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HomeMy WebLinkAbout2019-10-15 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 368 ASSEMBLY The New Hanover County Board of Commissioners met for a Special Meeting on Tuesday, October 15, 2019, at 4:00 p.m. in the School Auditorium at Snipes Elementary School, 2150 Chestnut Street, Wilmington, North Carolina. Members present: Chairman Jonathan Barfield, Jr.; Vice-Chairwoman Julia Olson-Boseman; Commissioner Patricia Kusek; Commissioner Woody White; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; County Attorney Wanda M. Copley; and Clerk to the Board Kymberleigh G. Crowell. PUBLIC HEARING TO RECEIVE COMMENTS RELATED TO THE RESOLUTION ADOPTED SEPTEMBER 16, 2019 BY THE BOARD OF COUNTY COMMISSIONERS THAT WILL ALLOW NEW HANOVER COUNTY (NHC) AND NEW HANOVER REGIONAL MEDICAL CENTER (NHRMC) TO ACCEPT PROPOSALS FROM OTHER HEALTH SYSTEMS AND OBTAIN MORE INFORMATION TO DETERMINE HOW BEST TO SECURE THE FUTURE OF HEALTHCARE IN THE REGION Chairman Barfield opened the public hearing stating 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. Chairman Barfield requested that the speakers step forward to provide their remarks. Jason Thompson, member of the NHRMC Board of Trustees, stated as the incoming NHRMC Board of Trustees Chairman, he would like to affirm the NHRMC Board of Trustees’ commitment to the process of evaluating what steps should be taken to ensure the best possible future for our hospital and our citizens of this community. The Board of Trustees (BOT) has 17 members, the majority of which are appointed by the Board of County Commissioners, with additional representation from the NHRMC medical staff and Pender County. The members come with diverse backgrounds, interests, and expertise. They share a commitment to serving this community and doing what is right to advance the region’s healthcare. They take time to learn, understand the healthcare landscape, and work with hospital leaders to help chart the strategic direction of the organization. Through this work, they have seen the tremendous opportunity that exists to improve access, value, and health equity while improving the quality of care and supporting our tremendous team of employees and medical staff. Challenges have also been seen and they know that to succeed they must evolve and be open to new ideas. Here are just a few of the challenges that the community and hospital face: North Carolina Medicaid’s program new fixed cost model will cut reimbursements to NHRMC by between $13 million and $16 million every year. Medicare is moving to a similar model and private employers and insurers will not be willing to cover that shifting cost; changes in the 340B drug policy, which helps pay for medication for those who cannot afford what they need, will cost NHRMC $30 million annually; changes in the state statutes as a sole community hospital can cost at least $30 million; NHRMC has funding capital and project needs of over a billion dollars in the 10-year strategic plan. In fulfillment of our roles as Trustees, we will be actively involved in working with and alongside the Partnership Advisory Group (PAG) to define priorities for the future, review proposals received, and articulate their assessment on whether any of the proposed options can help NHRMC achieve its goals and vision for the future more quickly and effectively than it could without doing anything at all. It is the intent of the BOT to have five members to work as members of the PAG and those members have already been appointed and are present today. To ensure the full BOT’s timely involvement and to make sure it is does not hinder the process, the BOT will now meet every month instead of every other month during the remainder of this process. Jerome Fennell, member of the NHRMC Board of Trustees, stated that planning for the future generally takes making some assumptions based on what you know about the present and understanding what is likely to change. As a member of the NHRMC BOT he has come to understand that nearly everything is likely to change and how the business of healthcare operates. However, the most important thing that will not change is our focus on providing excellent care. With that in mind, NHRMC leaders and board members began working on a strategic plan a few years ago that sets the direction for our health system moving forward. Those include improving access to care and wellness through more customer centric options, advancing the value of the care provided through high quality at lower costs to not only treat the sick but keep them well, achieve health equity through community partnerships and activities that remove barriers to care, supporting the staff and culture that has made our center one of the top places to work in the country, partnering with providers (the doctors) to make southeastern North Carolina an excellent place to practice medicine so we can continue to attract top talent and compassionate professionals, NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 369 according to the level of scope of care already in place for all so that no one is denied treatment because they cannot pay for it, and investing to ensure the long term financial security of the future of our health system. The NHRMC BOT believes these priorities are valuable to the future of NHRMC. The