Atrium Health Submits New $2B Purchase Option for NHRMC

06.18.2020 Atrium Health News

CHARLOTTE, N.C., June 17, 2020 – Today, Atrium Health announced it has submitted a new $2 billion purchase option for New Hanover Regional Medical Center (NHRMC). This new offer is the second option to the original 40-year lease offer that Atrium Health originally submitted. As the local Partnership Advisory Group (PAG) and the New Hanover County Commission consider whether to sell or lease the hospital, Atrium Health is leaving little doubt it wants to be the community’s choice.

"Atrium Health has provided the Partnership Advisory Group and the County Commission with an alternative purchase option alongside of our long-term lease proposal so they can choose which is the best fit for the community and their vision for it," said Eugene A. Woods, president and CEO of Atrium Health. "We listened to the community’s concerns about selling the hospital and structured our original offer with that in mind. As the process has unfolded and with other offers to purchase the hospital outright being seriously considered, we are submitting an additional option to remove any doubt about Atrium Health’s true desire to be New Hanover’s permanent partner."

"At Atrium Health, we are committed to providing health, hope and healing – for all in each community we are privileged to serve," Woods added. "NHRMC is an outstanding hospital, and a partner with which we see tremendous potential for additional growth – through the new behavioral health hospital we have proposed to combat the opioid crisis, cultivating the next generation of physicians, surgeons and other medical professionals through our affiliation with Wake Forest Baptist Health and the school of medicine in Southeastern North Carolina, and by working in tandem to eliminate racial and economic disparities in accessing high-quality healthcare."

The new purchase offer allows the County to retain NHRMC’s net surplus cash and investments, making the value of the upfront consideration of the transaction $2 billion. In addition, Atrium Health is committing to a minimum of $1.11 billion in capital improvements over the next 15 years. Terms of the alternative proposal option submitted by Atrium Health are outlined below.

Through the new purchase offer option in excess of $2 billion, Atrium Health will:

  • Pay $200 million in upfront cash to the County at closing, plus transfer NHRMC’s current net surplus cash to New Hanover County, which has been estimated by NHRMC to be $460 million.
  • Pay over $950 million, in equal annual installments, to New Hanover County for 15 years, ensuring a stable stream of revenue for the County.
  • Acquire NHRMC and all existing physical assets.
  • Make a $250 million donation to a foundation restricted for the purposes of eradicating disparities of care, dramatically improving behavioral health and eliminating opioid addiction within the next decade.
  • Construct a $120 million state-of-the-art behavioral health and addiction treatment facility, to begin Day One.

To confirm local control, Atrium Health’s offer will ensure:

  • Local decision making is maintained, with a two-thirds majority of the board of directors being residents of New Hanover County or the surrounding communities. The initial board will be nominated jointly by New Hanover County and Atrium Health.
  • Two NHRMC directors will be nominated to serve on Atrium Health’s governing board of commissioners, providing New Hanover a voice in the greater Atrium Health enterprise.

Atrium Health has reaffirmed its commitment to medical education:

  • Atrium Health and its academic medicine partner, Wake Forest Baptist Health, have signed a definitive Memorandum of Understanding (MOU) related to support of NHRMC’s graduate medical education program and growing medical education opportunities in the region. This commitment is independent of the parties’ pending transaction and planned medical school campus in Charlotte.
  • With a private academic medicine partner and the ability to fund medical education and research efforts without the prior approval of political bodies, Atrium Health can unequivocally deliver on its commitment to medical education. It has an 80-year history of medical education, having built and operated multiple residency and fellowship programs and having developed a medical school branch campus. Atrium Health will bring this expertise to New Hanover to train the next generation of physicians, surgeons, nurses and other medical professionals.
  • In addition, having already signed a separate MOU with Wake Forest Baptist Health in 2019 for the expansion of medical education and research across the entire Atrium Health enterprise, this will bring a combined robust research capability to the communities of Southeastern North Carolina.

"We believe New Hanover County is at a pivotal moment in the history of its region, and we want to make a real, lasting difference in the health of the community," said Woods. "We want to ensure that our financial investments in New Hanover will be dedicated to health care, for everyone – including the most vulnerable, and will be available over time to grow and bear fruit."

Atrium Health’s alternative asset purchase proposal is designed to invest in the people, technology, infrastructure, medical education and clinical services that give all the citizens of Wilmington and the surrounding seven county area the excellent health care they deserve without leaving the region. The proposal’s targeted upfront investments, followed by a sustained and substantial revenue stream, will ease the burden on taxpayers, provide flexibility to the county’s leaders to address local spending priorities and remove the County from the risks associated with modern healthcare management.

Fast Facts about Atrium Health

  • Atrium Health is ranked among U.S. News & World Report’s Best Hospitals in multiple specialties, with our flagship hospital among Top 5 Hospitals in North Carolina.
  • Atrium Health is an industry leader in virtual care, including innovative virtual hospital and behavioral health offerings.
  • Atrium Health is a recognized national leader and number one among finalists in health equity and community benefit. Its $2 billion in community benefit, double that of any other finalist, and is the largest Medicaid provider in North Carolina, with $339 million in free and uncompensated charity care.
  • Atrium Health is the only finalist with two stand-alone Behavioral Health hospitals and a dedicated emergency department.
  • Atrium Health was awarded the American Hospital Association’s 2019 Quest for Quality Prize as well as the only hospital to receive the 2020 CMS Health Equity Award.
  • Atrium Health is the only finalist with a proven track record of successful partnerships, exceeding its commitments to partners in six NC counties like Anson, Cabarrus, Cleveland, Lincoln, Stanly and Union Counties in North Carolina, as well as in Macon County, Georgia.
  • Atrium Health has cared for twice as many patients as the other two finalists combined last year. This amounted to 442,932 inpatients throughout our integrated system.
  • Atrium Health has built a 200-member physician group with NHRMC, and the only finalist with an existing medical group in the region with admitting privileges to NHRMC.
  • Atrium Health has the financial strength to meet its commitments with an S&P AA- rating for over 20 years.
  • Atrium Health has a 40-year affiliation with UNC School of Medicine, with a satellite campus in Charlotte, and is the only finalist with experience in growing a successful regional medical school campus with 300 medical students per year from schools across the U.S. and 490 residents and fellows across 52 programs.
  • Atrium Health is creating a Next Generation Academic Health System with Wake Forest University and Wake Forest Baptist Health that will be the largest resident and fellow program in North Carolina.

About Atrium Health

Atrium Health is a nationally recognized leader in shaping health outcomes through innovative research, education and compassionate patient care. Headquartered in Charlotte, North Carolina, Atrium Health is an integrated not-for-profit healthcare system with over 70,000 teammates at nearly 40 hospitals and 900 care locations. With locations throughout the Carolinas as well as Georgia, Atrium Health is a leading-edge innovator in virtual care and mobile medicine. It provides top-ranked pediatric, cancer and heart care to patients, as well as specialized musculoskeletal programs and organ transplants. Ranked among U.S. News & World Report’s Best Hospitals in eight different specialties, it has also received the American Hospital Association’s Quest for Quality Prize. Its flagship hospital, Atrium Health’s Carolinas Medical Center, is the region’s only Level I trauma center and is consistently rated among the nation’s best. With a commitment to every community it serves, Atrium Health seeks to improve health, elevate hope and advance healing – for all. Last year alone, Atrium Health provided more than $2.07 billion in free and uncompensated care and other community benefits.