NHRMC partnership advisory group outlines goals of RFP, talks healthcare costs

NEW HANOVER COUNTY, NC (WWAY) — The New Hanover Regional Medical Center’s partnership advisory group, formed to explore the future of the hospital, met again Thursday night.

They continued talks about what to include in a request for proposal, which will be sent to potential buyers and partners.

Hospital CEO John Gizdic also discussed more in depth why the process is happening now. He says healthcare is changing, and the hospital must adapt.

“Our financial success in the past has no relevance in the future,” Gizdic said.

He says NHRMC’s contract with the insurance company Blue Cross Blue Shield, which accounts for 25% of their business, runs out next year.

Gizdic says Blue Cross Blue Shield is moving from a fee for service model to a value model, which could hurt the hospital financially.

“They may say, ‘We’ll give you $1,000 to take care of John for this year,'” Gizdic said. “But if John doesn’t remain healthy and John uses $2,000 in that year, that doesn’t change how much we get paid and we’re at risk for that other $1,000.”

He says Medicare, which accounts for about 50% of the hospital’s business, is also moving toward a value system, and right now, the hospital is lucky to break even with Medicare.

“When you only break even on 50 percent of your business, it’s hard to make a profit and be able to reinvest on the community and the organization,” Gizdic said.

At the partnership advisory group’s fourth meeting, discussions continued over what to include in what’s called a Request for Proposal, which will be sent out to potential buyers and partners.

“An RFP is a template that’s used by everybody, it has certain components to it,” said NHRMC Partnership Advisory Group Co-Chair Barb Biehner. “But the RFP goals and objectives are what make it New Hanover Regional Medical Center.”

Although some in the community have expressed concerns that the sale of the hospital is already a done deal, Biehner says that is not true.

“I’ve said it all along, if it’s a done deal and they know what it is, I’d like to know,” she said.

PAG Co-Chair Spence Broadhurst says RFP’s could be sent out before the new year.

“We’ll have a draft, we’ll work on it some more in the next meeting,” Broadhurst said. “And then from there we’ll determine whether we’re ready to go with it, or whether we need some more time to keep refining it.”

The next PAG meeting is set for December 19.

Gizdic also cleared up some recent confusion regarding hospital employee pensions. His statement reads:

“Historically, we have sent out pension statements to our employees so that they know what their pension benefit looks like. And historically, we have projected what that benefit would be if they worked until age 55, or 60, or 62, or 65, at different points in their life if they retired at that. And so with all of the discussion around the partnership exploration, there were a lot of questions about pensions, and so we wanted to get a statement out to our employees real time, so they knew what their pension benefit was as of today. And so we sent out those letters so they knew what their pension benefit was, and trying to reassure them about that pension benefit. Unfortunately that got compared to some historical statements that projected that benefit forward if they had worked 10 or 20 or 30 more years, and so it was just a case of comparing apples to oranges. And so no change in pensions whatsoever, no anticipated change in our pensions whatsoever.”