Caldwell Memorial Hospital in Lenoir announced Friday that it will move forward with negotiations to join the UNC Health Care System after a unanimous vote by its Board of Directors.
The 110-bed acute care hospital, about 75 miles northwest of Charlotte, has a provider network of more than 50 primary and specialty care physicians and advance practice professionals.
The move comes at a time when rising medical costs and government healthcare reforms have prompted community hospitals to seek larger partners for financial and institutional support. Local hospitals are able to seek higher reimbursements when they are part of a large hospital system with more negotiating power.
Caldwell Memorial is “financially sound” but it wanted make its future more secure, Chief Executive Officer Laura Easton said.
UNC will provide at least $35 million for capital improvements at Caldwell Memorial Hospital over five years and will contribute at least $4 million to its foundation as part of the deal.
The partners plan to finalize negotiations and obtain any regulatory approval within the next few months. The deal is expected to close in the first half of 2013.
The company began a formal search for a partner in April, Easton said, and submitted proposals to six other organizations. While several responded positively, Caldwell chose UNC because it “shared our vision and our commitment to the community,” Easton said.
The UNC system includes UNC Hospitals in Chapel Hill, Rex Healthcare in Raleigh and Chatham Hospital in Siler City. It also manages Hendersonville’s Pardee Hospital, and announced in September that it will expand its network to include High Point Regional Health System.
Benefits for Caldwell
UNC Health Care offers management resources that will help Caldwell navigate healthcare reforms and complex reimbursement systems, Easton said.
Caldwell was concerned also about its long-term ability to recruit and retain physicians, she said, and UNC’s network and the chance to host residents from the UNC-Chapel Hill School of Medicine will help solve that problem.
“Caldwell Memorial’s desire for a partner fits with UNC Health Care’s strategy of working with organizations across the state to provide care to all North Carolinians, provide access to the latest research, and provide training opportunities for future clinicians across North Carolina,” UNC Health Care CEO William Roper said in a statement.
UNC will maintain Caldwell Memorial’s current management and keep local governance through local representation on the Board of Directors. Caldwell employees will maintain their current compensation and benefits for a year.