2020-03-05 PAG FinalPARTNERSHIP ADVISORY GROUP
MARCH 5, 2020 MEETING PAGE 1
ASSEMBLY
The Partnership Advisory Group met for a meeting on Thursday, March 5, 2020, at 5:30 p.m. in the
Andre' Mallette Training Rooms at the New Hanover County Government Center, 230 Government Center
Drive, Wilmington, North Carolina.
Members present: Co -Chair Barbara Biehner; Co -Chair Spence Broadhurst; Vice Co -Chair Bill Cameron;
Vice Co -Chair Dr. Joseph Pino; Members: Dr. Virginia Adams; Evelyn Bryant; Robert Campbell; Chris Coudriet;
Cedric Dickerson; Brian Eckel; Hannah Gage; John Gizdic; Dr. Sandra Hall; Tony McGhee; Dr. Mary Rudyk; Dr.
Rob Shakar; Jason Thompson; Meade Van Pelt; and David Williams.
Members participating via telephone: Dr. Michael Papagikos
Member absent: Jack Fuller
Staff present: County Attorney Wanda Copley; Clerk to the Board Kymberleigh G. Crowell; Assistant
County Manager Tufanna Bradley; Chief Communications Officer Jessica Loeper; Budget Officer Sheryl Kelly;
Intergovernmental Affairs Coordinator Tim Buckland; New Hanover Regional Medical Center (NHRMC) Director
of Marketing and Public Relations Carolyn Fisher; NHRMC Chief Strategy Officer Kristy Hubard; NHRMC
Executive Vice -President and Chief Financial Officer Ed 011ie; Joseph Kahn, Shareholder with Hall Render and
outside counsel for NHRMC; Ryal W. Tayloe, Attorney with Ward and Smith and outside counsel for NHRMC;
Bryan Burgett, Director with Navigant; Eb LeMaster, Managing Director with Ponder & Company.
Co -Chair Broadhurst called the meeting to order, thanked everyone for being present, and provided a
brief overview of the meeting agenda.
APPROVAL OF MINUTES
Member Gage MOVED, SECONDED by Member Williams to approve the February 20, 2020 minutes as
presented. Upon vote, the MOTION CARRIED UNANIMOUSLY.
REQUEST FOR PROPOSAL (RFP) NON -DISCLOSURE AGREEMENT LOG (SLIDE 5)
Co -Chair Broadhurst reviewed slide 5 of the presentation noting it is the updated list as of today. Nine
organizations have executed the non -disclosure agreement (NDA), one organization has requested the NDA,
eight organizations have indicated a potential interest, twelve organizations have declined to participate, and
two organizations have been contacted, but there has been no further discussion.
LONG RANGE FINANCIAL PLAN RECAP (SLIDE 7)
Eb LeMaster reviewed slide 7 stating this is a summary review of the presentation from the last
meeting. As to the question of what could be borrowed, Mr. LeMaster stated if it is looked at in a different way
recalling that the total capital plan, maintenance capital and strategic, was about $1.7 billion over the time
period, the existing gaps were identified at just under $500 million. While it could be said that you could afford
$1.2 billion of the $1.7 billion, the challenge with that is there is maintenance capital estimated at $700 million
over the period. In thinking about $1.7 billion total and if that was reduced by the maintenance capital that has
to be spent regardless, what is reached is approximately $1 billion of strategic plans. The problem is if the
decision is made to reduce capital spending by $500 million, that means a 50% cut to the strategic portion. If
the strategic portion of the whole master facility plan is $1 billion and it is reduced by $500 million, there will
be real ramifications on the projections. One could argue to fund $1.2 million, but the issue is if that is cut back
the projections will suffer because the money is not spent for those growth reasons and the cash flow being
produced will be affected. It is a complicated situation. The focus was what does it take to fund the master
facility plan, but then going at it from a perspective of what can be afforded. It gets very difficult to pull apart
the master facility plan as they are pieces that have been put together and are supportive of their projections.
By pulling pieces out, the projections are going to suffer as well.
Co -Chair Broadhurst opened the floor to discussion.
Regarding how Medicaid expansion would affect the NHRMC bottom line, Member Gizdic stated there
is not a lot of definitive information to quantify it. However, a study from the North Carolina Justice Center
from about a year ago showed at the peak of the expansion which would be year three, the hospital could
expect a $14.1 million annual increase in reimbursement from Medicaid as a result. The study went on to say
it does not include the cost of Medicaid expansion, which under the proposal that was modeled, was going to
be funded by hospitals. There was no definitive portion for NHRMC, but the expectation to run it yearly is about
several million dollars and to leverage federal dollars, the state was going to make hospitals contribute to
match the federal funds. It is not very well vetted, but it could be estimated at $8 to $10 million per year as the
best case scenario.
In response to questions about whether the land that NHRMC is located on and the other locations
that can be leveraged as collateral to borrow funds, Mr. LeMaster stated the main factors for the credit
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worthiness implicit in NHRMC's operations today is that there is some level of control of the land and facilities
already. Which means there is already real value in the cash flowing capability and is what the rating agencies
are already looking at. It might help in some of the specific structures that could be used or debt outlets, but
really changing the overall picture would not be dramatic because rating agencies assume the hospital has
some level of control of that to run the business already. Member Gizdic explained when NHRMC goes to a
bond issuance, Moody's, Standard and Poor's (S&P) and Fitch do not care about the assets. They care about
the revenue stream and profitability in looking at the creditworthiness of NHRMC. Essentially, as NHRMC goes
through the County, NHRMC has to pledge revenue stream and profitability to secure the bonds. The rating
agencies and those issuing the debt assume the assets to generate the revenue stream and profitability are
there. Mr. 011ie stated that selling or leveraging assets on the balance sheets does not improve the credibility
in terms of how the organization is seen because an asset that was unencumbered is now encumbered, so the
debt has been increased on the asset. There is only a certain amount of debt capacity before levers are tripped.
When saying there is a debt capacity today of $150 million and assets are starting to be leveraged and
encumbered, it is still at $150 million and does not get better than that.
In regards to debt and partnership possibilities whether it enables partners to co-sign on the loans
without necessarily causing the partner to have to put money on table, Mr. LeMaster stated the short answer
is yes. What they are willing to do changes from the least to most integrated. If it is the most integrated, they
in effect assume the debt. In between, they could joint venture and guarantee the debt on the joint venture
with the hospital. There are a lot of options that have different ramifications. Accessing their creditworthiness
would be the potential benefit. It could be leveraging their strength or position in addition to NHRMC could
amplify access.
