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Cape Fear Valley Health trustees OK plan to take over management of Harnett Health System

Fayetteville Observer (NC) - 10/30/2014

Oct. 30--The Cape Fear Valley Health board of trustees approved a plan to take over management of Harnett Health System at its meeting Wednesday.

The trustees met for more than an hour and a half in closed session before reopening the meeting and immediately voting on the resolution to authorize CEO Mike Nagowski to execute the management agreement with any changes as advised by legal counsel.

The trustees met in closed session for about two hours to discuss the agreement Oct. 13.

"We're terribly excited," Nagowski said after emerging from the meeting Wednesday night.

Nagowski stressed that the 10-year agreement is for management only.

"We're not merging; we're not purchasing Harnett Health," he said.

Harnett Health has been managed by WakeMed Health System since 2005.

After investing $56 million in a new hospital in Lillington, which opened last year, the hospital ended the 2013 fiscal year with a loss of $24 million.

A spokeswoman for WakeMed said Tuesday that Harnett Health informed the system that it was interested in going in another direction with a new management partner.

Harnett Health's board still must approve the management agreement. It's expected to vote today.

As part of the agreement, Harnett Health will pay a management fee to Cape Fear Valley and compensate the system for two employees it will install at Harnett Health -- a president and a director of finance. Cape Fear Valley also will get a seat on the hospital's board of directors.

Dan Weatherly, president of Cape Fear Valley Bladen Health, will take over as president of Harnett Health.

Nagowski said Weatherly has been a key player in helping turn around Bladen Hospital, which had a thin medical staff and tremendous financial problems.

"We're really excited about Dan wanting to take on this challenge," he said.

Weatherly's first order of business is to listen, he said.

"My first goal is to try to ascertain where they are right now," he said, "really listening to the staff and physicians and try to find out what Harnett Health needs."

He also said he'll look to find ways to reduce costs as quickly as possible by implementing economies of scale through Cape Fear Valley's resources, including better prices through group purchasing and efficiencies through technology.

Jerry Dean, chairman of Cape Fear Valley's board of trustees, said he believes the system can add value in Harnett County and capture many patients who have been referred elsewhere in the past.

"We're going into this, I think, by getting the physicians in Harnett County to better understand who we are and why they should do business with us," he said.

Spreading Cape Fear Valley's influence northward won't have any effect on the system's other growth plans, Nagowski said. This includes a new 41-bed hospital slated to open in Hoke County in February and plans to eventually convert its Health Pavilion North on Ramsey Street into a full hospital, for which it has state approval for 65 beds.

"I think what you're seeing is a continued development of the growth and influence of Cumberland County, and our health system is growing with that," he said.

The continued growth is a reflection of Cape Fear Valley's mission, Nagowski said.

"We have a firm belief that people should have access to care in their community," he said.

Staff writer Paige Rentz can be reached at rentzp@fayobserver.com or 486-2728.

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