Financially struggling Lenoir Memorial Hospital said Thursday that it has selected Winston-Salem hospital chain Novant Health to manage its operations.
Lenoir’s board of directors will next begin negotiations with Novant “to structure the terms of the partnership,” and hopes to finalize the details of the management agreement this spring.
The organization said the management agreement is “not a change of ownership” and stressed Lenoir’s century-old legacy as a community hospital.
“For more than a century, Kinston has had a community hospital and the chapter we’re beginning today will preserve that legacy of local healthcare for future generations,” Gary Black, Lenior president and CEO said in a statement. “Through an affiliation with Novant Health, we will further enhance the services we provide, ensuring that high-quality care remains close to home.”
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Management agreements and other corporate affiliations are increasingly common as hospitals struggle in an emerging health care market with declining Medicare reimbursements and pressures to manage costs. Particularly hard-hit by the industry changes have been community hospitals like Lenoir, a 261-bed facility in Kinston, about 80 miles east of Raleigh.
Under the initial proposal, Black will retain his CEO title at the hospital but will be employed by Novant, while all other Lenoir employees and managers will remain employed by Lenoir. Novant is a four-state network with 14 medical centers, hundreds of outpatient facilities and clinics, more than 1,200 physicians and 26,000 employees.
Lenoir has bled money for at least five years while Novant has thrived, according to public filings. Last year marked Lenoir’s biggest operating loss so far, $5.3 million, while Novant logged $109.8 million in operating income. In the past five years, Lenoir’s operating loss was nearly $14 million.