In response to questions if it is possible to expand on the existing partnerships in the current state to
get more and how far can the partnerships be pushed to receive more and whether it would offset the shortfall,
Member Gizdic stated that is what will be discovered through this process. To ask that question to go beyond
the existing level of partnerships, the same current process would have to be followed. There is the possibility
to hear back from those certain partnerships, if they respond, how they could add to and supplement the
existing partnership. Regarding whether NHRMC has gone as far as possible with partnerships without County
Commissioner approval and if it now needs approval to go to the next level, Member Gizdic responded that
County Commissioner approval is required to go beyond the current level of partnerships.
Regarding whether there have been attempts to renegotiate any of the output for any of the services
in order to get a better deal, Member Gizdic stated there is an annual fee to access for example bulk and capital
purchasing, etc. It is not a significant fee and very small margins. The question is how to leverage relationships
to get additional resources.
In response to questions about when the RFP responses are received whether that will provide a
clearer picture if the partnerships are leveraged and what they want in return, Member Gizdic responded he
would expect whatever they propose will include what they will offer NHRMC as well as their expectations in
return. It should be clearly outlined in the responses as that is the way the RFP was structured in section 11.
RANGE OF OPTIONS (SLIDES 9 —13)
Co -Chair Biehner stated Mr. Kahn will review the options of governance structure. Mr. Kahn stated
the review will build on the previous conversations that just took place. He reviewed slide 9 of the matrix of
options. The goal is to do a reset on all of the scenarios that have been discussed the last few weeks and then
have an open dialogue. He then reviewed slide 10 regarding the range of options with respect to governance
and organizational structure. In the first two columns, there would be no governance changes even with new
contractual partnerships. In moving towards the middle area there are changes in governance. In the two
middle columns the governance structure will change, but with no new equity partner. Moving further to the
right is the possibility of a minority equity partner or a majority equity partner, but still having some element
of local investment and local ownership of the facilities. The implications under each option are listed on the
slide.
In response to questions about a minority or majority partner and what the difference is in the
authority or level of management in the agreements, Mr. Kahn stated it depends on how it is negotiated. A
management agreement can be relatively straightforward and simple where a president or CEO is assigned to
the organization and provide some back office function support all the way to how NHRMC is operated now,
where the hospital runs the show but still has to come to the County for approval on certain items or actions.
Even within a management agreement, it can cover the spectrum which might be seen in some or all of the
responses. The extent to which that management agreement shifts control is also going to impact the scope of
benefits that can be obtained as a result. It does not mean a better deal will be made, but the level of benefits
that the partner can bring is likely going to depend on the amount of control they have over the organization.
Regarding the ownership of assets under a minority or majority partner, Mr. Kahn stated it relates to
a change in governance. Consider it like a hospital authority or SystemCo that is the new entity under the new
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governance structure. Where there is a minority JV partner, the new entity, i.e. SystemCo or a hospital
authority but still NHRMC, would have the majority ownership interest in the assets and the partner would
have the minority and in the next column it is flipped. As to whether an entity could come in with a minority
JV, but be able to manage locally more than the majority percentage entity of, for example, SystemCo, Mr.
Kahn stated it depends. It would be expected with a 75% position that one would still retain a lot of voice in
the kind of decisions noted in the footnotes of the slide. However, often these kind of minority positions are
coupled with a management agreement and it's the coupling that would effectively put the minority partner
in day to day operational control even though they're in the minority position. Between the minority ownership
interest coupled with the comprehensive management agreement, they would have a significant voice and
probably more so than they would in a traditional 75/25 split for the minority. It does not mean that is how it
has to be, but there are certain models where that is the case. Mr. Kahn stated the point was to acknowledge
that once an equity partner is brought in, there is a spectrum even within the last three columns on the slide
within which local control will vary, and it can be negotiated. There are very few issues that will be discussed
that are absolutely dictated by the structure. It is all up for negotiation within the models. NHRMC could end
up in a minority position, but negotiate significant reserve powers, which is not unheard of. NHRMC could be
in the majority position, but effectively cede significant amount of authority to the minority partner. It goes
back to what is being negotiated and what NHRMC is getting and willing to give up under each of the models.
It has to be remembered there are different priorities within this and at some point there will be decisions to
make as part of the negotiations to find a middle ground to strike a balance where it is a win-win for both
parties.
In review of slide 11 Mr. Kahn stated that in regards to access to capital, with no change in governance
and no new partner, there is going to be very little change to the borrowing power. In moving forward with
changes in governance, as discussed in previous meetings, there is some flexibility for the hospital to borrow if
it is not tied and linked exclusively to the County, as well as the ability to expand outside the County and then
leverage those assets, resources, and revenue streams for expanded borrowing purposes. A change in
governance does unlock the access to additional capital or has the potential to. If partners are brought in at
either the majority or minority level, there is even greater potential access to capital. Moving all the way to a
member substitution or sale or merger brings the full purse of the partner to bear on the community, with
compromises that would likely come with that, but the full economic power of the partner is achieved.
In response to questions about what has been seen in the management agreements that can control
agreed upon quality, access, cost, and tools to ensure that, Mr. Kahn stated there are a number of different
tools that can be used, both economic and then what is called the "nuclear option," which is terminating the
agreement. From an economic perspective, there can be financial incentives for the manager if they achieve
certain quality metrics, access to care metrics, or health equity metrics. It can be negotiated and these would
more likely than not be updated on a somewhat of a regular basis every few years. The parties would come
together and negotiate the new set of metrics against which the manager will be evaluated. They would either
have the ability to earn a kicker on the management fee or there would be a withhold on that management
fee that they would only be entitled to if they hit those metrics and there could even be combinations. The key
is to create the obligations and then create the accountability, which an effective contract would include both.
There needs to be enough of an upside for the manager to make it worth their while to invest in the resources
that would take to achieve those metrics. There has to be a balance for both sides, but accountability is the
key to a contract.
Regarding questions about if under the current governance structure whether it hinders NHRMC's
ability to diversify things, Member Gizdic stated yes. In looking at some of the innovative ideas that come out
of the medical staff and that are coming out of the innovation center, the ability and the restrictions the current
structure has on being able to put a for-profit company in place and actually produce a new widget, for
example, and be able to take that to market is currently restricted. With some restructuring, there could be
the ability to have more flexibility to drop a for-profit subsidiary corporation and do some of those activities to
diversify revenue streams and other things through it. With the current structure, NHRMC is restricted from
doing that. Mr. Kahn stated while there are contractual partnerships such as what is being described, what is
seen even more throughout the country are more equity partnerships that many health systems are developing
venture funds. It is for-profit drop down affiliates that are essentially venture capital organizations and they
are seeding startups in the healthcare space and taking an equity position in those startups, often a very small
equity position of 5 to 10 percent. It is done usually in alignment with that health system strategy so that if the
startup actually produces and comes through, they would be producing a product or providing a service that
would ultimately be in sync with the health system's needs. Again, the goal being a win-win. The startup wins
and the health system gets a new service line or a new product that it's having trouble procuring at the moment
with the investment interest in it. It is that level that health systems around the country, including many in
North Carolina, are pursuing. It is a strategy that they are pursuing. The alternative has nothing to do with just
the brick and mortar four walls, health care provider. It is innovation taken to the next level through equity
ownership venture capital investments. It is that strategy he thinks Member Gizdic is alluding to that the
hospital is somewhat restricted from pursuing in line with what many of NHRMC's competitors and peers are
throughout the country.
