By Rose Hoban
In a move that’s likely to be seen more in coming years, leaders at Wayne Memorial Hospital in Goldsboro announced last week they would enter into a management agreement with UNC Healthcare to run their facility.
The deal, which isn’t quite finalized, has been in the works for several months, according to Wayne Memorial spokeswoman Georgia Dees, and is likely to be completed early in the new year.
“With all the changes in health care, it made sense to partner with an organization that was larger,” Dees said.
She said leaders at the 316-bed hospital were hoping to gain more negotiating power by jumping on board with UNC, and looking to make operations more efficient. UNC has similar agreements with Nash Health Care in Rocky Mount and Pardee Hospital in Hendersonville, where UNC provides services such as legal, accounting and marketing, as well as management services.
“We’ve gotten expertise at doing this and figuring out ways to improve the quality of care,” said UNC spokesman Alan Wolf.
There was also a looming change in leadership at Wayne Memorial that was resolved with the agreement.
“Our current president and CEO announced in February he was going to retire, so our board was looking at different scenarios since that time,” Dees said, referring to the departure next month of Bill Paugh, who has been at the hospital since 2000.
“Having a succession plan helps,” she said.
In the black
Smaller North Carolina hospitals, especially those struggling financially, have been seeking to affiliate with larger systems; for example, Duke LifePoint now operates seven of the state’s smaller hospitals, up from three just a few years ago.
One of the differences, however, is that Wayne Memorial is in good shape financially. In the fiscal year ending in September 2013, the hospital had an operating margin of 7.8 percent (according to the most recent Internal Revenue Service documents publicly available), with total revenues of $226 million.
Wolf said Wayne Memorial also did well last year, with $246 million in revenues and an operating margin of 4 percent.
“They’re a strong, successful community hospital,” he said.
Wolf said the agreement would not force Wayne Memorial to sell assets, but simply get help to manage better, for a fee that Wolf could not disclose.
“We are in the black and we’re running a good operation here,” Dees said. “Our margin, what we have at the end of the fiscal year, we turn around and put back into the hospital.”
She said that’s how the hospital expanded its emergency department a few years ago, and the hospital just received approval to make a $25 million expansion of surgical suites.
“We’re trying to keep things as up to date and advanced as possible, whereas some hospitals haven’t been able to do this,” Dees said.[box style=”1″]
Wayne Memorial Hospital at a glance:
Revenue: $226.7 million
Medicare patients: 40 percent,
Medicaid patients: 15 percent
Commercially insured patients: 26 percent
Income limit to receive free care: less than 200 percent of the federal poverty level ($23,500 for a single person)
Income limit to receive discounted care: less than 350 percent of the federal poverty level ($41,195 for a single person)
Payroll: $80 million
Long term debt (bonds): $58.8 million
Data source: IRS 990, 2013