When people talk about the impacts of rapid growth, they usually discuss land, roads and other infrastructure.
But growth also has a significant impact on healthcare.
With the Wilmington Metropolitan Statistical Area ranking among the top 10 fastest growing in the nation, residents have begun to experience longer wait times in emergency rooms and long waits to see specialists.
“The combination of the population growth in this region and the demand for healthcare services outpacing the availability of services, there’s existing unmet need,” said Ernie Bovio, president of UNC Health’s Southeast Coastal Region.
Recently, the North Carolina Department of Health and Human Services acknowledged that in its State Medical Facilities Plan, noting an additional
need for 225 acute care beds in New Hanover County.
Three healthcare systems — Atrium, Novant and UNC Health — have expressed a desire to meet that need, creating a competition for those 225 beds. Some believe more competition and choice are needed in the Wilmington healthcare market.
Currently, Novant Health operates all the hospital facilities in New Hanover and Pender counties, and all but one — Dosher Memorial Hospital, a non-profit, public township hospital in Southport — in Brunswick County.
Over the next several months, the state will consider the applications and decide which system or systems should build facilities in the area.
The Certificate of Need process
In North Carolina, healthcare facilities must be approved by the Department of Health and Human Services through the N.C. Division of Health Service Regulation and the Certificate of Need Law.
This law aims to make healthcare affordable by ensuring that facilities are necessary, utilized and geographically accessible.
Each year, the North Carolina Department of Health and Human Services produces its State Medical Facilities Plan to determine the need for new healthcare facilities across the state. Laurie Whalin, president of the Novant Health Coastal Region, explained the state considers growth rate and utilization of hospital beds in the county.
“So, New Hanover Regional Medical Center actually triggered the need for those 225 beds because we’re the facility in the county providing those services,” she said.
Once the need for facilities or services is determined, healthcare systems may apply to meet those needs.
In June, Atrium Health, Novant Health, and UNC Health submitted applications. While Atrium and UNC Health each applied for only a portion of the available beds, Novant Health applied for all 225, which means the three systems are now competing for those spots.
Atrium Health's application
Atrium is part of Advocate Health, a nonprofit health system headquartered in Charlotte, which serves patients at 69 hospitals and more than 1,000 care locations across eight states, including Atrium Health Carolinas Medical Center in Charlotte, Atrium Health Wake Forest Baptist Medical Center in Winston-Salem, and several other hospitals and medical clinics. Earlier this year, Atrium recently announced plans to merge with WakeMed in Raleigh.
In addition, Advocate Health is an academic health system with Wake Forest University School of Medicine serving as its core.
According to a news release from Advocate Health, the application from Atrium Health is to develop a new “full-service community hospital” with no more than 42 acute care beds.
At the Power Breakfast, Smoot explained that Atrium is securing land for this hospital in the north end of New Hanover County, and he noted that Atrium is already familiar with the Wilmington area.
“We’ve been here working for nearly two decades,” he said.
Prior to Novant acquiring New Hanover Regional Medical Center, Atrium helped grow and manage the New Hanover Regional Medical Center Physician Group, and they currently manage Columbus Regional Healthcare System in Whiteville.
“So, we have a strong presence in this market, and more importantly, we have a strong commitment to the market,” Smoot said.
Steve Smoot, executive vice-president of Advocate Health and president of the system's North Carolina and Georgia division, explained that Atrium only sought 42 of the available beds because they felt they could use the beds in that area of the county, and he noted that they believe a lot of the growth will occur in the north end of New Hanover County.
Smoot noted they are in the process of purchasing the land for the hospital.
He said Atrium hopes to grow with the area, and while he acknowledged that the hospital would take time to build, he said if the application is approved, Atrium will begin developing the necessary resources to support the hospital, ensuring it is "ready to go" once it's completed.
UNC Health's application
Based in Chapel Hill, UNC Health is a not-for-profit, integrated health system owned by the state of North Carolina. Included in the system are UNC Hospitals and its provider network, the clinical programs of the UNC School of Medicine and 16 hospitals located on 20 campuses across the state.
Bovio said UNC Health already has a presence in Wilmington, mainly focused on pediatric subspecialty care. There is also a UNC School of Medicine branch campus in partnership with Novant Health New Hanover Regional Medical Center.
“And UNC Health has listened to the residents in this community,” Bovio said. “It’s clear that they want more health care, shorter wait times, more access to primary care and specialty care, and they want an alternative — a choice — without having to travel two hours for that alternative.”