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Regarding questions about using certain types of income to increase the margin, Mr. Kahn stated there
are a few different concepts being referenced. If NHRMC were to restructure and still be in a not-for-profit
scenario with tax exempt bond financing, there is a limit to use tax exempt bond finance resources in
furtherance of a for-profit enterprise. It gets into a whole other conversation depending on which metric is
being used in terms of unrelated business income. There would be limits to what could be invested, but even
5% of NHRMC's investments is a significant amount of money. Again, that investment wouldn't necessarily be
designed to try to materially increase the revenue stream. It is just like most other investment vehicles where
you are betting on a positive return in the future. For example, if you invest the 5% in the startup and it
becomes a unicorn there is now a marketable investment that can be sold, and that is the return at that point
and the money could be pulled out and allocated to the community. That is where the return or value
proposition is and health systems see it as a win on both sides. More often than not, those health systems are
investing in startup companies that are looking to provide a product or service that the hospital needs. So if
the startup wins, not only have they achieved a positive return on their investment, but they have also
addressed a service or product need that they are unable to address elsewhere in the market, and so they get
a win on both sides of the ledger.
In regards to questions about whether NHRMC has any management agreements whereby it has to
perform at a certain level, Member Coudriet said there are not any around overall performance. The
agreement basically says that NHRMC 501(c)(3) would comply with the lease and there are restrictions in it,
but nothing that specific. Member Campbell stated there was a previous meeting where Member Thompson
said the Commissioners assign people to the NHRMC Board of Trustees which was not always a great thing
because sometimes the NHRMC Board of Trustees is not getting the skills it needs. He is trying to get to the
question of if the organization went to a different governance structure it might give more flexibility for the
hospital to do some things that they are not currently able to do. The other thing is there nothing ensuring the
results that are being achieved and there is a dependency on the efficiency of the team, which seems to him
not a great position. He would rather have something to hold people accountable to.
Mr. Kahn continued his presentation stating that there starts to be a trend seen in moving across the
matrix to the right. The possibility of access to capital improves the ability to then increase the service area and
increase access points. It improves not just because of the access to more capital, but because under the
reconfigured governance structure more likely than not, there is not a limitation to just within the borders of
New Hanover County. It can expand beyond those borders and improve the access points to the seven counties.
As the geographic limitations currently applicable to the hospital are reduced and access to funds are increased,
the ability to address the health needs of those seven counties goes up and continues to do so, in moving along
across the spectrum.
In response to questions about where a private not-for-profit option fits as far as access to capital, Mr.
Kahn stated it could start with the 3rd column. If the hospital were to convert to a private 501(c)(3), that would
increase the opportunity to seek financing in the market, but not just on its own. The change in and of itself
would not necessarily increase the borrowing capacity, but the ability to go outside the County and start to
accrue assets that generate new revenue streams that increase the borrowing power which is where the access
point comes in financially in that 501(c)(3) model. It does not expand borrowing capacity in and of itself. It is
really how the new structure is leveraged that would determine it and could take time depending on the
strategy deployed.
Slide 12 unpacks everything a little more from slide 9 to show the expansion of the service offerings
and the ability to address health equity issues. Again, in moving move towards the right on the slide, and
bringing in both changes of structure coupled potentially with changes in partnership, whether its contractual
or equity the opportunity to expand the services that are provided here and to address the health equity needs
of the community go up as compared to status quo. To what extent that occurs can vary significantly across
the spectrum and it is a matter of the terms that are negotiated in any partnership or equity model. Finally,
obtaining operational scale and efficiency go hand in hand to the extent scale is increased. What is increasing
more likely than not is the level of service that can be provided and increasing access points that are better
positioned to address health equity. In moving down the spectrum, reconfiguring into a 501(c)(3) would allow
the ability to scale at a level that is currently impossible for NHRMC to do under its current governance model.
Once starting to partner with a third party, either on a minority or majority level, the ability to scale is just
compounded by the resources that the partner can bring to bear in furtherance of the expansion.
Regarding the earlier question of if the PAG is exploring independence or is it proving NHRMC cannot
remain independent and one of the answers was it depends on a person's definition of independence, Member
Gizdic stated he would like to hear the PAG members' thoughts on what does independent mean. If considering
the current structure and current situation for NHRMC as independent and in looking at the chart on slide 10,
that is what he would relate independence to. Discussion was held amongst the members about there being
different aspects to independence including shareholders and geographical aspects. Mr. Kahn stated that in
his opinion, the single key ingredient to a successful transaction is compatibility from a personality cultural fit,
and cultural can be a loaded word. The best deal in the world can be put together on paper, but if the two
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parties do not come together with a common vision and a common purpose with a common perspective on
how things should be done, then it is never going to work. It does not matter what is put in the contract, it is
just not going to work. As the proposals come in, the terms on the paper are going to be incredibly important,
but so will the interviews and interface the members have with the potential partners. Figuring out who that
partner is who shares a common vision with this community and this organization and regardless of where they
fit in on the spectrum of integration, that they are coming in lockstep with the community and the direction
that the organization has been moving in is critically important.
Member Dickerson stated when discussing NHRMC as a regional hospital and that it represents seven
counties, he thinks there is a perception in the public that the expense part is being dragged down by those
counties that were ranked 94th, etc. In the last meeting, he was enlightened that 50% of the revenue comes
from those counties. In some ways, they are looked at as an expense, but not a contributor and that perspective
has to change. Member Gizdic stated that is a great perspective to have because NHRMC has the amazing
physicians and services because of that entire population. NHRMC is fortunate to have those in our community
and it is because there is a large enough population to drive those services and support the physicians in those
services and market. In his looking at the chart and NHRMC's current situation, local control being the county
or local citizens can be debated. There are a lot of columns that say 100% local control and 100% local
ownership, but the question is at what point is it not independent.
