Vidant Health gives CEO 5-year extension amid an ongoing dispute with the UNC System

UPDATE: This story has been updated to clarify the UNC System's relationship to Vidant Medical Center.

Michael Waldrum, who is currently leading Vidant Health through a dispute with the state of North Carolina, will be staying at the health-care provider for the foreseeable future.

Waldrum has signed a five-year extension to remain the CEO of Vidant Health, an influential health-care provider in Eastern North Carolina. He has led the hospital since 2015.

For the past month, the private health system has been engaged in a public back-and-forth with the UNC Board of Governors over who controls the Vidant Medical Center’s Board of Trustees. The drama — which has tens of millions of dollars on the line — has played out in courtrooms, in the halls of the state’s General Assembly and in private mediation talks.

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Vidant Health CEO Michael Waldrum has signed a five-year contract extension with the health care provider to remain CEO. Courtesy of Vidant Health

The dispute began when the hospital and the Pitt County Board of Commissioners moved last month to strip the UNC system from appointing any trustees at Vidant Medical Center in Greenville. UNC has been involved with the hospital since the mid-1970s, when it named the hospital the teaching facility for East Carolina University’s Brody School of Medicine, though its appointing powers have changed over the years. The most recent agreement, approved in 2013, gave the UNC system nine of the 20 board appointments.

In response, the UNC system took the hospital to court, which eventually turned into mediation talks. And then the N.C. Senate added to its budget a line that would strip about $35 million worth of Medicaid reimbursement from the hospital, under the reasoning that, without UNC-appointed trustees, the hospital should no longer receive reimbursements that other private hospitals don’t get.

The General Assembly’s Republican leadership is also looking at ways to fund the construction of a new teaching hospital in Greenville, so that Brody School of Medicine no longer needs to use Vidant Health as its teaching hospital. The move would cost the hospital tens of millions of dollars.

Bob Greczyn, chairman of Vidant Health’s compensation and benefits committee, said the extension was an expression of confidence in Waldrum’s ability to lead the health-care provider through an increasingly turbulent era for hospitals.

He noted, however, that talks on the extension began before the current dispute began with the UNC system.

“Times in the health-care industry are turbulent these days,” Greczyn, a former CEO of Blue Cross and Blue Shield of North Carolina, said in a phone interview. But “turbulent times are the best time to have good leadership and to make sure you secure your leader for the foreseeable future. That’s part of the reason we are doing that here.”

Waldrum’s current contract, which pays him $1.2 million per year, was set to expire next June. That compensation level will remain the same in the new contract.

Greczyn said the dispute between the UNC system and Vidant had no bearing on their vote to retain the CEO, which was unanimous.

“This process was not driven by current circumstances, which we fully hope and expect to work out to the benefit of everyone,” he said.

Waldrum has kept a public presence throughout the current dispute with UNC. Mediation talks are still ongoing, though UNC has already rejected one compromise that Vidant released publicly earlier this week, The News & Observer has reported.

In a press conference last month, Waldrum said that it was necessary to overhaul Vidant Medical Center’s board because it had too much influence from outside of Eastern North Carolina. He noted it would be better if the hospital had trustees that knew the region and its issues “rather than a group of people that sometimes haven’t ever been to Eastern North Carolina or don’t understand the issues that we face.”

Waldrum also went on a Greenville radio station and said he believes the UNC system ultimately wants to take over Vidant Health.

“Yes, there’s an expressed intent,” by UNC, Waldrum said.

Around the same time as the radio interview, WITN, a Greenville-based television station, released confidential documents that appeared to show the UNC system had commissioned a consulting firm to research a possible takeover of the Vidant Health system.

UNC Health Care, in a statement to the N&O earlier this week, denied that it planned to take over Vidant.

A UNC Health spokeswoman did say it has had several conversations in the past with Waldrum about partnerships and a potential combination of the two health care providers, but UNC “has never pursued it.”

In the meantime, there is no immediate end in sight to the dispute between Vidant and the UNC system. If mediation talks fail, then the issue is likely to return to court.

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Zachery Eanes is the Innovate Raleigh reporter for The News & Observer and The Herald-Sun. He covers technology, startups and main street businesses, biotechnology, and education issues related to those areas.