Time for a reboot: With some large national and N.C. hospital systems in hot pursuit, Wilmington leaders consider cashing in their community's healthiest asset.

• Author: Macmillan, Mike

New Hanover County has a chance to land a $ 1 billion check or, alternatively, avoid having to borrow hundreds of millions of dollars to support the anticipated growth needs of its biggest employer. It's an unusual opportunity only possible because New Hanover Regional Medical Center is the third-largest county-owned health care system in the United States.

But selling the hospital and affiliated operations could eliminate local control and, some experts say, lead to higher medical costs in a monopoly market. It's a momentous decision given the system's payroll of 7,500 and annual revenue of about $1.5 billion. It's the issue that Wilmington's civic leadership is grappling with amid much public consternation. A decision on how to proceed is expected in the next few months.

How to structure governance of the local hospital system was decided years ago by many N.C. communities, most of which opted to form not-for-profit systems that are loosely affiliated with local governments and elected officials. Last year, Asheville's Mission Health chose a sale to for-profit HCA Healthcare, creating a $1.5 billion foundation to help boost public health efforts. Some cities, such as Asheboro, are being forced to pass on control because their hospitals are unprofitable. Greensboro-based Cone Health, one of the state's largest health care systems, has said it is working to succeed struggling Randolph Health as Asheboro's main hospital operator.

But in Wilmington, New Hanover County government has retained control of its lucrative health care network. Aided by a good location, stable management and a growing community, the medical center represents a valuable asset that has nine bigger rivals licking their chops in anticipation of a change of control.

Debate over the future of the center kicked off when a county commission meeting agenda last July included a "Resolution of Intent to Sell" item. The topic was raised by County Manager Chris Coudriet and health system CEO John Gizdic, both quoted in a press release announcing the measure. The release didn't cite any elected officials or private-sector leaders, and no one has stepped forward to take credit for starting the process.

By Sept. 16, the initiative had morphed into a less specific "exploring options for a potential new model" for the hospital. That's the night that the commission voted to create an advisory group to oversee the process of changing the hospital's ownership and governance structure and consider "strategic alternatives."

"We can't keep kicking the can down the road," County Commissioner Patricia Kusek said at the meeting before voting to approve a 21-member Partnership Advisory Group. It is made up of nine community members, five physicians, five hospital trustees, Gizdic and Coudriet. Co-chairs are former Mayor Spence Broadhurst and Barbara Biehner, a veteran hospital administrator who works for a nonprofit health care alliance supported by New Hanover Regional. That kicked can Kusek is referring to is the potential financial drag facing the county from operating a big health system in a consolidating industry increasingly dominated by much larger companies and not-for-profits.

"While [the medical center] started as a county hospital more than 50 years ago, it is now much more than that, serving the entire region of southeastern North Carolina through a network of hospitals, outpatient centers, emergency services and physician practices," Gizdic said. "But it is a challenge to grow as quickly as our region is growing, while also making the shifts in our business and care models that are required as the health care industry moves from feefor-service reimbursements to value-based care."

The medical center expects $1.9 billion in capital investments over the next decade, Gizdic says, most likely doubling long-term debt. Its market area includes six counties to the north and west, which...