Further discussion was held regarding members' definition of independence. Member Gizdic stated
he does not think there is a right or wrong answer, but he made the mistake of assuming everyone had the
same definition of independence as him. When the question was asked, it caused him to think about the fact
that everyone has a different definition. It is a great discussion to have as proposals are received and what it
means for NHRMC. Mr. Kahn stated independence, as it is being discussed, could be categorized into different
areas. It could be thought of in tiers where there is a certain level of decisions that you may have autonomy
for and then there is the next level of decisions for which someone has a veto right, and another level of
decisions where you actually have to seek approval in order to do or stop doing something. In thinking about
it in that manner, it is not just all or nothing of having independence or not. There may be models that are
reflected in the proposals where independence is reflected at different tier levels. If there is anything to take
away from the matrix, it is that there are a number of different combinations or permutations out there and it
is not all or nothing and there is a lot in between that can, even within the categories, take different levels.
In response to questions about providing a perspective of why the management agreement offered
by Atrium approximately ten years ago was voted down and what was offered in the management agreement,
Member Thompson stated he voted on it while he was a County Commissioner and could speak to it. There
were three positions, the CEO, COO, and the CFO, that Atrium wanted a management agreement where those
people basically were on the payroll of Atrium. In the end he voted no, along with a majority of the board, to
move forward because while Atrium at that time was going to hold in New Hanover County and its insureds
harmless, the bottom-line was doing that agreement would have allowed the hospital to bill at the rates that
Atrium got for everything. It was a net revenue gain for the hospital, but at the end the day who was going to
pay for that would be all the individual citizens of the County through their insurance premiums. Therefore, it
is a de facto tax increase. He and a majority of the board voted no because even though the reality was people
probably would have never drilled down and thought of it that way, that is how they looked at it and their
fiduciary responsibility was to the citizens therefore, they could not agree to the agreement. In the end, a new
agreement was reached with Atrium, which actually turned out to be better for the hospital and was still
neutral for the County residents. Regarding whether it was local control that would be maintained or if Atrium
was going to have control, Member Thompson stated it was a hybrid situation in that the three positions he
mentioned would be beholden to both and that was the crux of how could he, as a County Commissioner,
expect those positions to obtain some policy with Atrium writing their paychecks. He confirmed there was also
financial consequences to the County in the amount of $9 million, whether annually or over the course of the
contract he does not remember, if Atrium's direction was not followed. There was also no control over what
Atrium did. Regarding the independence question, Member Thompson stated for him as a trustee it is the
ability to direct management with policy and not have to go somewhere else to ask for permission to do so.
The discussion about delegation of authority and decision making to him is a separate issue and that's about
centralization or decentralization of the hierarchy of command or structure in the actual business units. To
him, local control is appointing people to the board who live in this community where they set the policy and
management executes without the layer of a lot of things can be done, but if they want to put an urgent care
in another county, they have to ask the New Hanover County Commissioners for permission.
KEY PROPOSAL ELEMENTS DISCUSSION (SLIDES 15 — 20)
Mr. Burgett reviewed slide 15 and stated PAG members asked for a map of the proposals from the
standpoint of a summary form and keeping it simple. Support staff developed the concept of key proposal
elements (KPEs). What will be reviewed will be the form to be used by the support staff when it reports out to
the PAG, along with an associated scoring mechanism of which members' feedback is desired. He noted that
the proposals returned may be very complicated documents, so the KPEs are to assist with what is seen in the
proposals. In reviewing slides 16 and 17, he explained support staff tried to map the KPEs back to the goals and
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objectives. In reviewing the slides, it will be seen where the KPEs relate back to each goal and objective that
were developed earlier in the process. In looking at the summary approach, the KPEs are connected to the key
takeaways from the last three meetings and some are directly mapping onto the strategic needs. For example,
the goal and objective of improving access to care and wellness, the KPE is the expansion and reconfiguration
of facilities and then the ambulatory network development. As it was requested that this be made as summary
as possibly, some of the concepts are lumped together with the individual areas being discussed in later
meetings.
In response to questions about the goal and objective of achieving health equity and how it is not
defined enough with the summary of "fulfills commitment to mission...", Mr. Burgett responded that it is a
complex goal. He thinks the summary approach comment is basically a commentary on what the purpose is of
NHRMC. Mr. Gizdic stated to just say "full-scale health equity program" is an understatement because there
are many factors and variables involved. He thinks the specific statement "fulfills commitment to mission and
serving all regardless of ability to pay" is code for charity care, the collection policies, and making sure that the
community does not see any reduced access due to the ability to pay. It is making sure that it is not just about
charity care, but the collection policies as well such as if somebody is much more aggressive and collecting, if
they are going to put liens on people's houses, things that NHRMC does not do today. We want to make sure
because that can be discriminatory and can really play into the equity of access and people accessing and
feeling comfortable getting services. In thinking about NHRMC's mission, leading the community to
outstanding health is really what health equity is about, regardless of charity care and everything else. It is
about how do we reduce and eliminate the disparities that are in this community when it comes to health and
address those. Mr. Burgett stated the question shows the disadvantages of this approach to try to do things in
a summation format. Healthcare is a complicated endeavor, the RFP is complicated, and there will be a lot to
discuss. Of the six or eight proposals that might be received, each one could be about 200 pages long, which is
a lot of information. He thinks the PAG's idea was to start this discussion to give a lay of the land and this is a
starting point leading to a much more detailed discussion. It is a much more in depth process, but again the
summary is a first step in the process and is to give members the quick reaction from the support staff of what
is being seen in the proposals.
In regards to questions on the scoring, Mr. Burgett stated as can be seen on slides 18 and 19, while
quantitative, support staff used Harvey balls instead of a numeric scoring. The RFP questions have also been
mapped to the KPEs. The full dark circle scoring means that the respondent provided a good answer and an
empty circle is the opposite. He thinks some text will be put next to them to unpack it a bit more, so it will not
just be a Harvey ball. He reviewed slide 20 which shows what each Harvey ball represents in regards to scoring.
As to what the merits are of doing this, Mr. Burgett stated he thinks the art of the KPEs is if there were only
three or four KPEs, there would not be enough meaningful distinction between them and all the scoring might
be too similar. Having too many gets away from the idea of trying to make this simpler in summary. The decision
was made on 18 and it was thought this was the right number. He thinks this will allow the members to debate
and have discussions based on a score. In response to questions about who will do the initial scoring, Mr.
Burgett responded that the support team will. It will be a first take on the proposals purely from the support
team's point of view and there will several meetings to walk through the proposals. If members want to go
back to revisit the scoring and find it is a useful exercise, the support staff would be happy to do that. Rather
than getting wrapped up in the scoring and the Harvey balls, he would like to see the PAG spending its time
having a real dialogue about the quality of the proposals and what concerns the members.
