$5 billion Novant Health expansion plan in North Carolina lands crucial approval
Charlotte’s second-largest hospital system, Novant Health, won approval Monday for a big step forward in a $5-billion deal set to expand the system in southeastern North Carolina.
New Hanover County Board of Commissioners approved the sale of the county-owned New Hanover Regional Medical Center to Novant, 4-1, in a meeting Monday night. The commissioners’ vote was the last step before state regulatory review.
Novant beat out other North Carolina-based systems, including Atrium Health and Duke Health, to secure the deal.
The New Hanover deal follows other moves toward hospital consolidation in North Carolina and across the country. In 2018, for instance, Charlotte-based Atrium announced plans to combine with Macon, Ga.-based Navicent Health. Atrium is the biggest hospital system in Charlotte.
The expansion into southeastern North Carolina means Novant will have more than 36,000 employees and bring in nearly $6.6 billion in combined revenue, up from about $5.5 billion, Novant CEO Carl Armato told the Observer Tuesday. It currently has about 29,000 workers.
Armato said the sale expanding the hospital system means there will be more resources across Novant’s markets, including in Charlotte. And Novant will continue to expand, he said.
What happens next
Armato said the sale in New Hanover County could mean bringing in hundreds of jobs in that area in the future as Novant continues to expand, Armato said.
New Hanover County chairwoman Julia Olson-Boseman called the vote, which approved the Novant sale and set up the New Hanover Community Endowment, “the most transformative decision for generations to come.”
Novant Health Brunswick Medical Center will be rolled under New Hanover in the deal, according to Novant.
The deal will now be presented to the N.C. Attorney General’s Office for review.
That process is expected to take several months, according to the New Hanover County Partnership Advisory Group, a 21-member committee of community members formed nearly a year ago to explore sale options. A decision is expected in the first half of 2021, according to the group.
Community endowment
Though some critics say hospital consolidation can mean rising prices for patients, Armato said Novant is committed to offering high quality health care at affordable prices.
“You will see us continue to provide affordable health care in every market that we operate,” Armato said, including New Hanover.
And the sale will mean $1.25 million invested in a newly formed New Hanover Community Endowment fund. The endowment plan focused on four main areas: public primary, secondary and post-secondary education; health and social equity; community development and community safety.
But one county commissioner, Rob Zapple, voted against the sale after raising concerns about the transparency of that endowment, a private foundation. Zapple asked to separate the sale and creation of the endowment into two votes, but was voted down.
“I’m sure that the public is not fully aware that, as written, (the bylaws of the endowment) will result in a massive transfer of wealth from the public to a privately controlled foundation,” Zapple said.
If the sale and the creation of the endowment had been separated, Zapple said he would have voted to approve the sale.
Another $50 million from the sale will be allocated to mental health and substance use treatment programs.
The $5 billion deal includes a plan to invest more than $3 billion into growing the medical center’s services in the Wilmington area.
Novant will also expand the hospital’s relationship with UNC Health and UNC School of Medicine, according to the New Hanover County Partnership Advisory Group. The advisory group unanimously recommended the sale to the commissioners last week.
“By joining our hospital with Novant, we are securing healthcare for generations to come,” Olson-Boseman said Monday night. “We are promising a better quality of life, more access to care, greater innovation and technology, enhanced academic experiences and less health disparities. We are guaranteeing safe, high-quality, cost-effective care for every person.”
This story was originally published October 6, 2020 at 12:53 PM.
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