Novant ends partnership negotiations with Memorial Health

Novant ends partnership negotiations with Memorial Health

SAVANNAH, GA (WTOC) - According to a memo, Novant Health has ended negotiations to partner with Memorial Health.

The partnership was originally presented to enhance and grow care in the Savannah market and strengthen Memorial financially so it could continue to provide care to all.

The Memorial Health Board of Directors voted unanimously to authorize the new partnership and the Membership Substitution Agreement was negotiated, which included a $295 million commitment to fund capital projects to grow and expand several services, including the Children's Hospital of Savannah, ambulatory expansion to Pooler, expansion of heart and vascular services and additional critical care beds.

The agreement also included a commitment to guarantee repayment of Memorial's bond debt and to continue critical service lines, like trauma and neonatal care.

While we don't know the finer details of what really convinced Novant to call it quits, we do know that the company's president and CEO sent out the memo saying involvement by the Hospital Authority made things too confusing. Problem is, Novant knew the authority would be involved from the beginning.

Novant said:

It has become clear to Novant Health that there is a lack of alignment among the Authority, the Memorial Board, and other stakeholders.  We do not believe that the proposed partnership would be successful in such an environment.

Although the discussions have been going on for about a year now, the Chatham County Hospital Authority became more active in the negotiations about five months ago.

"And so I think it would have been better if the Hospital Authority was involved at the very beginning," said Chatham County Board of Commissioners Chairman Al Scott.

Scott and his fellow Chatham County Commissioners appoint members to the Hospital Authority, which oversees agreements like this. He told WTOC Novant was aware that the Hospital Authority would be involved in the negotiations, and that they're not unfamiliar with this type of partnership.

"This authority may have more authority than some of the authorities they've dealt with in North Carolina. I don't think that they were totally blindsided by that," said Scott.

Memorial Health did not make anyone available for comment on-camera this evening, but they did release a statement:

The Memorial Health Board of Directors and management have worked in good faith for many, many months toward a strategic partnership with Novant Health.  We have the upmost respect for their organization and team, and we are disappointed for our Team Members and the community that the other constituents in this partnership were unable to resolve their issues.
While it's unclear where we'll go from here, Chairman Scott believes another partnership will eventually come along.

"I suspect that Memorial will in fact find another suitor, and the sky isn't falling, and hopefully all will be well in the future,” said Scott.

Partnerships like this are becoming more common across the state, and across the country, as more hospitals are strapped for cash. Memorial is no exception. Last year they had a net loss of more than $20 million, and they're operating in the red so far this year.

Read Novant Health's full memo below:

Chatham County Hospital Authority Chairman Don Waters released this statement Monday night:

The Hospital Authority is surprised by this unfortunate turn of events. We trusted we were dealing in good faith to resolve the issues and move forward with the Novant deal and had no reason to think this was not progressing. In fact, as recently as 10 days ago, Novant had a lease in hand that reflected the agreement reached with the Authority in late April.

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