In response to questions about being able to speak with the respondents, Mr. Burgett stated if there
are proposals that are of interest, then support staff would probably recommend getting into a phase of more
due diligence. At that point, site visits could be made to health systems, hospitals, or facilities that used to be
independent that have joined the system. They could visit the headquarters to meet senior staff, physicians,
and have board member to board member and physician to physician discussions. This is just scratching the
surface of the due diligence that could be done. A brief discussion was held about due diligence steps. Mr.
Burgett reiterated that he thinks in reviewing the proposals, some proposals will rise to the top and generally
there will be consensus around what the most important issues are, which could then lead to negotiation. If
there are a number of organizations with promising proposals but there were questions about them, then
there could be a series of clarification requests sent to the respondents. The next step would be to narrow it
down and that is where you could actually begin to negotiate, there could be negotiations of multiple letters
of intent orjust with one party. It basically is taking everything in the proposal, putting it into a document that
is going to be the blueprint for a definitive agreement, and becomes the territory of what is negotiable at that
point.
Regarding how to weight the 18 categories, Mr. Burgett stated he thinks the discussion has come up
before and explained it is all somewhat relative to the observer and he personally thinks all 18 are essential.
However, the reality is one does not get everything in a negotiation. The PAG has to determine the priorities,
it is not something he is comfortable for the support team to do. Co -Chair Broadhurst stated he agrees with
Mr. Burgett that all 18 are essential and the PAG can direct this however it chooses. The support staff is
providing the format and information, but the PAG is going to decide how it proceeds. The conversations will
PARTNERSHIP ADVISORY GROUP
MARCH 5, 2020 MEETING PAGE 7
be held after the proposals are received and reviewed and see if there are any proposals that rise to the top
that make the decision making process easier. After further discussion, there was a general consensus of the
members that the 18 KPEs are appropriate.
NEXT STEPS (SLIDE 22)
Co -Chair Biehner stated there are four more meetings scheduled and reviewed the next steps on slide
22. Meeting #11 will not have a lot of homework since there will be an overview of the respondents and looking
at very basic high level responses. Meeting #12 will be looking at the KPEs relative to each of the proposals and
establish focus for further review. There will be material to read in preparation for the meeting. In meetings
#13 and #14, there will be more detailed reviews of the respondents and more time will be spent getting into
the actual documents. As a reminder, a lot of the information is confidential until it gets redacted and it is
appropriate that it takes out the confidential information of the respondents. There will also be a summary of
NHRMC that will look like the summaries of the respondents.
A brief discussion was held about the closed session process once the proposals are received. Co -Chair
Broadhurst stated the PAG has made a commitment to discuss and deliberate matters in public, but over the
next two meetings there are going to be portions that have to be handled in closed session as some of the
deliberations are going to deal with aspects of the responses that are proprietary. Mr. Kahn stated he does
think the expectation is that the bulk, if not all of the meetings where the pros and cons of the proposals are
being discussed, in the legal team's opinion, would be in closed session while recognizing the priority of having
transparency wherever possible. He thinks comments made by members were also appropriate of how there
has to be a balance in terms of protecting the PAG, the hospital's and County's strategic positions, and the
ability to negotiate on equal footing. Member Gizdic reminded the members that the responses will not be
made public until March 30th. A brief discussion was held about how to proceed at the next meeting to move
into closed session from open session. Co -Chair Biehner stated that information on the public hearing on the
responses will be released in the near future and is slated for April 13th at 6:00 p.m. at the New Hanover County
Historic Courthouse.
CLOSING REMARKS AND ADJOURNMENT
There being no further business, Co -Chair Biehner adjourned the meeting at 7:30 p.m.
Respectfully submitted,
/Kymberleigh G. Crowell/
Kymberleigh G. Crowell
Clerk to the Board
Please note the above minutes are not a verbatim record of the Partnership Advisory Group meeting. Meeting
materials associated with this meeting are included as attachments to these minutes for reference.
G0 X)N�Y
11 O `
N New Hanover S
�1 Regional Medical Center 3y
\s
\�BLIS771�
121
Section
1. Approval of Minutes
2. RFP Non -Disclosure Agreement Log
3. Long -Range Financial Plan Recap
4. Range of Options
5. Key Proposal Elements
6. Next Steps
7. Closing Remarks
Appendix
2
Page Number
3
4
6
8
14
21
23
25
NNew Hanover=I
11 Regional Medical Center
�OVAL OF MINUTES
New Hanover
11 Regional Medical Center
New Hanover
11 Regional Medical Center
NON -DISCLOSURE AGREEMENT
2 Organizations
Google
WakeMed
12 Organizations
Advocate Health Care
Carilion Clinic
Cleveland Clinic*
Geisinger
Haven
Intermountain
Healthcare
Johns Hopkins
Medicine
Juniper Advisory
Kaiser Permanente
Mayo Clinic
Universal Health
Services (UHS)
Virginia Mason
*Cleveland Clinic declined to participate after executing NDA
5
8 Organizations
AGRA Capital
Ascension Health
BlueCross BlueShield
of North Carolina
Citi on behalf of
Vidant Health
Cone Health
Flagstone Heritage
Hospital Acquisition
Services
Pontus Capital
1 Organization
Sentara Healthcare
9 Organizations
::Atrium Health
Bon Secours Mercy
Health
Duke Health
HCA Healthcare
LifePoint Health
Novant Health
Optum
UNC Health Care
Trinity Health (MI)
IIN New Hanover=I
11 Regional Medical Center
New Hanover
11 Regional Medical Center
..7 -RANGE FINANCIAL PLAN RECAP
• NHRMC has generated strong revenue growth and stable margins over the past decade, exceeding
industry averages
• Management forecasts continued strong revenue growth but with a decline in future margins, but still above
`A' category median levels assuming cost savings are achieved
• Addressing robust regional growth is a strategic imperative, requiring significant capital spending
• Capital spending outpaces operating cash flow, thus stressing the balance sheet
• This period of stress occurs at a time when hospitals face increasing industry uncertainty and risk such as
potential threats identified, CON repeal, payor mix trends and other potential challenges
• Under the current structure it is very challenging and potentially meaningfully more expensive to execute
