An ongoing battle between Vidant Health and the University of North Carolina system over Vidant's flagship hospital in Greenville surfaced in the Senate budget committee Wednesday, with members sparring over a provision that would cost Vidant $35 million next year.
Vidant Medical Center has been the teaching hospital for East Carolina University’s Brody School of Medicine for more than 40 years. The hospital and the UNC system have had an agreement since 1975 that allowed the UNC Board of Governors to appoint nine of the nonprofit hospital's 20 board members, with the rest appointed by the Pitt County Board of Commissioners.
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Because of that partnership, Vidant has been exempted from fees that private hospitals have to pay to the state Department of Health and Human Services. But in April, the Vidant board voted to end that partnership and give itself the power to appoint the nine seats formerly controlled by the university system.
UNC said it was caught off guard by the decision and sued successfully to block it temporarily to allow UNC and Vidant to discuss the move.
“While we are very concerned about the impact of Vidant’s conduct on our long-standing affiliation, we are hopeful that action by the court will allow the parties to pause and evaluate what steps will be needed to preserve the partnership, as required by the academic affiliation agreement, so that all parties may better serve the people of North Carolina,” UNC spokesman Josh Ellis said in a statement.
In the meantime, Senate leaders inserted into their budget a provision that would repeal the hospital’s exemption from the “supplemental fee,” which Vidant said Wednesday would mean a $35 million hit to its budget.
Dr. Michael Waldrum, Vidant Health's chief executive, said Vidant and UNC are in mediation over their differences, so the Senate's proposal caught officials off guard.
The change to the board's structure is in the long-term interest of the hospital by guaranteeing that board members – the people who know the hospital operations best – have a say in who oversees it, Waldrum said at a Wednesday afternoon news conference in which he urged eastern North Carolina residents to call lawmakers to protest the budget provision.
"Hopefully, people understand that this kind of cut will not help further the mission of the Brody School of Medicine, Vidant Health or the care that we provide to eastern North Carolina," he said. "It will have a significant effect, and we will have to accommodate by adjusting the services that we provide and changing significantly what we do."
Sen. Don Davis, D-Pitt, sharply questioned the provision in a Wednesday morning budget hearing, noting eastern North Carolina's historic health disparities and lack of access to care.
“I hope this is not an attack on Vidant,” Davis said. "You're really hurting the people of eastern North Carolina."
Sen. Ralph Hise, R-Mitchell, defended the change, saying Vidant and the county had chosen to sever the relationship with UNC, so they should no longer be eligible for the “benefit” of that relationship.
"Without the affiliation agreement in place, Vidant is just like any other hospital. The Senate budget therefore treats Vidant the same way as other private hospitals, as is only fair," Hise said in a statement. "The Senate can’t compel Vidant to accept appointees. The provision is designed to treat all hospitals that are not owned by the state in the same way."
Vidant is "highly committed" to retaining its relationship with the Brody School of Medicine, Waldrum said, noting the new hospital board structure requires two members from ECU.
"We have been open to discussing issues that we think need to be on the table, and we believe that they have issues that need to be on the table," he said of continuing negotiations with UNC.