1996-08-12 Special Meeting
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 530
ASSEMBLY
The New Hanover County Board of Commissioners held a Public
Hearing on Monday, August 12, 1996, at 7:00 P.M. in the Assembly
Room of the New Hanover County Courthouse, 24 North Third Street,
Wilmington, North Carolina.
Members present were: Commissioners Sandra Barone, William A.
Caster; William E. Sisson, Jr.; Vice-Chairman E. L. Mathews, Jr.;
County Manager, Allen O'Neal; County Attorney, Wanda M. Copley; and
Clerk to the Board, Lucie F. Harrell.
Chairman Robert G. Greer was absent.
Vice-Chairman Mathews called the meeting to order and welcomed
everyone present. He reported the purpose of the hearing was to
receive public comments on the proposal by the New Hanover Regional
Medical Center Board of Trustees to convert the Medical Center to
a private non-profit corporation that will operate as a Community
General Hospital. He requested all persons making comments during
the Public Hearing to limit their remarks to three minutes.
Vice-Chairman Mathews requested Dr. R. Bertram Williams, Jr.,
Chairman of the Board of Trustees, to present a brief presentation
on the proposal.
Dr. Williams commented on the growth of New Hanover Regional
Medical Center through the years and advised that through excellent
leadership by the Trustees and quality administrative management,
the hospital had grown from an $11 million asset to a $220 million
asset. After extensive study, the Board of Trustees recommends
changing from a public hospital to a private non-profit
corporation. Approximately 13 years ago, legislation was enacted
by the N. C. General Assembly to allow a public hospital to become
a non-profit corporation to operate as a Community General
Hospital. Under this structure, hospitals have been given more
flexibility in bidding construction projects and investing money,
which in turn, has allowed non-profit hospitals to compete in the
changing medical environment. The primary reason for recommending
the change is to generate additional revenue without increasing
patient charges. It has been estimated that investments will
generate an additional $25 million over a period of five years with
an estimated savings of 10-15% in construction costs.
Currently, the Medical Center does not receive funding from
New Hanover County for the provision of indigent care. Last year,
the provision of indigent care and uncollected bills amounted to
$25 million. In the past, this revenue loss was handled through
cost-shifting; however, this has changed due to pressures on
hospital revenues. Very simply, the paying patients cannot
continue to be charged for indigent care and uncollected bills.
In order for the change to occur, the Medical Center will be
required to negotiate a contract with New Hanover County to ensure
the provision of indigent care, allow the hospital to operate as a
Community General Hospital that cannot be sold, and require the
hospital to revert back to the County if any conditions of the
contract are violated.
In closing, Dr. Williams stated this was not a new idea and
advised that Forsyth Memorial Hospital had changed to a private
non-profit Community General Hospital in the early 1980's and now
has one of the lowest room rates in the State. He reported after
speaking to civic organizations and holding public forums, a
majority of the citizens understand why the change is needed once
the issue is explained. He urged the Board of County Commissioners
to move forward with adopting a resolution authorizing the proposed
change so New Hanover Regional Medical Center can continue to
provide quality care and remain competitive in a rapidly changing
medical climate.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 531
Chairman Mathews opened the Public Hearing.
Mr. Harold R. Fussell spoke in opposition to the proposed
change and reported on the situation that occurred with the Baptist
Hospital at old Wake Forest when the hospital became owned by a
group of trustees. He recommended allowing the hospital to remain
a public hospital, and stated if the proposed change was approved,
the hospital should be sold at market value with the proceeds being
invested to meet educational needs, infrastructure needs, and the
needs of the elderly and poor.
Mr. Howard Greenebaum, 841 Settlers Lane, Kure Beach, North
Carolina, commented on the hospital being a $220 million public
asset and suggested providing an opportunity for the citizens to
vote on the proposed change. He expressed concern for a conflict
of interest and requested each County Commissioner that had ever
received any campaign contribution or personal remuneration from
any segment of the medical/industrial field to abstain from voting.