the strategic plan outside the County, therefore not likely a viable option
• One alternative is to increase property taxes; up to 21 % to fund existing financial gaps and up to 68%
including potential threats
7 N New Hanover=I
�1 Regional Medical Center
-:")'E OF OPTIONS
New Hanover
11 Regional Medical Center
Control:
100% local
NHC Commissioners
have full oversight &
board appointment
No new flexibility to
borrow
No new access to capital
from partner
No new flexibility to invest
in other counties
No new resources from
partner to expand access
points
No new flexibility to
borrow or invest in other
counties
No new resources from
partner to expand
services & offerings
Control:
100% local
NHC Commissioners
have full oversight &
board appointment
No new flexibility to
borrow
Partner brings access to
capital based on
agreement terms
No new flexibility to invest
in other counties
Partner brings new
resources to expand
access points based on
agreement terms
No new flexibility to
borrow or invest in other
counties
Partner brings new
resources to expand
services & offerings
based on agreement
terms
Ownership:
100% local
New local entity may own
assets
Entity responsible if
financial shortfalls
Control:
100% local
NHC Commissioners'
level of oversight & board
appointment dependent
on model
New flexibility to borrow
No new access to capital
from partner
New flexibility to invest in
other counties
No new resources from
partner to expand access
points
New flexibility to borrow
and invest in other
counties
No new resources from
partner to expand
services & offerings
No new flexibility to work No new flexibility to work New flexibility to work as
as system as system system
No new access from Partner provides new No new access from
partner to scale, access to scale, partner to scale,
efficiency, expertise efficiency, expertise efficiency, expertise
based on agreement
terms
Ownership
100% local
New local entity may own
assets
Entity responsible if
financial shortfalls
Control:
100% local
NHC Commissioners'
level of oversight & board
appointment dependent
on model
Ownership:
Majority (51-100%) local
New local entity may own
majority assets
Entity & minority partner
may share responsibility
if financial shortfall
Control:
Majority (51-100%) local
NHC Commissioners'
level of oversight & board
appointment dependent
AL n model and agreement
Structure:
System
New flexibility to borrow New flexibility to borrow
Partner brings access to Minority partner brings
capital based on access to capital based
agreement terms on agreement terms
New flexibility to invest in
other counties
Partner brings new
resources to expand
access points based on
agreement terms
New flexibility to borrow
and invest in other
counties
Partner brings new
resources to expand
services & offerings
based on agreement
terms
New flexibility to work as
system
Partner provides new
access to scale,
efficiency, expertise
based on agreement
terms
New flexibility to invest in
other counties
Minority partner brings
new resources to expand
access points based on
agreement terms
New flexibility to borrow
and invest in other
counties
Minority partner brings
new resources to expand
services & offerings
based on agreement
terms
New flexibility to work as
system
Minority partner provides
new access to scale,
efficiency, expertise
based on agreement
terms
Ownership:
Minority (1-49%) local
New local entity may own
minority assets
Entity and majority
partner share
responsibility if financial
shortfall
Control:
Minority (1-49%) local
NHC Commissioners'
level of oversight & board
appointment dependent
n model and agreement
AL
Structure:
Integrated with majority
partner
Ownership:
Loss of ownership
New owner has full
responsibility if financial
shortfall
Control:
Limited
Local oversight & board
appointment dependent
on agreement
New flexibility to borrow Owner controls borrowing
Majority partner brings Owner brings access to
access to capital based capital based on
on agreement terms agreement terms
New flexibility to invest in
other counties
Majority partner brings
new resources to expand
access points based on
agreement terms
New flexibility to borrow
and invest in other
counties
Majority partner brings
new resources to expand
services & offerings
based on agreement
terms
New flexibility to work as
system
Majority partner provides
new access to scale,
efficiency, expertise
based on agreement
terms
Owner controls
investments
Owner brings new
resources to expand
access points based on
agreement terms
Owner controls borrowing
and investments
Owner brings new
resources to expand
services & offerings
based on agreement
terms
Owner controls system
operations
Owner provides new
access to scale,
efficiency, expertise
based on agreement
terms
• Change in governance options: parent company, hospital authority, community private not-for-profit
• Contractual partnership examples: Contractual agreement(s) for clinical services, clinical integrated networks, co-mgmt. agreements, management services agreements, lease arrangements
• Minority partnership examples: Service line joint ventures, joint venture support / management company, minority equity interest, joint operating agreement, joint operating company, lease arrangements
9 • Majority partnership examples: Majority ownership or equity into NHRMC system or entities within the system
• Areas of local control would be negotiated (e.g. physician contracts, service offerings)
Ownership:
• 100% local
• NHC owns
assets
• NHC
responsible if
financial
shortfalls
Control:
• 100% local
• NHC
Commissioners
have full
oversight &
board
appointment
Structure:
Hospital -centric
Ownership:
• 100% local
• NHC owns
assets
• NHC
responsible if
financial
shortfalls
Control:
• 100% local
• NHC
Commissioners
have full
oversight &
board
appointment
Structure:
Hospital -centric
Ownership:
• 100% local
• New local entity
may own assets
• Entity
responsible if
financial
shortfalls
Control:
• 100% local
• NHC
Commissioners'
level of oversight
& board
appointment
dependent on
model
Structure:
System
Ownership
• 100% local
• New local entity
may own assets
• Entity
responsible if
financial
shortfalls
Control:
• 100% local
• NHC
Commissioners'
level of
oversight &
board
appointment
dependent on
model
Structure:
System
Ownership:
• Majority (51-
100%) local
• New local entity
may own
majority assets
• Entity & minority
partner may
share
Ownership:
• Minority (1-49%)
local
• New local entity
may own
minority assets
• Entity and
majority partner
share
responsibility if responsibility if
financial shortfall financial shortfall
Control:
• Majority (51-
100%) local
• NHC
Commissioners'
level of
oversight &
board
appointment
dependent on
model and
agreement ♦
Structure:
System
Control:
• Minority (1-49%)
local
• NHC
Commissioners'
level of oversight
& board
appointment
dependent on
model and
agreement
Structure:
Integrated with
majority partner
Ownership:
• Loss of
ownership
