Business

County, Pardee seal deal with UNC Health Care

Pardee attorney Sharon Alexander explains UNC Health Care agreement as Pardee CEO Jay Kirby looks on.

By Bill Moss, Published: August 28, 2013

The Henderson County Board of Commissioners authorized Pardee Hospital to form a stronger relationship with management partner UNC Health Care that board members said best positions the county hospital for dramatic and unpredictable changes in the business of health care.

The Board of Commissioners unanimously approved a series of legal agreements that:

• Refinances a $9.5 million revenue bond loan, saving Pardee $626,000 over 10 years.
• Restructures the Pardee Board giving the Pardee Board of Directors and UNC Health Care more appointments while preserving the commissioners' final approval of their nominations.
• Gives Pardee and UNC Health Care much greater flexibility to form partnerships with other health care providers.
• Directs Pardee, Henderson County and the county schools to explore within six months the possibility of forming a Pardee-based health maintenance organization for employees. Henderson County has 750 employees and the school system employs about 1,700 people.

The agreement also directs Pardee, the county and the schools to explore the creation of a health maintenance organization for employees. What shape that will take is unclear but first look is almost immediate. The agreement requires the entities to start looking at the concept within six months.

The potential HMO for 3,600 employees of Pardee, Henderson County and the schools could produce substantial tax savings by trimming the county's health care costs, Commissioner Grady Hawkins said.

Commissioners said partnering with a player as big as UNC Health Care, which has built partnerships and acquired hospitals in Raleigh, High Point, Smithfield, Siler City, Lenoir and other North Carolina cities, strengthens Pardee's ability to survive in an environment that brings huge financial challenges.

"I think we've done the very best thing we can do to take care of our hospital here in Henderson County," said Commissioner Tommy Thompson. "There's big changes to come. We talk about micromanaging. We can't do that, but the hospital is in the business of dealing with that every day and I think we've got the right people on board to do that and I'm very proud of what we've accomplished today."
Commissioner Grady Hawkins, the more thorough interrogator of the county attorney on the details of the agreements, praised the new agreement.
"I think we've made a great partner in UNC," he said. "They're in the business every day of dealing with whatever is new out there and that's a big advantage to us."
Chairman Charlie Messer said a presentation he had attended on the coming health care landscape convinced him that the strengthened partnership is the right prescription.
"I don't think Henderson County could be in better position by having UNC on board with an agreement to help get us through this time," he said.
County attorney Russ Burrell walked the commissioners through the bond refinancing and the new bylaws. The commissioners had to approve the revenue bonds because the county owns the land under the hospital and that is committed as collateral along with the hospital's operating revenue. The agreement does not obligate county property tax revenue even if the hospital were to default, Burrell said.

"If the hospital fails, we would not go out to get money to pay this off," Thompson said. "It’s like a foreclosure and the real estate would take care of it."

Burrell said: "It is clear that over the years of the relationship with UNC Health Care, to me at least, that this board as well as the hospital have reached some level of satisfaction with the direction that the hospital so far has been led by UNC Health Care. This opens that up for greater flexibility in the future. The future of health care in general is almost impossible to predict because it changes every day. What the law is and what it will be tomorrow is almost unknowable."