CaroMont’s mounting prestige
Gastonia’s CaroMont Health foresees an independent future as it faces off against larger neighboring rivals.
With what felt like a grizzly in his chest, Jim Benfield’s legs buckled, and he crashed onto his living room floor. A Mount Holly policeman who had helped first responders break down doors to rescue ailing 911 callers, he frantically fumbled with his cellphone.
“Dummy me, why didn’t I call the ambulance?” he shrugs. “I knew I was dying, and all I could think was that I wanted to speak to my wife one more time.”
Fresh out of the shower, a clot blocked the left anterior descending artery of Benfield’s heart, triggering paroxysms of pain that he compares to the claws of an angry bear. He had one shred of hope left — his firefighter son found him and called for help. Soon, an emergency medical technician had stuffed nitroglycerin under his tongue, helping to ease the pain. Then came the siren and the sway of the big ambulance. After a 20-minute ride in the shrieking ambulance, the driver finally pulled up to CaroMont Regional Medical Center.
Four days later on an early May morning, Benfield walked out of the Gastonia hospital, a stent funneling blood through the artery his doctor called the widow-maker. Now 57, five years later and wiser about his diet and exercise, he’s the lucky one in slightly more than 10 who survive the deadliest of heart attacks.
“Amazing,” says the now-retired police captain. “Not only the care — no surgery, no cutting, just the stent — but the fantastic staff of the cardio rehab unit and the care I received months after I left.”
Benfield’s hospital is not among the state’s largest or most widely known. Nearby in Charlotte, Carolinas Medical Center, standard-bearer of Atrium Health, has double CaroMont’s 435 beds and nearly 16 times the employees systemwide. Regional competitor Novant Health — with 921 beds at its Winston-Salem flagship, Forsyth Medical Center, alone — dwarfs CaroMont with $5 billion in annual revenue. CaroMont had $661 million in the fiscal year ending June 2020.
This year, though, Business North Carolina’s annual rankings of Tar Heel hospitals show CaroMont in third place, trailing only Durham’s Duke University Medical Center, part of the Duke Health system, and Raleigh’s UNC Rex Hospital, which is part of the large UNC Health system, with a dozen affiliated hospitals.
“Do you have to be big to be good? Absolutely not,” says Shelby Lassiter, clinical performance improvement director of the 130-member N.C. Healthcare Association. Most Tar Heel hospitals belong.
“CaroMont is an example. Frequently, smaller organizations don’t have the resources larger ones do, so they have to become masters of innovation and leaders in how to partner with their communities.”
Chris Peek, 50, grew up not far from the hospital, where he’s been president and CEO since 2017. “We’re part of this community,” he says. “It’s in our DNA.”
CaroMont demonstrates that smaller hospitals such as Pinehurst’s FirstHealth Moore Regional and CarolinaEast Medical Center in New Bern can excel, analysts say. In recent years, CaroMont has joined Rex, Duke, Raleigh’s WakeMed and Mission in Asheville in receiving IBM Watson Health awards as one of the nation’s best 100 hospitals — there are about 2,800 — based on survival rates for heart attacks, infection control and complications, lengths of stay, and profit margins.
Its third-place ranking by Business North Carolina is a rebound from 14th in 2020. It was fourth, sixth and fifth in preceding years. Our formula weighs more than two dozen criteria such as readmissions, plus data from Durham-based insurer Blue Cross and Blue Shield of North Carolina, the U.S. Centers for Medicare & Medicaid Services, the nonprofit Leapfrog Group and U.S. News & World Report.
CaroMont is not immune from difficult trends facing hospitals. Minnesota-based UnitedHealthcare recently cut ties with the hospital, leaving about 11,000 patients facing higher, out-of-network bills — or going elsewhere for elective procedures. CaroMont insists the largest U.S. insurer refused to pay adequately. Separately, seven physicians jumped ship last fall to join an independent practice created by former Atrium doctors.