• New owner has
full responsibility
if financial
shortfall
Control:
• Limited
• Local oversight
& board
appointment
dependent on
agreement
Structure:
Incorporated into
new system
• Change in governance options: parent company, hospital authority, community private not-for-profit
• Contractual partnership examples: Contractual agreement(s) for clinical services, clinical integrated networks, co-mgmt. agreements, management
services agreements, lease arrangements
• Minority partnership examples: Service line joint ventures, joint venture support / management company, minority equity interest, joint operating
agreement, joint operating company, lease arrangements
10 • Majority partnership examples: Majority ownership or equity into NHRMC system or entities within the system
♦ Areas of local control would be negotiated (e.g. physician contracts, service offerings)
No new flexibility
to borrow
No new access
to capital from
partner
No new flexibility
to invest in other
counties
No new
No new flexibility
to borrow
Partner brings
access to capital
based on
No new flexibility
to invest in other
counties
Partner brings
new resources
to expand
access points
based on
New flexibility to
borrow
No new access
to capital from
partner
New flexibility to
invest in other
counties
No new
• New flexibility to
borrow
• Partner brings
access to capital
based on
• New flexibility to
invest in other
counties
• Partner brings
new resources
to expand
access points
based on
New flexibility to
borrow
Minority partner
brings access to
capital based on
agreement
terms
New flexibility to
invest in other
counties
Minority partner
brings new
resources to
expand access
points based on
agreement
terms
• New flexibility to
borrow
• Majority partner
brings access to
capital based on
agreement
terms
• New flexibility to
invest in other
counties
• Majority partner
brings new
resources to
expand access
points based on
agreement
terms
• Owner controls
borrowing
• Owner brings
access to capital
based on
• Owner controls
investments
• Owner brings
new resources
to expand
access points
based on
• Change in governance options: parent company, hospital authority, community private not-for-profit
• Contractual partnership examples: Contractual agreement(s) for clinical services, clinical integrated networks, co-mgmt. agreements, management
services agreements, lease arrangements
• Minority partnership examples: Service line joint ventures, joint venture support / management company, minority equity interest, joint operating
agreement, joint operating company, lease arrangements
• Majority partnership examples: Majority ownership or equity into NHRMC system or entities within the system
♦ Areas of local control would be negotiated (e.g. physician contracts, service offerings)
11
No new flexibility
to borrow or
invest in other
counties
No new
resources from
partner to
expand services
& offerings
No new flexibility
to borrow or
invest in other
counties
Partner brings
new resources
to expand
services &
offerings based
on agreement
terms
No new flexibility • No new flexibility
to work as to work as
system
No new access
from partner to
scale, efficiency,
expertise
system
Partner provides
new access to
scale, efficiency,
expertise based
on agreement
terms
New flexibility to
borrow and
invest in other
counties
No new
resources from
partner to
expand services
& offerings
New flexibility to
work as system
No new access
from partner to
scale, efficiency,
expertise
• New flexibility to
borrow and
invest in other
counties
• Partner brings
new resources
to expand
services &
offerings based
on agreement
terms
• New flexibility to
work as system
• Partner provides
new access to
scale, efficiency,
expertise based
New flexibility to
borrow and
invest in other
counties
Minority partner
brings new
resources to
expand services
& offerings
based on
New flexibility to
work as system
Minority partner
provides new
access to scale,
efficiency,
expertise based
on agreement
terms
• New flexibility to
borrow and
invest in other
counties
• Majority partner
brings new
resources to
expand services
& offerings
based on
• New flexibility to
work as system
• Majority partner
provides new
access to scale,
efficiency,
expertise based
• Owner controls
borrowing and
investments
• Owner brings
new resources
to expand
services &
offerings based
on agreement
terms
• Owner controls
system
operations
• Owner provides
new access to
scale, efficiency,
expertise based
on agreement
terms
• Change in governance options: parent company, hospital authority, community private not-for-profit
• Contractual partnership examples: Contractual agreement(s) for clinical services, clinical integrated networks, co-mgmt. agreements, management
services agreements, lease arrangements
• Minority partnership examples: Service line joint ventures, joint venture support / management company, minority equity interest, joint operating
agreement, joint operating company, lease arrangements
• Majority partnership examples: Majority ownership or equity into NHRMC system or entities within the system
♦ Areas of local control would be negotiated (e.g. physician contracts, service offerings)
12
13 New Hanover
PROPOSAL ELEMENTS
New Hanover
11 Regional Medical Center
As the PAG evaluates RFP responses, it will be helpful to focus on key proposal elements (KPEs)
Key proposal elements (KPEs) were identified during PAG discussions of governance & legal organization
models, strategic needs, and long-range financial plans
The Key Proposal Elements are not designed to be comprehensive of all questions asked in the RFP.
Rather, they are designed to focus the PAG's initial review
To facilitate discussion of the Proposals and the legal organizational models discussed in meeting 7, the
PAG will receive a report -out that shows how each option addresses the KPEs
The PAG will also receive the full Proposals and proposal summaries
During today's discussion, the PAG will review and align on the KPEs
15 N New Hanover=I
�1 Regional Medical Center
1.
Expansion & Reconfiguration of
Strategic Need(s): Expansion & Reconfiguration of
Facilities
Facilities
Improving Access to Care and Wellness
2.
Ambulatory Network Development
Strategic Need(s): Ambulatory Network Development
3.
ACO and Health Plan Development
Strategic Need(s): ACO and Health Plan Development
Advancing the Value of the Care
4.
Information Technology & Digital
Strategic Need(s): Transparency; Consumer -Friendly
Solutions
Technology; Telemedicine Adoption; Technology Platform
Strategic Need(s): Full -Scale Health Equity Program;
Achieving Health Equity
5.
Full -Scale Health Equity Program
Fulfills commitment to mission and serving all regardless of
abilityto pay
6.
Avoiding Staff Shortages
Strategic Need(s): Avoiding Staff Shortages
Supporting our Staff
7.
Developing and Recruiting Talent and
Strategic Need(s): Developing and Recruiting Talent and
Expertise
Expertise
8.
Provider Needs
Strategic Need(s): Provider Needs
Partnering with Providers
9.