Concern was also expressed for the possibility of the public losing
a great deal of money if Mr. Hobbs was given authority to invest
hospital funds in the stock market. In closing, Mr. Greenebaum
requested the Commissioners to study other options, such as
affiliating with the University of North Carolina and building a
medical school in Wilmington, or studying the organizational
structure of John Hopkins Hospital and its medical school before
deciding to give away a public hospital.
Dr. Henry Temple, a former member of the Hospital Board of
Trustees and former Chief of Staff Physicians, advised that through
hard work and thousands of hours given by the members of the Boards
of Trustees through the years, the citizens of the community are
now offered heart surgery, acute rehabilitation from strokes or
accidents, a neonatal care unit that is one of the best in the
State, and other services that at one time could not be received
without going to the Duke University Medical Center or the Chapel
Hill School of Medicine. He advised that New Hanover Regional
Medical Center was a tremendous asset to the region, and stated the
proposed change was needed in order for the hospital to remain
strong and viable.
Dr. William Parker, Chief of the Medical Staff, reported a
majority of the physicians, nurses, and patients are in favor of
the issue. The hospital provides indigent care for patients from
six counties and will continue to provide this service. He read
the following resolution that was adopted by the Medical Staff
comprised of more than 350 physicians:
WHEREAS, New Hanover Regional Medical Center is currently
structured as a public hospital and wishes to change to a
Community General Hospital under the laws of the State of
North Carolina; and
WHEREAS, the change will allow New Hanover Regional Medical
Center to more effectively compete in a rapidly changing
health care environment; and
WHEREAS, the primary mission of New Hanover Regional Medical
Center is to provide quality health care to all citizens
regardless of their sex, race, age, or ability to pay,
THEREFORE BE IT RESOLVED, that the Medical Staff of New
Hanover Regional Medical Center urges the Board of
Commissioners to approve the change of the Medical Center from
a public hospital to a Community General Hospital as
designated in N.C.G.S.153E-8.
Dr. Parker requested the Commissioners to approve the proposed
change as requested by the Board of Trustees.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 532
Mr. Julian E. Lanier, a resident of 1510 Robert E. Lee Drive,
spoke in opposition to the proposed change for the following
reasons:
(1)Concern for the word, "private" being eliminated from the
materials published on the proposed change. The proposed
Community General Hospital would be one of the most private
institutions in the world, totally free from public scrutiny
and answering only to the Board of Trustees. This type of
hospital would not be in the best interest of the community
and would not be right because tax money has been involved
with purchasing land and constructing the building.
(2)The proposed change may lower the rates for patient care;
however, all the figures have not been presented on the
charges made by Forsyth Memorial Hospital.
(3)Would the County be in a position to have the hospital revert
back to the County if the conditions of the contract were
violated?
In closing, Mr. Lanier recommended more study of the issue and
stated if a change is needed for the hospital to remain
competitive, the hospital should be sold with the County getting
totally out of the hospital business.
Mr. Lloyd Bradshaw, a resident of Wilmington for 54 years,
spoke in favor of the change and advised that many businesses had
come and gone over the years due to not making the necessary
changes. He commented on the importance of remaining competitive
and urged the Board to follow the recommendation being made by Dr.
Williams, who was an honest and trustworthy person as well as
physician.
Ms. Margaret B. Mosley commented on the recent illness of her
husband and reported he made an excellent recovery because of the
loving care provided by the ICU Staff. She urged the Commissioners
to approve the proposed change so the hospital could remain one of
the best medical facilities in the State.
Ms. Hilda Godwin advised that change was necessary in any
business; however, the County Commissioners should take time to
carefully study this proposal as well as other alternatives before
rendering a decision.