Nevertheless, CaroMont’s performance reflects a dramatic turnaround of a hospital and health care system that, a decade ago, faced questions about its own health. CEO Peek and outside observers describe a system that sometimes defies industry conventional wisdom while thriving in a tough environment.
In 2012, the Centers for Medicare & Medicaid slapped an “immediate jeopardy” status on CaroMont, citing potentially deadly patient-safety violations. Among other things, nurses were failing to properly administer medicine.
A Medicare spokesperson says the warning is the center’s most serious, issued when patients “are at risk of serious injury, harm, impairment or death.” It’s only a step away from a devastating loss of accreditation that would result in skittish physicians sending patients elsewhere and potential financial collapse. Typical of most hospitals, about 60% of CaroMont’s revenue comes from Medicare and Medicaid.
Within five years, by then back in Medicare’s good graces, CaroMont was winning accolades. Analysts rarely point to a single factor but describe cultural change as easier to see than define.
Behind the four-story glass front that welcomes visitors, CaroMont nurses, physicians and patients ply airy hallways and cluster under the bright lights of operating rooms. The hospital has been singled out by Blue Cross and Blue Shield of North Carolina for excellence in knee and hip replacements and spinal surgeries.
One of those doctors is Todd Davis, executive vice president and chief medical director, who served briefly as interim CEO before Peek’s arrival.
“That reinforced for me that a CEO’s skill set is completely different from mine,’’ he laughs. In fact, in more than two decades here, he’s played a major role in establishing CaroMont’s cardiac program. He’s an anesthesiologist and critical-care specialist. Like most of the nearly dozen doctors and nurses in governing and leadership roles at the hospital, Davis continues to practice medicine.
Peek has even deeper local roots. He grew up in Gastonia, attended a local private Christian secondary school, graduated from Gaston College and UNC Charlotte, and holds an MBA from Amberton University, a nondenominational Christian college in Texas that caters to working adults. He did follow-up studies at Cornell University, then gained nonmedical, humanitarian experience in Atlanta as human resources director for the regional Salvation Army. Later, in nearby Mecklenburg County, he became assistant county manager in 2006, helping oversee a budget that topped $1.5 billion.
During his stint in Charlotte, he helped the county work with the 2012 Democratic National Convention and, during the Queen City’s civil unrest in 2016, coordinated public-safety measures. Then he came home to Gaston County.
In the spring of 2017, Peek became the third CEO in five years after the 2012 Medicare threat, including one who left after a cringeworthy, aborted campaign to adopt the slogan, “Cheat Death.”
Peek was chosen by a search committee headed by Donnie Loftis, a former county commission chairman who called him “uniquely qualified and familiar with our health system.” Loftis was forced to resign as CaroMont’s board chairman last year after calling COVID-19 restrictions “tyranny” and hinting on social media that the pandemic is a global conspiracy.
Board members are unpaid volunteers whose private statements don’t represent system policy, spokeswoman Meghan Berney notes. Like all hospitals, CaroMont staffers have been treated for the virus, and officials favor public distancing, masks and other precautions.
Peek is close-cropped, with an easy manner. He’s an ordained minister who sometimes fills in as a pastor at local churches, and he knew the turf when he took CaroMont’s top spot. His most recently reported annual compensation was $995,585 — a fraction of the $7.9 million that Atrium counterpart Gene Woods received in 2020 at a much larger system.
“This is quite personal for me,” Peek says. “The decisions I make may be a little different from those of the typical health care CEO, who could have come from anywhere around the country. Many of the people we take care of are family and friends I grew up with and have great affection for.”
Berney adds that the heavily local staff is strongly connected to the community. “We have to be, because we not only work here, we live here,” she says. “That brings a different sense of responsibility and accountability.” A third of employees have been on staff 10 years or longer.
Without the geographic diversity and scale of its larger rivals, Peek faces some unusual challenges. CaroMont faces stiff sailing in remaining independent, but that fits Gaston County’s long role of existing in the shadow of Mecklenburg, which has four times the population.
“We’re certainly aware of the changes we’ve undergone here,” Peek says. When he was a youngster, “we were the textile capital of the world.”