BOT is looking forward to the opportunity to learn more about its options. We are fortunate to be in the position we are in, we have a strong healthcare system that is respected for its quality of care, has compassionate teams, and it is positioned to get better. The possibility of moving forward will likely be why there will be a lot to evaluate weighing the pros and cons of each proposal. It is recognized this is a great opportunity and there is an obligation to get this right. He encourages every member of this community to take the time to really understand the questions and options that will be explored in the coming months. Barbara Biehner, a member of the NHRMC Board of Trustees, stated she has been a resident of the community for 14 years, a member of the NHRMC BOT for three years, and has been a healthcare leader for the past 35 years and is pleased to speak on the challenges we are facing. There are industry factors that she sees driving the exploration for the best course of our future. First and foremost, is the change that has been evolving since the Affordable Care Act, which came about in 2009, was enacted. We are moving away from the fee for service model and getting paid for the services we provide to a value model in which the service provider is paid a standard rate regardless of what it takes to care for the patient and individual needs and how different they may be. While this value model has benefits such as supporting holistic care and holding down spending, it also carries more risk because if you have too many people with higher, complicated, and costlier conditions in your pool of individuals you are representing, you may not be able to cover the overall costs of care that is needed. The important thing for us to remember as our city and region grows, we are growing with a lot of the retirement community that are coming here. It is important to note that those over the age of 55 actually take up over half of the healthcare spend. That is what we are facing as we move forward. To succeed in this model, hospitals have to make the changes to be ready while simultaneously working within the current system and it takes significant investment as mentioned by Mr. Fennell in these new services, people, and technology. Throughout the state and the country, we are seeing providers work together to share the resources to become more effective and manage the health of their patients in their communities more cost effectively not just their healthcare, but their health. As a relatively small independent healthcare system, NHRMC does not have access to capital that is required to make this shift while also serving the rapidly growing community and the needs of our booming population, which is why this process is so important to us. Through it, we will better understand our options for improving healthcare and keeping pace with our growing community. We will be looking for the best way to secure our future recognizing success here is not about profit, access to cash, it’s about people, our people. We need to make sure they have the best possible care to keep them well and to be there when they need us the most. She is honored to be a part of this process and appreciates the opportunity we have been given. She looks forward to working with fellow board members, County Commissioners, and the others on the PAG to focus on what is important and to make the decision about the health and wellbeing of our region. Susan Bondurant, resident of Plaza Drive, stated that she mainly came here to listen this afternoon and to congratulate the County Commissioners on embracing transparency on this very important move for our region, our county, and our city. The fact that the Board has decided to have a 21-member committee, people from various backgrounds, people who are knowledgeable about this situation, and the fact that the Board made the initial hearing one where people who are almost deaf like her can hear, thank you. The initial hearing is of the proper length at three hours. This is a very important thing that is being done. It needs the time, we need to take the time, we need to educate ourselves, and she is only hoping as this year or more goes by where we all delve into the details, where we find out what other communities have done, where we find the downsides and upsides, that the Board will continue to make hearings be of this length, not one hour. Three hours is wonderful. As we gain more knowledge, those of us who are not experts, like herself, as we go along we are going to need more time, more hearings, and it pleases her to hear that the BOT members are going to have a meeting every month instead of every other month. We have to give this subject the attention it deserves, stop watching tv, don’t watch too many football games, and really try to help our community come out on the upend of this matter. Pamela Waite, resident of Glasgow Drive, stated she is a market researcher in the healthcare industry and as a researcher she read everyone’s biographies. She could not help but notice the depth and breadth of talent among this group, but one of the things that she also noticed was that the business concerns of those in the medical community outside of NHRMC are not represented here on the board. Very talented physicians and other healthcare providers do an excellent job in