Mr. John Brett spoke in opposition to the proposed change and
reported when the County Commissioners did not approve a hospital
authority several years ago, everyone was told the hospital would
not survive. Now approximately eight years later, the hospital has
grown to a $220 million asset. Concern was expressed for the risks
that could be involved with removing limitations on investments,
denying public access to records, compliance to the Open Meetings
Law, and why the hospital would save money on bidding capital
projects when the State public bidding law requires award of the
contract to the lowest bidder. In closing, Mr. Brett asked why the
Board of Trustees had not informed the Board of County
Commissioners about the proposed change when this topic was
discussed for the past year, and he urged the Commissioners to
allow the hospital to remain a public facility.
Mr. Edward Connette, a semi-retired minister, expressed
concern about preventative health care for the elderly and stated
after studying the proposed change, he felt the change was needed
to allow the hospital to remain competitive and earn the necessary
revenue to provide quality medical care to all citizens of the
community, including the indigent and elderly population. He urged
the Commissioners to approve the proposal as requested by the Board
of Trustees.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 533
Mr. Chris Doody, a patient at the Coastal Rehabilitation
Center, expressed appreciation to the Board of Trustees for
promoting a program to allow disabled athletes to compete in wheel
chair tennis, wheel chair basket ball, swimming and road racing.
He urged the Commissioners to approve the change in order for the
hospital to remain financially sound and competitive so programs of
this type can be provided to the disabled population.
Mr. Randy Crow, a resident of the County, expressed concern
for health maintenance organizations and stated he felt this was
the force behind the proposed change. He requested the
Commissioners to allow the voters in New Hanover County to decide
on this issue.
Mr. Durant Vick, a resident of 233 Racine Drive, reported he
was a new resident moving from Raleigh to Wilmington and advised
that 24 months ago, he was requested to serve on a Task Force to
review Wake Memorial Hospital becoming a Community General
Hospital. After extensive study, the Task Force recommended
changing the hospital to a non-profit corporation or selling the
facility at market value. As of this date, the Wake County Board
of Commissioners decided to move forward with changing Wake
Memorial Hospital to a private non-profit corporation with
appointment of a Task Force to review how the transfer should
occur. He advised that most public hospitals had to be subsidized
by counties to provide indigent care, and he complimented the Board
of Trustees for providing the quality of leadership that has
allowed the hospital to operate without a contribution from the
County for indigent care.
Ms. Jana Albritton, President of the New Hanover County League
of Women Voters, reported the League was not taking a stand on the
issue, but would like to address certain aspects of the issue. The
League feels that citizens have a right to know and should be able
to attend all meetings and receive access to records. As to
medical care, every citizen should have access to the basic level
of care including the prevention of diseases, primary care, acute
care, long-term care and mental health care. Also, salaries and
employees of the hospital should be protected if the change is
approved. These positions led the League to believe that if the
people of the County do not continue to own and operate the
hospital, the facility should be operated in a manner consistent
with government utilizing the sunshine concept with open meetings
and accessible records. The League commends the Board of County
Commissioners for holding the Public Hearing and offers to assist
in holding more public meetings for the citizens to become better
informed. The Commissioners were urged not to rush into rendering
a decision on the proposed change without adequately informing the
public and thoroughly studying the issue.
Ms. Sondra Robertson, a past member of the Board of Trustees
and registered nurse, commented on hearing ten years ago that a
drastic change would occur in health care, and she advised this
change had occurred. She urged the Commissioners to approve the
proposed change as recommended by the Board of Trustees so New
Hanover Regional Medical Center can remain competitive and provide
quality medical care to all of its citizens.
BREAK
Vice-Chairman Mathews called a break from 8:15 until 8:30 P.M.
