up to 95 percent of U.S. citizens.
• Expect less payment from government, as long as it recovers some revenues from the newly insured.
• Safety-net hospitals and physicians cannot carry the burden alone.
• "Reform"was mostly insurance reform with very little reforming of actual delivery of health care.
• Concerned enough primary care physicians available to treat newly insured.
• Very little on meaningful tort reform.
• Personal responsibility needs to be part of this discussion.
• Discussion should have more to do with getting away from fee-for-service system. Interested in
proposals that allows hospitals,physicians,and all other stakeholders to work together to reduce the cost
of caring for a given population.
Strategic Response:
• Proactively manage operational and financial performance:
• Began "Geared up for Greatness" initiative in 2008 to reduce inefficiencies and maximize
revenue.
• Identified improvements to date: $50+million
• Successful strategies include:
• Renegotiated contracts with outside vendors
• Reduced cost of supplies through increased buying power
• Managed labor cost by staffing to industry benchmarks and through attrition
• Better case management of patients
• Because of proactive management from top to bottom,no layoffs among workforce of about
4,500,by far the largest in the region. Maintained raises and kept health insurance premiums
flat for sixth year
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 31
JOINT MEETING WITH NEW HANOVER REGIONAL MEDICAL CENTER PAGE 796
BOARD OF TRUSTEES,APRIL 13,2010
• Work collaboratively with physicians:
• Created Physician Network through partnership with Carolinas Physician Network (over 40
providers to date)
• Exploring Accountable Care Organizations and similar concepts with area physicians
• Pursuing service line co-management with Orthopedic Surgeons
• Hired a Pediatric Surgeon and Pediatric Endocrinologist
• Established joint ventures with local physicians
• Coastal Carolina Heart
• Atlantic SurgiCenter
• South Atlantic Radiation Oncology
• Porters Neck Imaging MRI
• Focus on service line growth:
• Increasing pediatric specialties in area through collaboration with UNC
• Pursuing stroke center and certification
• Initiating a comprehensive Spine Institute
• Expanding Home Care services to better serve the region
• Created NHRMC Transfer Center to enhance patient referral process
• Conducting`Live and Learn'sessions to educate the community and drive incremental business
• Implement an ambulatory strategy:
• Opened full-service medical complex in Brunswick Forest
• Wilmington Health Associates
• Atlantic Orthopedics
• NHRMC Physician Group(primary care&urology)
• NHRMC imaging and lab services
• Acquired two imaging centers from Atlantic Diagnostic Center
• Assumed operations of imaging center in Porters Neck
• Acquiring Urgent Care of Wilmington on Military Cutoff
• Opened Dosher Medical Plaza in Oak Island
Summary:
• NHRMC is leading provider of health care in the region,a vital economic engine and provides millions
of dollars in charitable services and community benefit.
• NHRMC is expanding to meet the community's demand for services.
• NHRMC faces unprecedented challenges from new competitors,as well as changes in the industry and
demographics.
• NHRMC has developed proactive strategies to meet those challenges and move health care in this region
forward.
ADJOURNMENT
A brief question and answer period was held.
Hearing no further questions,Chairman Thompson and Board of Trustee Chairman Sims adjourned the meeting
at 6:25 p.m.
Respectfully submitted,
Sheila L. Schult
Clerk to the Board