this community. She has been the recipient of that healthcare, but it only works if the organizational and business portions of the practices are in favorable and stable situations. She thinks that these independent medical groups, such as the CEO of EmergeOrtho and the CEO of Wilmington Health, she is surprised not to find those voices in the group. She is pleased to see a geriatrician on the group because that is where the costs are going up. The other thing that she would like to see in an RFP and the responses received, she very much like to see concrete suggestions. We have talked about increased care and quality and access at lower cost, but previous speakers already have outlined things like the 340B issue. She would like to see specifics as to how someone can do it better than Mr. Gizdic can already, a talented man, and she does not see why he cannot bring it forward. So for the specifics, concrete things that we can actually examine, not simply theoretical concerns. Henry Westreich, resident of Northshore Drive, stated he has 40 years of experience as a hospital administrator in New York and New Jersey. He did everything from dealing with Nobel Prize winners to working in the prison system. He has been there and has seen everything, and one of the things that amazes him is back when he first started we were told that healthcare was going to die because Medicare was coming in. It was the end of the world, it was Communism, Socialism, and that was when you still had a $5 office visit. Now you have a $200 cold NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 370 with the x-ray and all the other tests. He thinks it it’s time to get to reality. It’s all nice and good about everything being discussed. He has questions about how Navigant was hired, a consultant, and nobody knew about it until later. He has a document from the New York Times about Navigant’s incompetence. He wonders if anyone has ever done this. They had Navigant when he was in New York City’s health and hospitals. They charged his hospital $2 million for consultants for one day a week and they did not show up one day a week. He wonders what the process is, whether you have to go out for bids, is there a county or hospital process or state process. Because something is wrong. There is more than one firm out there. If you get involved with some sort of restructuring you are going to need trustworthy accountants, lawyers, consultants, and he does not know how they will be found if the same ones keep being used over and over. He still wants to know what the end game is because he is a little skeptical about all of this. There is an end game and he does not know what it is and what does this group want to do with healthcare because you do a pretty good job. You can thank your demographics for that. If you were working in an environment where he worked with 400,000 uninsured patients, then you would not be doing it. Think about that, you lucked out with the patients and seniors you have. Truthfully, there is no transparency. You have hardly any senior citizens, you have no real people here, working people, retired people. Buck O’Shields, resident of Partridge Road, stated he is a former County Commissioner serving from 1974 through 1986 and in that period of time he appointed quite a few members to the NHRMC BOT. His concern right now with the action that has been taken is a matter of transparency. The reason he says this is because there was a committee appointed in 1997 to look at the restructuring of New Hanover Memorial Hospital. He chaired that committee along with 13 other people. They were given directions and it appeared at that time they were being steered in a certain direction so they backed up and stated that if they were being told where they were going, they were not going to do it. The bottom line was they met two times with the County Commissioners and met weekly as a committee. When it came time to make the presentation to the County, they had two meetings with the Board, and there was never a final report allowed to be filed on their recommendation. The only way you can find out what happened in those meetings is to go to the record books and look up the minutes in Book 25, Page 938 for the information. This is why he feels and is concerned about the transparency, the fact that the Commissioners adopted a Resolution of Intent to Sell. In his humble opinion, something else could have been done. To him this means that a majority of the Board has agreed that is what they want to do. He is opposed to the sale, but in favor of looking at what we can do as a community to improve the services of NHRMC for the community to make it a more viable and functional unit. Neal Shulman, resident of Nash Drive, stated he is not in favor of the sale. At the first meeting, he listened to everyone on the podium saying we cannot do anything unless we have this resolution and learned that is not exactly true. We have had meetings; we have spent money but we are not breaking the law though. Deception is deception. The voters are the ones; the taxpayers are the ones that own this facility, not the Board. As such, the voters/taxpayers should be the ones to decide what to do. The other thing he wonders about is how all the other hospitals who are having these problems, has anyone talked to them, have any of those hospitals