Mr. Jack White, a Libertarian candidate, commented on being
proud of the hospital and stated the public was being ripped off by
the Board of Trustees. He expressed concern for the amount of
money being spent for marketing, marketing research, health
visions, safety programs and other items that are not involved with
the care of sick patients. He advised that the current cost of a
room was $361 per day, the second highest in the State, and
reported if the change is approved, the citizens will be the
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 534
losers. They will not have access to public records and no one,
including the Board of County Commissioners, will know the salaries
being paid to top administrators and the Chief Executive Officer,
Jim Hobbs. Concern was expressed about a staff infection in the
operating room, which has not been addressed by the hospital
administration after many inquiries from the public. Concern was
also expressed for the lack of emphasis placed on the care of sick
patients in the information being distributed to the public by the
Board of Trustees as well as not referring to the non-profit
corporation as a "private" non-profit corporation. The
Commissioners were urged to oppose the change and allow the
hospital to remain a public facility.
Ms. Connie Parker, Interim Director of the Wilmington Health
Access for Teens, a program to provide health care to adolescents,
advised that without New Hanover Regional Medical Center, the
program would not be a reality. She commented on the need for
community programs and stated after discussion with many members of
staff, she felt the change should be approved to allow the hospital
to generate additional revenue and continue to compete in a rapidly
changing health care environment.
Mr. Seymour Alper, a former member of the Board of Trustees,
reported the change will allow the hospital to relax business
restrictions governing the investment of money and bidding
construction projects. This flexibility will generate additional
revenue to recover the loss in the provision of indigent care and
uncollected debts that amounted to $25 million last year. He urged
the Commissioners to trust the leadership provided by the Board of
Trustees and approve the change to allow New Hanover Regional
Medical Center to become a non-profit corporation with a successful
future.
Ms. Linda Pearce, a former member of the Board of Trustees,
reported she was concerned about the provision of indigent care,
only one black representative on the Board of Trustees, the lack of
business given to minority contractors, and the provision of
medical care to the elderly population. She stated with all of
these worries, she felt the proposed change was needed to allow the
hospital to remain competitive in meeting the rapid changes
occurring in health care. She advised that after checking with
black citizens in Forsyth County, a majority of the black
population felt they were being treated equally and receiving
excellent health care.
Ms. Pat Pane, a concerned citizen, expressed appreciation to
the Board of County Commissioners for allowing the public to voice
their opinion on the proposed change. She urged the Commissioners
to thoroughly review the topic and be sure the change was right for
the citizens of New Hanover County. She asked if a managed care
organization would own the hospital, and requested the true
advantages of a private versus a public hospital. In closing, Ms.
Pane stated if the Commissioners decide to allow the hospital to
become a private institution, it should be sold to the highest
bidder with the funds received being used to construct schools and
subsidize programs for senior citizens.
Dr. Joe Hooper commented on being associated with the Medical
Center since its inception and stated during this period of time,
many changes had occurred in medical care, particularly within the
past five years. He requested the Board of County Commissioners to
move forward with the proposed change in order for the hospital to
remain competitive and continue to provide quality medical care.
Judge Bradford Tillery reported on being the County Attorney
when New Hanover Regional Medical Center was just a dream. He
commented on the excellent quality of leadership provided by the
Board of Trustees through the years and requested the Commissioners
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 535
to move forward with allowing the hospital to become a Community
General Hospital.
Mr. Phil Sharpe, Vice-Chairman of the Board of Trustees,
reported on the rapid changes occurring in medical care and
requested the Commissioners to approve the change as soon as
possible since managed care companies were writing the rules and
the proposed change was necessary for the hospital to remain
competitive.
Dr. Norman Robinson, a member of the Medical Staff, stated the
citizens of New Hanover County should be proud of the educational
programs provided to the community, the provision of indigent care,
and other community services. These efforts cost money and with
the changes that have occurred in reimbursements for patient care,
the hospital must remain financially strong. He urged the
Commissioners to approve the proposed change so the Medical Center
can be given the flexibility needed to remain competitive.