The certificate of need application from UNC Health is for a 150-bed hospital. Bovio said UNC Health has land for the facility under contract. If approved, it will build its facility on 62 acres located at the southeast corner of Shipyard Boulevard and South 17th Street. Bovio noted the property is centrally located, has great access, is on the public transportation route, and would provide UNC Health with an opportunity for future expansion.
Bovio explained the state considers the applicant’s ability to use the assets and with UNC’s partnership with Wilmington Health, he feels confident that they will be able to use the beds they have applied for.
If UNC Health’s request is approved, it will likely take four to five years to open the hospital. In the next five years, Bovio expects more beds will be available through the State Medical Facilities Plan, and he anticipates UNC Health will apply for those beds.
He added that UNC Health would also be making investments in more outpatient facilities, medical office space, physician recruitment for both primary and specialty care, and other diagnostic and therapy clinics throughout the region.
Novant Health's application
Novant Health is a not-for-profit, academic medical center-backed health system with more than 900 locations across the Carolinas.
Novant began operating in the Wilmington area when it merged with Brunswick Community Hospital in 2006. In 2021, Novant merged with New Hanover Regional Medical Center, acquiring those facilities and later, Pender Memorial Hospital.
Novant Health now operates Novant Health New Hanover Regional Medical Center, Novant Health Brunswick Medical Center, Novant Health Pender Medical Center and Scotts Hill Medical Center with plans to open other hospital and emergency room facilities in Wilmington, Leland and Carolina Shores.
As Novant continues its plan for investing in the region, part of that plan includes expanding its capacity at New Hanover Regional Medical Center. It applied to the state for all 225 beds.
“We started our planning well before even the 2026 State Medical Facilities Plan came out,” Whalin said.
Two years ago, Novant Health began working on its master facilities plan, looking at its main campus on 17th Street in Wilmington to meet the growth anticipated over the next 10 to 20 years. The hospital, which was built in 1967, needs expansion, and Whalin said they were anticipating the need for a large number of beds.
As a result, she said, Novant planned to build a heart and vascular tower on its campus, obtaining approval from its board of directors to proceed with that project last year.
“We obviously know that we can make good use and utilization of those beds,” she said.
Whalin said the state has already approved the construction of the heart and vascular tower and a rehabilitation facility on the orthopedic hospital campus. Once the rehabilitation facility is completed, they will begin construction of the heart and vascular tower where the rehabilitation beds are now located, with the 225 beds being in the new tower.
She noted that while the new tower would be dedicated to heart and vascular patients, it will open capacity in the hospital’s main tower serving other patients, including cancer and surgical patients.
“We know New Hanover County needs beds now, and we can put them into play the fastest,” she said.
What happens next?
Currently, all three systems are awaiting the state’s decision.
Summer Tonizzo, senior media relations manager for the N.C. Department of Health and Human Services, noted that the Department of Health Services Regulation has between 90 and 150 days to review a Certificate of Need application.
The state is expected to render a decision by the end of this year. If the applicants don’t agree with that decision, it could be appealed. During the Greater Wilmington Business Journal’s Power Breakfast in July, it seemed an appeal would be likely.
“I would say that one of the healthcare systems or multiple healthcare systems up here are not going to be happy with the decision, and what typically happens — once that decision is made — is then there is an appeal process,” Bovio said.
He then posed a scenario where UNC Health is not awarded any beds or only awarded a small portion of the requested beds. Bovio noted that if that occurs, UNC Health would likely appeal, bringing all three healthcare systems back to the table to mediate and negotiate a settlement — something he hopes could occur quickly.
“And this is very typical of the C.O.N. process,” Bovio said. “This happens for just about every single C.O.N.; there is an appeal because somebody’s not happy with the decision.”
But if no agreement can be reached, the matter would then proceed to litigation, potentially adding years to the process.
“We all have a common goal to bring more physicians to this community, to bring more healthcare to this community for the benefit of you and your neighbors, and so I’m confident that we’ll be able to sit down, come to the table, come to a resolution, and be able to support the healthcare needs of the community,” Bovio said.
Whalin noted that while all three systems had different build times, Novant already had approval to build the heart and vascular tower with the plan to have it operational by 2030.
“So, we feel like we’re going to be able to put those beds into circulation the fastest,” she said.
Smoot added that he, Bovio and Whalin were all friends and they want to “collaborate and do what’s right for the community.”
“But we have to make sure that we can keep ourselves sustainable for the future and our missions, as well,” Smoot said. “And so, we’ve got to balance those two things as we think about that process.”
Renee Spencer is the community engagement editor at the StarNews. Reach her at rspencer@usatodayco.com.
This article originally appeared on Wilmington StarNews: Wilmington's growth fuels battle over new hospital beds
