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2019-10-15 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 372 Jeff James, Wilmington Health CEO, stated that this community is very fortunate. In his 25 years of healthcare executive experience he has never seen a medical community of this size with so much capabilities, so much potential, to positively impact the entire delivery system for the better. Without question the physician core of this community is the best he has ever seen anywhere and the hospital is second to none. Wilmington Health congratulates the hospital on its achievements, its commitment to the community, and recognizes their goal is to do the best for the community. The community is fortunate to have an asset like NHRMC and Wilmington Health has every confidence in its leadership. He thinks it is important to say that neither Wilmington Health nor he has formed an opinion and do not currently support any position or have any recommendations on the proper course of action for the County Commissioners as it relates to a possible transaction involving the community’s asset. It is clearly in the community’s and Wilmington Health’s best interest to have a strong hospital. They do however have questions and concerns. The first is about this process. There is no representation of independent group practices in this process. It is fair to say that NHRMC physician group is well represented by the hospital leadership and the members of the BOT, and the hospital medical staff is well represented by the five physicians appointed to the PAG by the medical executive committee. However, it is not clear that independent practices have been asked to participate in this process in any meaningful way. Speaking for Wilmington Health, he further stated, as the second largest provider of physician services in the county and one of the largest independent and most successful multispecialty group practices in the state, it has not been engaged in this process. This is despite several attempts on its part to engage constructively in the process. While Wilmington Health has tremendous respect for the physicians named to the PAG by the medical executive committee and applaud their willingness to serve in what will certainly be a challenging position, in no way do they represent nor do they have any authorization to speak on behalf of Wilmington Health. There is a question in Wilmington Health’s mind as to whether there is truly representation for any particular constituency or the community as a whole. This is because it is Wilmington Health’s understanding that as part of this process the members of the PAG will be required to sign confidentiality agreements. The very nature of confidentiality agreements limits dialogue between representatives and his/her constituency. There can be no true representation. One question they have is will the nature of these confidentiality agreements be made public? Will the public get a chance to understand their representatives can and cannot talk about? Kathy Muzzey, resident of Princess Street, stated she passes her time as her concerns have already been eloquently expressed by others. David Ward, resident of Willow Woods Drive, stated that he has been in Wilmington all his life, his father helped build the hospital, and his wife worked at the hospital. He and his family have seen this county grow up from a small population and has seen a lot of buildings come up in this County. One thing to be very proud of is this hospital because it came up with the people paying for it. The people voted to build the hospital. Since then, it has grown very large, it has prospered, and is still prospering. His family owns many properties in this County and when they sell a property, there has got to be a motivation to sell. It’s either to make a profit or its going to do him some good. He is asking to know what the motivation is for this process. That is what needs to be asked. Once the hospital is sold, the money is gone. Again, once the hospital is sold the money is going to go quickly. He would challenge the Board to build the hospital back for $1 billion. All the hospital campuses and building it will never be done and you cannot build it back. Right now we are prospering, this County is doing well, and the hospital is doing well. He has read the news articles that says the County says if it sells the hospital it can put the money in the bank. He says that there is already money in the bank and we, the people, own the hospital and paid for it. It has now gone to a regional hospital and everyone is allowed to enjoy it. If something is done, everyone in the area (including other counties) need to be included and it needs to go to a vote. The people need a say so in this because they know it benefits them. The County currently has control and once it loses control, what will happen to the people that do not have insurance and want to come in for treatment? What will happen with the prices increasing if it is sold and right now the County has money in the bank so what will help by selling it? Chairman Barfield stated this public hearing is being recorded and streamed live on the County’s Facebook page for anyone who is unable to attend. Each person will be able to speak for three minutes. There is a timekeeper next to the podium who will let speakers know when there is one minute left and when time is up. Please be courteous and end comments at three minutes. Speakers are asked to speak on their priorities for healthcare in this community. What is important to you and your family? And what do you feel should be required as part of the Request for Proposals that will be developed? Members of our hospital Board of Trustees as