Dr. Jim Snyder, a local cardiologist, reported on the many
services provided by New Hanover Regional Medical Center comprised
of doctors, volunteers, lab technicians, and others who care for
patients. He advised that managed care was here and that Medicare
would be financially unstable in ten years. With these pressures,
the hospital must be given the flexibility needed to make better
investments to generate additional revenue. The Commissioners were
urged to approve the change.
Mr. Ronald M. Smidt, Director of Facility Services at New
Hanover Regional Medical Center, spoke in favor of the proposed
change. He advised that operating as a Community General Hospital
would allow the hospital to use alternate methods of delivering
construction projects. Currently, State law requires construction
projects to be bid as multiple prime bids which increases the cost
of the project and creates disputes during construction projects.
He requested the Commissioners to approve the change as requested
by the Hospital Board of Trustees.
Dr. Gary Maxwell emphasized the role of New Hanover Regional
Medical Center as a teaching institution and stated he was
responsible for the surgical training program. He reported on the
excellent leadership provided by the Board of Trustees and the
Hospital Administration and requested the Commissioners to approve
the proposed change in order to continue to provide indigent care
and provide quality medical care.
Vice-Chairman Mathews closed the Public Hearing.
Dr. Bertram Williams responded to the following items
presented during the Public Hearing.
(1)The Open Meetings Law for a Community General Hospital would
be the same as for a public hospital.
(2)The Community General Hospital will be allowed to invest its
funds in a conservative manner with a more effective yield.
The N. C. Medical Commission and the Local Government
Commission will closely monitor hospital investments. The
Board of Trustees will establish guidelines that will have to
be followed with limitations, which will avoid any type of
wild and risky investments.
(3)The services mentioned by the League of Women Voters will be
provided under the Community General Hospital and there will
be no secret meetings. There will be no change in patient
care or in the salaries and benefits of employees.
NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 25
PUBLIC HEARING, AUGUST 12, 1996PAGE 536
(4)New Hanover Regional Medical Center is closely affiliated with
the University Medical Center in Chapel Hill. This
affiliation will continue to exist.
(5)Money is important, but the primary issue is the bedside care
given to patients.
(6)All funds will be used internally, or for projects established
by the hospital. No funds will be paid to stockholders.
(7)The Community General Hospital will be a community hospital
serving the citizens of Southeastern North Carolina. If the
hospital was sold, the local control would be lost. The New
Hanover County Board of Commissioners will appoint a minimum
of 51% of the Board of Trustees, which will provide local
control.
(8)The main advantage of the change will be to produce income
that does not come from patient charges. With more
flexibility in investments, additional revenue should be
generated and hopefully the room rates will decrease in the
future. After a complete study of the proposed change, the
Board of Trustees does not feel there are any disadvantages to
becoming a Community General Hospital.
In closing, Dr. Williams urged the Commissioners to move
forward with the proposed change.
County Manager O'Neal asked if a position had been taken on
increasing the fund balance from $52 million to $54 million, and
stated if so, what was the anticipated figure and how would the
fund balance be increased?
Dr. Williams reported that no figures had been applied to the
projected revenue reserve. He advised that bonds were sold in 1993
and in 1996 with the bond rating lowered from a double A to a
single A because of having an inadequate cash reserve. According
to Standard & Poors and Moody's, he was informed that New Hanover
Regional Medical Center should have a cash reserve of at least $125
million. Currently, the only source of income is from patient
charges. Hopefully, more flexibility in bidding and investments
will generate more revenue and avoid any future lowering of the
bond rating.
Dr. Thomas Clancy, speaking on behalf of the physicians trauma
staff, commented on the unique group of patients that come into the
Emergency Room and stated many of these patients are uninsured. He
requested the Commissioners to trust the leadership of the Board of
Trustees and approved this badly needed change.
ADJOURNMENT
Vice-Chairman Mathews expressed appreciation to the Board of
Trustees and the public for their input. The meeting was adjourned
at 9:50 P.M.
Respectfully submitted,
Lucie F. Harrell
Clerk to the Board