Lawsuit over Vidant appointments settled
Wednesday, October 9, 2019
An agreement announced on Wednesday settles a dispute over the governance of Vidant Medical Center by allowing the UNC Board of Governors to appoint seven members to the hospital's board of trustees and reserving two posts for ECU's chancellor and medical school dean.
UNC, Vidant and the other involved parties — East Carolina University and Pitt County Board of Commissioners — released a joint statement about the settlement.
UNC and ECU filed the lawsuit in May after the Board of Commissioners and Vidant Medical Center amended the hospital’s articles of incorporation and stripped the UNC Board of Governors of its authority to nominate members to the hospital’s governing board. It was a duty the governors had shared since the mid-1970s when the hospital, then owned by the county, entered an agreement to become the medical school’s teaching facility.
While the size of the hospital board has varied over the decades, it currently consists of 20 members, 11 appointed by the county commissioners and nine nominated by the UNC governors.
“We are pleased that this agreement honors the longstanding partnership between Vidant, Pitt County and East Carolina University," said Randy Ramsey, chairman of the Board of Governors of the University of North Carolina System. "ECU’s Brody School of Medicine and Vidant Medical Center play an important and vital role in ensuring quality health care for eastern North Carolina and future generations of medical professionals for all of North Carolina."
Under the settlement agreement, the dean of the Brody School of Medicine and the chancellor of East Carolina University will fill two of nine seats appointed by UNC Board of Governors, according to the news release.
Trustees for the remaining seven seats will be selected by the hospital board’s nominating committee for approval by the Board of Governors.
The settlement also makes the chief executive officer for Vidant Health “an official, designated liaison to the East Carolina University Board of Trustees Health Sciences Committee,” according to the news release.
In addition, the settlement produced an agreement that the medical school and hospital “will jointly engage a financial consultant to assess the current financial relationship between the entities.”
“I think we’ve established a really nice framework for a way to move forward,” said Dr. Mark Stacy, dean of the Brody School of Medicine. “It puts a framework in place where we can’t slip in our communication.”
Having the leadership of the hospital and medical school appear before each entity’s governing body allows them to provide background and share details about their respective organizations and that can enhance the decision making process, he said.
Stacy and a representative of the chancellor’s office immediately will be seated in two of the open seats on the hospital board. The process to select a trustee for the hospital’s third open seat will begin under the new system.
Stacy said he believes the consultant’s assessment of the financial relationship between the entities will help them create a shared vocabulary about operations and finances.
"Everybody in these two institutions believes they are responsible for the health of everybody in eastern North Carolina,” Stacy said. “This has been a very stressful time, particularly when we couldn’t really talk about it. I’m hopeful everybody in eastern North Carolina can take a deep breath and say everybody is going to be alright and our health system and medical school will stay together.”
As part of the agreement, Stacy will continue to serve as an ex-officio, non-voting member of the Vidant Health Board. Vidant Health is the parent company of the medical center.
“There is nothing more important than the people we collectively serve throughout eastern North Carolina,” said Dr. Mike Waldrum, Vidant Health’s chief executive officer. “Everyone involved understands the unique challenges facing our rural communities. A strong partnership is vital as we work together to support and train the next generations of medical professionals and to deliver high quality care close to home.”
“I am pleased that we have been able to achieve a resolution that strengthens the relationship between Vidant and the ECU Brody School of Medicine,” said Beth Ward, chairwoman of the Pitt County Board of Commissioners.
Mediation between Pitt County, Vidant Health, ECU and the UNC System has been underway since a lawsuit was filed in May preventing the hospital from beginning a new process for appointing members to the board of trustees.
The new rules stripped the governors of that power, giving it instead to the Board of Directors of University Health Systems of Eastern Carolina, now known as Vidant Health.
On the day the parties agreed to mediation, the state Senate introduced a budget proposal that stripped Vidant of the Medicaid funding it received for serving as a teaching hospital. That proposal was removed from the budget ultimately approved by the House and the Senate.
That budget contained a provision that gave ECU’s Brody School of Medicine, $215 million to plan and build a new medical school facility, contingent on the reinstatement of the Board of Governors’ appointment authority. The settlement meets that condition.
Gov. Roy Cooper vetoed the budget but the state House passed an override vote last month. The Senate also must override the veto before the budget is approved.