well as the Partnership Advisory Group are here tonight. The advisory group will be working over the coming months to develop the request for proposals, and the information heard tonight will help inform that work. Once the Request for Proposal (RFP) has been developed, it will be shared with the public, the Trustees, and the Commissioners. This is anticipated to occur no earlier than December, after the advisory group puts a lot of work into its development, as well as gains an understanding of the full scope of NHRMC’s current position and the industry as a whole. We anticipate allowing 60 days for organizations to respond, so it will likely be in February or March before proposals are received. At that time, they will be shared publicly and another public hearing will be convened to receive comments on the proposals. It’s important to note that while the RFP is out, the Partnership Advisory Group will also be examining the options for maintaining county ownership and will then be able to take that research and evaluate the proposals that are received. Chasity Cace, resident of Addenbury Court, stated that she is the Wilmington Health Chief Financial Officer, and of most concern to Wilmington Health is the certainty that a sale will increase the cost of care and could potentially reduce the quality of care in the community. It is not reasonable to assume that an organization is going to invest close to $1 billion and not expect a return on their investment. The claims that the investment will be recouped through efficiencies and growth of patient volumes across the region is disingenuous at best. A simple NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 373 Google search using the term “impact of hospital consolidation on medical costs” reveals the following top six results: the impact of hospital medical costs NCCI increases 6 to 18 percent; bigger but not better hospital mergers increase costs and do not improve quality; hospital mergers often raise prices analysis finds; provider consolidation drives up healthcare cost; medpact to explore hospital consolidation impacts Medicare costs. When hospitals merge th to save money, patients often pay more. On September 16, the representative from one of the potential RFP recipients reached out to Wilmington Health to get a feel on its perspective. When asked about the cost of care going up, his response was very simple stating “you are right to be concerned about the cost of care. Anyone including us who purchase it will be looking for a return.” They told him they appreciated his honesty. At a minimum it is highly likely we will see dollars leaving the community, jobs leave or never materialize in the community, and New Hanover County employers and our patients will be footing the bill. Make no mistake this is a form of tax. It just comes without representation. As one of the area’s largest employers, Wilmington Health has seen firsthand what happens to the cost of care when a larger health system is brought into our community. Many of the physicians in the NHRMC physician group are actually employed by Charlotte-based Atrium Health already. Atrium was formerly Carolinas Healthcare System and one of the likely suitors to buy the hospital. The prior hospital administration cut this deal and the cost to Wilmington Health’s self-funded plan went up overnight as it did for every other employer self-funded plan in the community, including the one the County is responsible for. As more and more physicians are employed by Atrium under the guise of NHRMC, Wilmington Health’s health plan costs continue to increase. As a self-funded payer, Wilmington Health has access to the detailed claim information. Double digit percentage increases could be seen in its claims literally overnight. Nothing changed about the provider or the service except one day they were a community provider and the next they were employed by a larger system from Charlotte. To add insult to injury, millions and millions of dollars leave the community in the form of management fees to the large system year after year. Chris Bunch, resident of Woodland Trace, stated that he is the Chief Operating Officer for Wilmington Health. Finally, a consultant firm has been hired to create a strategy around selling the hospital. A PR firm was engaged weeks ahead of any formal announcement to help craft the message to the public. He is guessing the phrase “we are just asking the question” was coined by the PR firm. Wilmington Health is confident the County Commissioners will be provided an excellent alternative for sale or other transaction. One of Wilmington Health’s major remaining questions is when will an equal amount of effort be seen with perhaps a different consulting firm, a different advisory group, or anyone engaged to provide the County Commissioners an opportunity for a path forward if there is no transaction. When will it be seen that a group is tasked with the very premise of the question and will it part of the charge to the PAG? Additionally, one of the stated reasons for a transaction is to allow the hospital to obtain additional borrowing through bond financing or expansion. What benefit is it to taxpayers and citizens of New Hanover County for the hospital to expand in other counties? Will the expected organic growth of this County support the necessary growth of the hospital? Also, is bond financing the only mechanism for acquiring capital? Wilmington Health is unable to use bond financing, yet it has still been able to expand significantly in the last ten years. There have been multiple references to the need for a $1 billion investment to the healthcare system in our community. As mentioned before by several people, the transparency