come forward, have you joined together with any of them to say what are we going to do since this is going to be a statewide problem. He has not heard of anything. If we are being told all of these different things how are we supposed to trust this process. He does not think it is transparent, he does not think anyone else does. Maybe we ought to start thinking about the public, the taxpayers, the voters, the people who put the Board there because this is their facility, their medical benefits, not the Board’s. deAndre Corniffe, resident of Henry Street, stated he was born and raised in Wilmington, NC and one of the things he learned when he grew up in Wilmington is that southerners are polite just out of habit. When you go to NHRMC you get good hospitality and as you work, visiting someone, or checking in yourself, you would think you are checking into a hotel because the hospitality is so good. One of the things that this commission has neglected to do in this process was the same thing that a landlord/property owner would do for his tenants before he put a for sale sign up in front of the building; he would have a conversation with his tenants. That was not done in this process. There are two things that need to be addressed: first, there could be a nonbinding resolution presented by the commission, it does not have to be a referendum, it does not have to be put on the ballot by a bunch of signatures from the citizens. This commission could have a referendum so that the citizens can decide whether or not they would like to have a subsidy imposed through taxes. And because NHRMC is a regional hospital he understands that we represent, or the hospital serves over seven counties, including New Hanover, and those counties should also have the option of a referendum to decide whether or not they wanted to participate in the subsidy and the BOT can definitely get the numbers for what that subsidy might look like if it was just in New Hanover County if the other counties did not want to participate or if that subsidy can be spread out among the seven counties total. Secondly, we need to know what costs NHRMC is expecting in the future so we can decide whether or not the citizens can afford a tax that would be the subsidy to keep the hospital as it currently is before we go to having the hospital be purchased and money taken out of the hospital for profits. William Shell, resident of Sundial Court, stated he has spoken with the Board before. There are three items he wants to mention. In all of these meetings that he has been to the most important factor for everyone that has spoken is to maintain local control. Whatever comes out of this the people are looking to maintain local control. Once that local control is lost it will not come back. This hospital has prospered with local control and that is the way it needs to stay. Next, the overwhelming problem with healthcare in America is its cost. It costs too much. We are far ahead and so much more expensive than any other place in the world. Every business school and every think- tank study has shown that medical care consolidation raises costs, reduces services, and there are no economies of scale. Those are the issues that need to be addressed whatever happens in this situation. Finally, on a matter that is personal to him and he has not seen it mentioned before, but it has become increasingly concerning to him. He had NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 34 SPECIAL MEETING, OCTOBER 15, 2019 PAGE 371 heart surgery here and he had neurosurgery here, where you see these consolidations occur across the country you then begin to see the entity which controls it moving those services to someplace else because they are profitable and they want them to be in some other place. Those run the risk here of our citizens when they have to have those complex matters done, such as heart surgery which is profitable, neurosurgery, those will go someplace else unless under the umbrella of a much bigger organization. He asked that all of that be taken into consideration because he thinks all of those are extremely important and they really form the crux of the reason that he opposes the sale of the hospital or the combination with a bigger organization outside this area. Kathryn Walker, resident of Shelton Court, stated she is a retired nurse and has worked for non-profit and for-profit hospitals and hospital organizations. The one question she has for the Board and the NHRMC BOT is why would there ever be a consideration turning over a monopoly, which is what NHRMC is, to a for-profit company. Esther Murphy, resident of Darden Road, stated she feels that the empty seats in the auditorium represents all the people who are working hard to live here due to the cost of living and she feels she needs to represent those that do not have the time or wherewithal to attend. This hospital affects her personally, the history, mission, etc., and she has been a volunteer at the hospital. We have something that is outstanding in this country and have proven how successful a publicly owned hospital could be. She is insulted and offended by the way the process has been going. She has been to all the public forums and is trying to follow the private invitation only events. She has heard the public relations people who have heard from people who are against