Politics & Government

As the battle between UNC system and Vidant Health rages, no immediate end in sight

For the past month, the battle between Vidant Health and the UNC Board of Governors over who controls power on the Vidant Medical Center’s Board of Trustees has played out in courtrooms, in the halls of the General Assembly and in private mediation talks.

But this week, with those mediation talks going on indefinitely, Vidant publicly released what it called a compromise offer to the UNC System. Vidant’s offer would still reduce the amount of influence the UNC Board of Governors has at the hospital while also asking for more money from the state.

The struggle between Vidant and the state has continued to escalate since the hospital and the Pitt County Board of Commissioners moved last month to strip the UNC system from appointing any trustees at Vidant Medical Center in Greenville. UNC has had that role since the mid-1970s, when it named the hospital the teaching facility for East Carolina University’s Brody School of Medicine.

First, the UNC system took the hospital to court, which eventually turned into mediation talks. Then the N.C. Senate added to its budget a line that would strip about $35 million worth of Medicaid reimbursement to the hospital, under the reasoning that, without UNC appointed trustees, the hospital should no longer receive reimbursements that other private hospitals don’t get.

Some Eastern North Carolina-based politicians called the cut an attack on the eastern part of the state. And Gov. Roy Cooper, making his first comments about the situation Tuesday, said it seemed like a political vendetta was motivating the cut.

“I am very concerned about how this affects the East Carolina medical school and rural health care,” Cooper told reporters. “It looks like a political vendetta, and I am concerned when political vendettas affect rural health care.”

“Thirty-five million dollars is a tremendous amount of money,” Cooper continued. “I am very concerned about that, and I hope that is not part of the final budget.”

The Senate wasn’t done there, however. Its Republican leadership said last week that they were actively looking at ways to fund the construction of a new teaching hospital in Greenville, so that Brody School of Medicine no longer needed to use Vidant Health as its teaching hospital. The move would cost the hospital tens of millions of dollars.

On Monday, Vidant said it would give back four board seats to the UNC Board of Governors rather than the nine it had previously on the 20-member board. But, Vidant said, if the state got back any influence on the board, Eastern North Carolina’s largest health system had a laundry list of things it wanted from the state, including:

  • A $28 million provision in the state’s budget toward the planning of a new building for the Brody School of Medicine.
  • The removal of the $35 million state budget cut of the hospital’s Medicaid reimbursement.
  • Equal pay for ECU and UNC faculty in their respective medical schools for teaching and research.

  • Proportionate class expansion for ECU and UNC in their respective medical schools.

Under the terms that Vidant has put forward, the 20-member board would be made up of 11 Pitt County appointees, two ECU physicians, two Vidant Medical Center appointees, four UNC appointees and the dean of the Brody School of Medicine. Previously the board was made up of 11 Pitt County appointees and nine UNC appointees.

A spokesman for the UNC system did not reply to requests to respond directly to Vidant’s release. But on Tuesday, the university system put out a statement saying Vidant and Pitt County should restore all nine UNC seats to the hospital’s Board of Trustees.

“We continue to believe that the best path forward for Vidant, Pitt County and East Carolina University would be to honor the long-standing partnership that has served eastern North Carolina well for more than 40 years and to fully restore the governance structure all parties had agreed to in the affiliation agreement,” UNC system spokesman Josh Ellis said in a statement. “We welcome future dialogue with Vidant leadership and look forward to hearing their concerns, as well as resolving problems that have arisen in the relationship with Vidant and its support of the Brody School of Medicine.”

A spokesman for UNC previously told The News & Observer that the mediation talks between the parties do not have a specific expiration date. If mediation is not successful, then the issue will likely go back to court.

Vidant and the Pitt County commissioners originally moved to change its governance structure because it believed it was in the best interest of Eastern North Carolina for a local authority to choose trustees.

Mike Waldrum, Vidant Health’s chief executive, said during a news conference last week that it would be better if the hospital had trustees that knew the region and its issues “rather than a group of people that sometimes haven’t ever been to Eastern North Carolina or don’t understand the issues that we face.”

During the talks between UNC and Vidant, WITN, a Greenville-based television station, released confidential documents that appeared to show the UNC system had commissioned a consulting firm to do research on a possible takeover of the Vidant Health system.

UNC Health Care sent a statement to The N&O about the WITN report saying that there are no plans “secret or otherwise” to acquire Vidant Health.

“Even if there were plans, secrecy would be impossible,” UNC Health Care spokeswoman Lisa Schiller said in a statement. “A combination of UNC Health Care and Vidant Health would require the approval of multiple public entities and boards. It would also require a public bidding process under State law.”

Schiller added that the report was prepared to educate the UNC Board of Governors “on what the consolidating health care market might look like in the future. It was not prepared to evaluate partners or to pursue new partners.”

Schiller did say that UNC Health has had several conversations in the past with with Waldrum, the head of Vidant Health, about partnerships and a potential combination of the two health care providers, but UNC “has never pursued it.”

On a Greenville radio station, Waldum said he believes that the UNC system ultimately wants to take over Vidant Health.

“Yes, there’s an expressed intent” by UNC, Waldrum said in response to a question about UNC Health’s ambitions in Eastern North Carolina.

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.