for this whole process is appallingly light. Very few details have come out illustrating this need and fewer details have come out about the alternatives for proforma analysis that drive these conclusions. When will we see the billion-dollar investment need and alternatives outlined in detail as part of this transparent process? One of the issues discussed is the need to address the social determinants of health and Wilmington Health agrees. The question is, is that the hospital’s responsibility or the community’s responsibility? The community should be engaged in the best way to handle this need. Someone suggested a tax increase is warranted to meet the social needs. However, without details and alternative countermeasures being defined, it is not possible to engage in the discussion. Mr. Gizdic has repeatedly discussed the change in reimbursement methodologies in healthcare and he is correct. He is talking about the movements of value versus our current market of volume. Wilmington Health applauds him on this as Wilmington Health has been working on this for nearly a decade. He has continued to mention the potential for the downside risk as a peril and threat to the hospital’s ability to remain independent. What strategies has the hospital developed to mitigate this risk? As a point of clarification, the hospital would not be assuming these risks alone as most of the risk is attributed to the hospital’s physician group, not the hospital itself. Wilmington Health plans on doing its part and if asked, can do more. In less than three years, Wilmington Health will be assuming the financial risks for the total cost of care of patients attributed to it. This includes the financial risk of services provided at the hospital, thus alleviating the hospital of any downside risks associated with Wilmington Health patients. The hospital will never be asked to take on the downside risk of patients attributed to Wilmington Health only, only the patients attributed to its physicians. Michael Faulkner, resident of Nutt Street, stated he did not come prepared to say anything but thinks it is important to share his story. He explained how he was injured in March 2013 in a car accident that was not his fault while he was a UNCW student and the struggle of dealing with Allstate insurance to obtain payment. The arbitrators are working in favor of the insurance companies. Ultimately, America needs to buy up hospitals, not be selling them. He knows for a fact selling this hospital whether it’s for- or not-for profit, selling it to a private company changes its motives. He asked that this be taken into consideration. Derrick Anderson, resident of Stephenson Drive, stated that he is a United States Navy veteran, a graduate of UNC-Wilmington, and served on the New Hanover County Department of Social Services Board for six years and was chairman for two of those years. He also was on the hospital committee that studied privatization twenty-two years ago. Claud O’Shields was the chairman of the committee. He was against the sale then and is against the sale now. He thinks the whole system has been compromised, there is no transparency and for the record he wants everyone to know he does not trust the system, he does not trust what has been going on, and he does not trust NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 374 some of the things he has been seeing. He really does not want to say anything except he wants the record to show that he thinks the system is corrupt and he does not trust it one bit. BREAK: Chairman Barfield called for a break from 5:09 p.m. to 5:29 p.m. Chairman Barfield stated this this public hearing is being recorded and streamed live on the County’s Facebook page for anyone who is unable to attend. Each person will be able to speak for three minutes. There is a timekeeper next to the podium who will let speakers know when there is one minute left and when time is up. Please be courteous and end comments at three minutes. Speakers are asked to speak on their priorities for healthcare in this community. What is important to you and your family? And what do you feel should be required as part of the Request for Proposals that will be developed? Members of our hospital Board of Trustees as well as the Partnership Advisory Group are here tonight. The advisory group will be working over the coming months to develop the request for proposals, and the information heard tonight will help inform that work. Once the Request for Proposal (RFP) has been developed, it will be shared with the public, the Trustees, and the Commissioners. This is anticipated to occur no earlier than December, after the advisory group puts a lot of work into its development, as well as gains an understanding of the full scope of NHRMC’s current position and the industry as a whole. We anticipate allowing 60 days for organizations to respond, so it will likely be in February or March before proposals are received. At that time, they will be shared publicly and another public hearing will be convened to receive comments on the proposals. It’s important to note that while the RFP is out, the Partnership Advisory Group will also be examining the options for maintaining county ownership and will then be able to take that research and evaluate the proposals that are received. Commissioner White stated that in his business in the courthouse, we do a lot in terms of correcting the record. We have heard a lot of opinions here tonight and we are going to hear more and look forward to those. However, when there are facts that are misstated, he thinks it is important to point those out. He is not sure if there are any representatives here from Wilmington Health, if so he invited them