the sale say the people are scared, ignorant, parochial, and paranoid. She is none of that and the people we have saying this is a really bad idea are far more experienced than anybody involved in making this decision. She feels that the public representation from the County has cut off communications. She does not like how this is going and also finds that the vision is incredibly narrow, dangerous, short sighted, and insulting. We can do so much better. When the hospital changed from being a non- profit to not-for-profit, the report was not delivered to the County Commissioners, and the name was changed from memorial hospital to regional, which she assumed that eventually there would be a change in how the money could be disbursed, but it did not actually happen that way. She was working four jobs to raise her family and could not come and stand up to it. It was dirty then, it put the hospital on a trajectory that we are facing now and the people behind it do not have the best interests of the average working middle-class people in this town. They are on to it and they do not feel there is anything they can do about it. Keep this hospital public and look for a way to have a bigger vision because there is so much better we can do. Dale Smith, resident of Bedminster Lane, stated he is here to speak about a factor not mentioned yet because of his background as an executive vice-president of a multibillion-dollar company responsible for 30,000 employees. He went through a lot of mergers and acquisitions in his time as an executive and very rarely did the employees get the consideration that they should receive. His advice if this process proceeds is that the maximum amount of consideration be given to the employees, their benefits, and their future. Most of you would say if asked he would hope, is that the most valuable asset with the hospital are the employees. They don’t get the kind of consideration they should get during a merger or acquisition and not it’s not just a personal thing, it’s a cost thing. He can guarantee this process is already costing money in terms of loss of productivity of the employees. For example, during a recent procedure he had at the hospital much of the conversation he had with the doctors and nurses was about this process and the conversation was not initiated by him. One the most valuable things in addition to the employees is your reputation. Your reputation is stellar. If you lose it among the community and employees you will lose employees, safety problems are going to go up, etc. There will also be more issues recruiting people. The reputation you have will be based on this entity, as it is with this name. when you become part of a larger organization, your reputation will not only be based on this entity but on the reputation of that larger organization. Joan Donaghue, resident of Simmerman Way in Leland, NC, stated she is now retired but did spend 15 years as a healthcare executive, with 10 of those years in a hospital. She was also around when the Clinton administration was changing the healthcare system from top to bottom. We never know how it will go but we know there will be change and do not know it’s shape. She is very sympathetic to the challenge that NHRMC is looking at. However, she does think it’s premature to consider a sale but not premature to consider partnerships. What she would like for attention to be focused on is that whatever shape the changes will take, it seems like the one thing that will be central will be how the finances are tied to the health outcomes. We have gone over a period of time from a straight up cost plus system to fee for service and we are moving in the direction of capitated care, which is a sum of money per head. What that is going to mean is that winners and losers in the future are going to be those that are able to have a clear understanding of the costs of healthcare linked to the health outcomes. Right now what we have is a billing system and they do not answer those questions. So one thing to be careful about in looking for partners in the future, going to larger partners doesn’t necessarily address that issue. You get folks with larger billing systems. She would really encourage everyone to think hard about partnering with information system entrepreneurs who are looking specifically at this issue. When they look at it, they are going to be looking at a broader area than what takes place within institutions. They are going to be looking at what happens at home. We are going to look at how the top diagnoses for certain types of care suck down a lot of health resources. The folks who come up with this kind of information systems are going to be looking at what happens at home, what type of environmental exposures will end up with someone in the emergency room. She strongly encouraged that health information systems be looked at that will look at what the costs are and the best outcomes. NHRMC starts from a strong position, financially healthy, and very good outcomes. While she lives in Brunswick County, and this is a regional medical center, she knows all the expenses land in New Hanover County. She does not love paying taxes any more than the next person, but she is a participant in her healthcare she is willing to pay for it through her taxes. 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.