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NHRMC Analysis and Alternative Solutions

Medical Staff Just Asked Management and Commissioners for a 90 day delay

The Medical Staff who have made NHRMC so valuable just said stop the rush to sell for 90 days. They know more than the rest of us, and thereby validate that there is real cause for concern. Commission members are still saying no to a delay. That means they are still acting in accord with hospital management. So the Hospital is now divided—management vs. medical staff. What should happen now?

The RFP that Should be Issued is to Employ Expert Advisors, Not to Sell

Hospital management, Commissioners and NHC citizens need educating. That’s what

independent expert advisors provide. Apparently, there has been no Valuation or Market Studies and no strategic analysis of various ways to proceed. This material would educate and build confidence that will benefit all. Let’s do this right.

An RFP to Sell Sets Off an Uncontrollable Race, and Sellers do not dictate deal terms to Buyers

One thing no one should believe is that putting out an RFP soliciting bids and insisting on terms like decent wages and quality care after the sale is meaningful. Buyers will not be bound by such terms and the new owners have the right to do as they please. Offers will come with deadlines and penalties. An RFP to sell means quite simply that the race to sell is underway, and proper due diligence will never occur.

Exploring Alternative Solutions

Let’s test the positions in the simplest and most obvious way. Sale advocates say we could get a cool billion dollars by selling. Opponents say quality healthcare is priceless, and the lives and well being of our families should not be sold to the highest bidder. Is there a middle way?

There are Better Alternatives:

1) Sell only up to 49%, or Sell only the Real Estate

Why don’t we first offer to sell up to a 49% interest in the hospital to a passive investor who sees the safety and growth in the hospital that we see? Or, sell and lease back enough of the real estate to reduce the investment exposure to a comfortable level? The world is awash in trillions of dollars seeking long term safe investments.

2) Investment bankers can bid for the opportunity to find such investors and structure a deal that works for both sides.

And New Hanover County receives $500 million dollars in cash while keeping 51% or more majority control of the hospital.

This proposition tests real motives. That is a huge windfall for a County whose entire budget is $400 million a year. No one has put forth a case for more money needs than a fraction of $500 million. If NHRMC management and Commissioners oppose that—would it not be reasonable to conclude that the real motivation to sell the entirety is a big payday for the people who make it happen? Is that placing personal gain of a few ahead of the health and welfare of the entire present and future population of NHC?

Bill Graham

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