to rebut what he is about to say. He will disclose that Wilmington Health is his primary care physician group, but a couple of things bear pointing out. First, Wilmington Health is for-profit and he would suggest at least in his own experience there, their standard of care is not subpar because of that. Now that does not mean the hospital needs to be for-profit, but that is an important point. Wilmington Health does an outstanding job meeting the standard of care and makes a profit without accepting Medicaid patients. Secondly, one of Wilmington Health’s physicians is a member of the PAG, Dr. Sandra Hall. She works there. For Wilmington Health to suggest it is not represented is not factual. He thinks it is important to point those facts out and correct the record. th Islah Speller, resident of North 7 Street, stated her question is to the County Commissioners. What she would like to know is if the County Commissioners are part investor with the privatization or sale of the hospital. Is it part owner of this plan to sell the hospital? And if so, if this private buyer owns more than one hospital and out of the seven hospitals this buyer may own, if one of them is not doing financially good at making a profit, where does that leave us as citizens here in New Hanover County as far as another hospital? Chairman Barfield stated that he wants to clarify what is being done here tonight. The Board is not engaging in any back and forth dialogue between the speakers and the Board. It is here to receive comments from the public during this public hearing. Ms. Speller stated that she is vehemently against privatization of selling of the hospital. Laura Dawson, resident of Bellwood Avenue, stated she owns Food Physics and Body Dynamics, LLC and her company has an approved contract with Federal, State, and local governments. The company does a clinical nutrition protocol that can be taught. What her feelings are about the evolution of healthcare, not only here in this County but across the United States and globally, is the significant shift in the type of care that is being provided and required by the patients and communities. She knows that a lot of that is leaning on knowledge, exchange of knowledge, and artificial intelligence that is being used in some of the larger educationally institutionalized hospitals. We want to make sure we are keeping in competition by learning about the new discoveries that are being made by those hospitals and organizations within our own community so we have greater options for expansion rather than contracting. She is not necessarily for or against the sale of the hospital. She is for the expansion or evolution of the services she believes are essential to be provided to us as County residents. th Kathryn Cardom, resident of South 8 Street, stated she is very concerned because what she has seen over time is that when things become privatized or taken away from the community you lose control and it becomes a lean mean thing where the cost goes high, the service has to go down, and the staff has to get reduced. She has talked with a lot of people during the break and a lot asked why there is not a referendum on the ballot. This should not be a question for a small group of people, but for everyone because it services all of us. She does not understand it but she thinks it can be heard from those attending tonight this should be on the ballot as a referendum. People do not want this decided for them by a few. If it is successful and working why would you break it? Hannah Gilmore stated she is an MSW student at UNC-Wilmington and is doing her clinical field work at NHRMC. The healthcare landscape is changing and she knows there will have to be adjustments made. She feels very fortunate to be able to do clinical field work at NHRMC and if the hospital is to sell, she would really like to see the organization maintain a commitment to hosting students in a supportive environment. This also means ensuring that employees create a supportive, engaging, learning, and working environment. She is always looking for ways to learn NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 375 from people who are excited about the work they do and really committed their patients and clients. She would also like the hospital to consider during this process that a commitment remains to charity care for uninsured patients so that these patients can apply for and receive assistance from the hospital. She also wants to see a commitment to maintaining strong supportive partnerships with community organizations that provide care outside of the hospital to ensure that patients don’t readmit and can be successful in all health issues. BREAK: Chairman Barfield called for a break from 5:42 p.m. to 6:07 p.m. Chairman Barfield stated this public hearing is being recorded and streamed live on the County’s Facebook page for anyone who is unable to attend. Each person will be able to speak for three minutes. There is a timekeeper next to the podium who will let speakers know when there is one minute left and when time is up. Please be courteous and end comments at three minutes. Speakers are asked to speak on their priorities for healthcare in this community. What is important to you and your family? And what do you feel should be required as part of the Request for Proposals that will be developed? Members of our hospital Board of Trustees as well as the Partnership Advisory Group are here tonight. The advisory group will be working over the coming months to develop the request for proposals, and the information heard tonight will help inform that work. Once the Request for Proposal (RFP) has been developed, it will be shared with the public, the Trustees, and