Engaging Independent Providers
Strategic Need(s): Engaging Independent Providers
Driving Quality Care Throughout the
10. Clinical Transformation
Strategic Need(s): Evidenced -Based Protocols; Care
Continuum
Coordination Across the Continuum
16
N New Hanover ( ;I
�1 Regional Medical Center \ i
Growing the Level and Scope of Care 11. Partnerships for Highly -Specialized Strategic Need(s): Partnerships for Highly -Specialized
Services Services
12. Financial performance benefits
Strategies to identify and capture synergies with potential
partner and preserve key existing financial drivers
Investing to Ensure the Long -Term
13. Addressing financial gaps and threats
Ability to fund strategic plan to address NHRMC's existing
Financial Security
financial gaps and potential threats
14. Total financial consideration
Total financial consideration commensurate to proposed
strategic partnership structure
Strategic Need(s): Integrated, Regional Health System;
Strategic Positioning
15. Integrated, Regional Health System
Broader desire to positively impact region's economic
status
16. Contemporary governance model
Barrier(s) identified by NHRMC BOT: Diplomatic Hurdles
17. Control at the local level
Preservation of majority control of the organization at the
Governance
local level
Barrier(s) identified by NHRMC BOT: Growth Outside the
18. Legal organizational model
County; Branding Inflexibility; Financing Opportunity;
Investment Limitations; Scale Limitations
17
N New Hanover=j
�1 Regional Medical Center
1. Expansion &
Reconfiguration of [to be completed]
Improving Access to Care Facilities
and Wellness
2. Ambulatory Network
[to be completed]
*�
Development
3. ACO and Health Plan
[to be completed]
Advancing the Value of the Development
[to be completed]
Care 4. Information
[to be completed]
Technology
�q
8 . Provider Needs
[to be completed]
O
O
Achieving Health Equity 5. Full -Scale Health
Equity Program
[to be completed]
5
9. Engaging Independent
[to be completed]
Q Q
Q
Providers
6. Avoiding Staff
[to be completed]
Shortages
Supporting our Staff 7. Developing and
Recruiting Talent and
[to be completed]
Expertise
�q
8 . Provider Needs
[to be completed]
O
O
Partnering with Providers
9. Engaging Independent
[to be completed]
Q Q
Q
Providers
Driving Quality Care 10. Clinical Transformation [to be completed]
Throughout the Continuum
18 N New Hanover=1
�1 Regional Medical Center
Growing the Level and 11. Partnerships for Highly-
F y
Scope of Care Specialized Services [to be completed] Q1 ,,i
Investing to Ensure the
Long -Term Financial
Security
Strategic Positioning
Governance
12. Financial performance [to be completed]
benefits
13. Addressing financial
gaps and threats
14. Total financial
consideration
15. Integrated, Regional
Health System
16. Contemporary
governance model
17. Control at the local
level
18. Legal organizational
model
Q1 QG- Q1
19 N New Hanover=I
11 Regional Medical Center
0
[to be completed]
!``J;;e'
Q1
[to be completed]
,
[to be completed]
[to be completed]
O
O
[to be completed]
Q1
Q1
[to be completed]
O
O
O
19 N New Hanover=I
11 Regional Medical Center
20 ■Ir New Hanover 1
11 Regional Medical Center'�,�;'
Relative to other proposals received, this organization's response addresses RFP questions related to this KPE in a
•compelling
manner, demonstrating (i) clarity of specific plans for NHRMC with qualitative and quantitative detail, (ii)
clear qualifications demonstrating the ability to deliver on those specific plans, and (iii) the willingness to be commit to
the community to deliver those specific plans.
Relative to other proposals received, this organization's response addresses RFP questions related to this KPE in a
comprehensive manner, providing a good level of explanation on (i) clarity of specific plans for NHRMC with qualitative
and quantitative detail, (ii) clear qualifications demonstrating the ability to deliver on those specific plans, and (iii) the
willingness to be commit to the community to deliver those specific plans.
Relative to other proposals received, this organization's response addresses RFP questions related to this KPE in an
adequate manner, providing some but not enough explanation on (i) clarity of specific plans for NHRMC with qualitative
and quantitative detail, (ii) clear qualifications demonstrating the ability to deliver on those specific plans, and (iii) the
willingness to be commit to the community to deliver those specific plans.
Relative to other proposals received, this organization's response does not address RFP questions related to this KPE
Oin
a clear manner, lacking sufficient explanation on (i) clarity of specific plans for NHRMC with qualitative and
quantitative detail, (ii) clear qualifications demonstrating the ability to deliver on those specific plans, and (iii) the
willingness to be commit to the community to deliver those specific plans.
ONo
response provided for this KPE.
20 ■Ir New Hanover 1
11 Regional Medical Center'�,�;'
STEPS
New Hanover
11 Regional Medical Center
#11: 3/19/2020
Meeting Topics
1. Respondent Overview
2. Selected Information of
Proposals Received
a) Transaction Structure
b) Financial Considerations
c) Scope of Proposal
Pre -Read: NA
Meeting Material. Respondent
Overview & Selected Proposal
Meetina #12: 3/26/2020
Meeting Topics
1. KPE Summary Review
2. Establish Focus for Further
Review
Pre -Read & Meeting Material: KPE
Summary
Meeting #13; 4/2/2020
FNEUKI NNOY18]
Meeting Topics
Detailed Proposal Review for
each Respondent
a) Review of proposal summary
b) Identification of follow-up and
clarifying questions
Pre -Read & Meeting Material.,
Abridged Proposal Summaries
Meetings Subject to NCGS 143-318.11(a)(1) and (a)(3), further based on Section 131E-97.3
F]As part of the initial review of the proposals before they are finalized for posting, the PAG will be consulting with legal counsel for NHRMC and the County to
address any portions of the proposals that may raise legal questions or that fall within exceptions to disclosure requirements under applicable North
Carolina law. The PAG will also be working with the Support Team to identify points within the proposals for which further clarification or explanations may
be needed, including issues and items falling within the scope of competitive healthcare information.
F]As the PAG begins to engage in deliberations regarding the proposals, the PAG will be considering, discussing and addressing issues of a proprietary
nature and matters that are competitive healthcare information under NCGS 131 E-97.3, including discussions related to issues that may become points of
negotiation as discussions with the Respondents continues. An important element of these deliberations will also involve the PAG reviewing these matters
with counsel for NHRMC and the County. In order to protect the best interests of NHRMC, the County, and the community, it is critically important that such
discussions be held in Closed Session in order to maintain NHRMC's and the County's ability to fairly and effectively engage with the Respondents
regarding the proposals.
22�
N New Hanover „(°I
11 Regional Medical Center �,�;'
':")'ING REMARKS
New Hanover
11 Regional Medical Center
Thank You
24New Hanover
Millie Regional Medical Center
:-NDIX
New Hanover
11 Regional Medical Center
In developing the RFP, the PAG approved 10 sets of goals and objectives to support NHRMC in fulfilling its mission.
From those goals and objectives, detailed questions were developed to determine how each proposal would impact
that area of focus.
These goals and objectives address specific strategic needs for NHRMC as it works to prepare for continuing
population growth and changes in the healthcare industry.
They fit into these five priorities:
1. Optimizing Governance and Organizational Structure
2. Accessing Capital to Fund Growth and Transition to Value
3. Expanding and Reconfiguring Geographic Footprint and Access Points of Care
4. Expanding Services and Offerings to Impact Health and Health Equity
5. Obtaining Operational Scale, Efficiency and Expertise
26 N New Hanover=I
�1 Regional Medical Center
The 18 KPEs map to NHRMC's priorities in the following way:
i Expanding and
Reconfiguring
Geographic Footprint
and Access Points of
Care
Expansion &
Reconfiguration of
Facilities; Ambulatory
Network Development
Expanding Services
and Offerings to
Impact Health and
Health Equity
Accessing Capital to Fund
Growth and Transition to
Value
Financial Performance Benefits;
Addressing Financial Gaps and
Threats; Total Financial
Consideration
27
ACO and Health Plan
Development; Information
Technology & Digital Solutions;
Health Equity; Avoiding Staff
Shortages; Developing &
Recruiting Talent and Expertise;
Provider Needs; Engaging
Independent Providers; Clinical
Transformation; Partnerships for
Highly -Specialized Services
NNew Hanover
11 Regional Medical center