Healthcare Foundation: Time is right to sell 20% ownership in hospital

Before making the decision to sell its 20% stake in Wilson Medical Center to Duke Lifepoint, the Healthcare Foundation of Wilson looked at the landscape of health in the community, said Executive Director Paula Benson. She said the timing was right.

Monday’s move by the foundation to exercise its contractual option to sell to comes after several rocky years at the hospital with low industry ratings and demands from the public and private sector for improvements. And earlier this month, Wilson Medical Center CEO Chris Munton announced that he’s taken another job and is leaving the hospital after a year in his current role.

Wilson County Manager Ron Hunt told the Times late Monday the decision shouldn’t come as a surprise.

“Commissioners have been dissatisfied with the hospital for a long time,” he said.

He said the dissatisfaction continues. Hunt said the hospital needs a definite change to improve patient care and outcomes.

“We continue to not see that,” he said.

Hunt also pointed out Wilson Medical Center’s current rating with the Centers for Medicare and Medicaid Services: one star out of a possible five. For reference, UNC Health Nash has four stars out of five.

“(The) Healthcare Foundation of Wilson shares the concerns expressed by the county regarding the quality of care,” Benson said in a prepared statement Tuesday afternoon. “When the Healthcare Foundation considered the option to exercise the put option on Monday night, we evaluated the timing and the conditions and determined it was the right time for us to make this decision.”

Benson would not say if the Foundation board vote was unanimous.

In a statement to the Times, Lifepoint officials said on Thursday, “We just learned of the Foundation’s decision to relinquish its ownership share in the hospital and will be working through the transition with its team. We are supportive of that decision. Our hope is that the proceeds from this sale will be used to benefit the community for years to come.

BACKGROUND AND NEXT STEPS

In 1986, the Wilson County Board of Commissioners voted to transfer ownership of  the hospital, which was then named Wilson Memorial Hospital, from the county to a privately owned holding company with tax-exempt status. It took two years before the process was complete. The plan allowed for the continuation of county representation on the hospital board.

In 2013, Wilson Medical Center sought to partner with a hospital group to help with operating costs, according to Times reporting. Partnerships were a trend among hospitals driven by President Barack Obama’s health care reform initiatives. Duke Lifepoint, a joint venture between Duke University Health System and LifePoint, was chosen.

Duke Lifepoint offered to pay $56 million to become the 80% majority shareholder. That amount is 80% of the hospital’s $70 million valuation at the time.

The Healthcare Foundation of Wilson has the remaining 20% stake in Wilson Medical Center Holding Co. LLC. Duke Lifepoint Healthcare is a partnership between Brentwood, Tennessee-based Lifepoint Health and the Duke University Health System. The private equity firm Apollo Global Management bought LifePoint Health in 2018.

The Healthcare Foundation was formed in 2014 after the hospital was purchased. With the assets received from the transaction, the foundation provides grants to improve community health and wellness. Since 2016, more than $56.7 million has been expended, according to the foundation.

Next in the process is an independent valuation of the hospital. The foundation said that could take several months.

VITAL CONNECTION

The Times provided questions to Wilson Medical Center and received prepared responses from officials about the foundation’s decision to sell its 20% stake in the hospital.

“Over the years, we have been grateful for our aligned partnership, which has greatly benefited the community of Wilson. We understand and respect the foundation’s desire to grow their reach and impact, and we are confident that this decision is part of their broader strategy to address emerging health needs and disparities in our community,” reads one of the responses. “We look forward to continuing our collaboration in different capacities as they pursue their mission with renewed focus and expanded resources. Wilson Medical Center is a better hospital today because of the foundation’s support and assistance.”

According to Benson, each year since the merger in 2014, the foundation has reinvested its portion of earnings to renovations at the hospital, totaling about $27 million.

Wilson Medical Center officials said the ownership change wouldn’t affect the hospital’s day-to-day operations.

“Our board of trustees, representing the community’s voice, will maintain the vital connection to the community that the foundation previously provided,” the statement says.

‘WE ALREADY MADE A MISTAKE’

Not everyone is happy about the foundation’s decision, including Will Farris, a partner at Farris & Thomas Law and a vocal critic of the hospital.

“What a disappointment that they are taking the money and turning their backs on the citizens of Wilson and the staff at the hospital that relied on others to try to improve the hospital,” he said. “Our town must have a successful hospital, and any leverage we had is gone as a result of this decision. Twenty percent was more than zero. Why would Duke Lifepoint ever care to send executives to the table with commissioners or the Healthcare (Foundation) board now? Hopefully they have a plan and it works. We already made a mistake doing this deal and selling the hospital years ago, and I fear this will compound the mistake.”

Farris attended county commissioner meetings to voice his concerns over patient care and staffing issues at Wilson Medical Center. He and two Healthcare Foundation of Wilson members met with N.C. Attorney General Josh Stein in July 2022.

From the beginning, Farris said, he and numerous others have tried to “put patient care first, and the wonderful doctors and nurses have tried hard in terrible conditions.”

“It is always comforting to hear about the good experiences at Duke Lifepoint, but they are few and far between, and that is not the fault of the doctors and nurses and staff,” he said. “It is a fundamental problem of having an equity firm (Apollo) in charge that is solely concerned about profits over patient care.”

Farris said it was equally disappointing that the hospital still has a one-star rating after several members of the healthcare foundation board and several commissioners said they were fixing the problem.

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