the Commissioners. This is anticipated to occur no earlier than December, after the advisory group puts a lot of work into its development, as well as gains an understanding of the full scope of NHRMC’s current position and the industry as a whole. We anticipate allowing 60 days for organizations to respond, so it will likely be in February or March before proposals are received. At that time, they will be shared publicly and another public hearing will be convened to receive comments on the proposals. It’s important to note that while the RFP is out, the Partnership Advisory Group will also be examining the options for maintaining county ownership and will then be able to take that research and evaluate the proposals that are received. John Godwin, resident of Bougainville Way, stated he was born and raised here, received his PhD in history in 1994, and wrote a book about the history of Wilmington. He knows from various people he spoke with in writing the book how very concerned people were when the Atlantic Coastline Railroad was withdrawing back in the 1960s. At that time, it was thought the city was going to dry up. At that time, the decision was made to construct a new hospital, a first class one. An issue that had to be solved at that time was how to bring blacks and whites together, as African-Americans had an old community/public hospital built by the New Deal that they did not want to give up. It had to be worked out and was, and New Hanover Memorial Hospital was built through a bond issue. A public hospital, a public institution paid and financed through tax dollars. He asked what we are up against, and stated that we are up against conservatism, southern style. It’s old and been around for a long time and has had its way in Wilmington for a long time. The railroads here were financed through public bond issues, paid for by the people of this area, and then they were sold out to big corporations. Cotton mills, same story. All across the south where the mind of the south reigned and racial fear has been so rampant, lending itself to conservative domination. So often it was the southern kids, white and black, who got the worst healthcare, worst schools, worst treatment, and who would really stand up for their interests. So often it just wasn’t there and they suffered. Diseases that were endemic were often related to nutrition. Al Sharp, resident of Chestnut Street, stated he is a retired county manager and a retired executive director of Charlotte-Mecklenburg Council of Government. He sat on a hospital board for eight years and knows how painful the process is when a community feels that it is losing one of its assets. About four years ago a program was run here to look at issues about how the region could move forward with three key items coming out of the research. One, both people who live here and people who come here are very proud of their community. They are proud of UNC-Wilmington because of the richness it brings to the community. They are proud of the medical facilities that are here, so many of the retirees who have relocated here because their children want to know that there is a reliable managed system to provide healthcare. The third issue was the quality of life. One of the key components of the quality of life was trust. The citizens here and the other two counties that were researched believe fundamentally that their local governments were responsible, intelligent, and made good decisions, both cities and counties. He is asking at this time why are we looking at the possible dissolution of one of our main props of the community and how are we going to effectively know that it is in the best interest of the community in terms of quality of care, major employment, and a sustainable economic pattern. He hopes a decision is not rushed into that would be regretted and there is a deep abiding conviction in this community that the health system is our system, we need to be served by it, and we need to protect it. He is trusting that the Board and PAG will look at every option before making a decision. Allie Reid, resident of Chambers Street in Leland, NC stated that as an NHRMC employee, she is thankful to everyone and has felt everyone involved has been transparent. She is also a student and has been studying healthcare and all of the reasons make sense to her. She hopes everyone can go into this with an open mind and really explore why this is being done. It makes sense. If NHRMC had more resources it could really provide exceptional care that is even better than what is already being done. She really truly believes it and has full faith in the leadership and is not worried. Break: There being no one else to speak at this time, Chairman Barfield called for a break from 6:18 p.m. to 6:41 p.m. Chairman Barfield stated that at this time no one else has signed up to speak and invited anyone in the audience who had not already spoken to provide remarks if they so choose. No one provided remarks. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 376 Break: There being no one else to speak at this time, Chairman Barfield called for a break from 6:42 p.m. to 6:57 p.m. Chairman Barfield stated that at this time no one else has signed up to speak and invited anyone in the audience who had not already spoken to provide remarks if they so choose. No one provided remarks. ADJOURNMENT There being no further business, Chairman Barfield closed the public hearing and adjourned the meeting at 7:00 p.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim record of the New Hanover County Board of Commissioners meeting. The entire proceedings are available for review and checkout at all New Hanover County Libraries and online at www.nhcgov.com.