Charlotte’s home county began its transition from blue-collar manufacturing to white-collar jobs generations ago, while textiles continued to dominate Gaston’s economy into the early 2000s. Gaston and neighboring counties are dotted with former mill towns such as McAdenville, Cherryville, Stanley and Belmont that today feed about 250,000 patients annually into CaroMont.
Starting in the 1990s, NAFTA and other global forces decimated the textile industry, but old health habits such as smoking and poor diets lingered. Environmental issues from former chemical manufacturers and other industries create cancer hot spots, according to research.
Studies by the Institute for Health Metrics and Evaluation at the University of Washington show Jim Benfield’s heart attack shouldn’t have been a surprise. About 230 men per 100,000 in Gaston County and the surrounding area die of ischemic heart disease every year, compared with a rate of 185 statewide. Male life expectancy is 72.7 years, nearly three years less than for the state, and there are 38 deaths from suicide and violence per 100,000, compared with 32.2 statewide.
“For me,” Peek says, “it’s a question of long-term strategy. How can we use our influence in this community to transform the future?”
Path of progress
Today, eastern Gaston County is experiencing rapid spillover growth from Charlotte, prompting the development of a second campus in Belmont. The hospital there is part of a $350 million building spree that includes a new four-story, $90 million tower on the main campus to house intensive-care rooms. Both are expected to be completed in 2023.
“We’re the beneficiary of being in a region that’s close to a rapidly growing metropolitan area, and Gaston’s positioned for significant growth in the next decade,” Peek says. “Until now, we’ve grown our market share mainly in our primary service area” of Gaston and adjoining Cleveland and Lincoln counties.
CaroMont Health grew out of Gaston Memorial Hospital, which opened in 1946 and was replaced with a new structure in 1973. The name was changed in 2013. While the hospital may look like dozens of others in the state, the strategy isn’t identical.
Peek and Davis say CaroMont shuns the kind of marriages sweeping Tar Heel health care. Atrium linked with Wake Forest Baptist Health last year, while Novant bought New Hanover Regional Medical Center.
CaroMont welcomes partnerships but doesn’t court them. “The reporting and labor it takes provides no value for our patients,” Davis says. “What provides value is outcomes.” Peek adds that CaroMont is content with its status as one of the 19 remaining independent acute-care hospitals not affiliated with larger groups.
“We’re often referred to as an independent hospital system,” Peek says. “I don’t support that nomenclature. I prefer to call us a community-based system. CaroMont Health is not currently interested in any type of consolidation in the foreseeable future. Our mission is centered here in this community.”
CaroMont was only large N.C. hospital to support state Treasurer Dale Folwell’s effort in 2019 to change reimbursement rates for the State Health Plan. The plan never took effect.
Fitch Ratings gives CaroMont a strong investment-grade rating of AA-minus. “Many large systems don’t have that strong a rating,” Peek says. In its latest financial report, CaroMont had about $160 million in debt on assets of $1.3 billion.
Many business interests believe CaroMont’s independence is more important than just civic pride, says Bob Hovis, a Gaston County commissioner and former Bessemer City mayor. “CaroMont’s a vested business partner in our community,” he says. “They are a cornerstone of our positive outlook for the future.”
The hospital has adapted business principles benefiting both finances and patient care, he says. “They focus on their core competencies, analyze weakness and have a plan of action to improve them.”
Like most hospitals, CaroMont has been hurt financially by the pandemic, which curtailed elective procedures and discouraged frightened patients from visiting emergency rooms and seeking other care. Operating revenue increased 2.2% in the year ending June 30, 2020. More recent results haven’t been reported.
CaroMont’s performance refutes the conventional wisdom that hospitals must have billions in annual revenue to stay abreast of technology trends, according to Lassiter of the health care association. They cite CaroMont’s contract with Epic Systems, a national medical-records database that provides data from more than 250 million patient records, including Novant and Atrium.
“It has the capacity and potential to provide more information than anyone could possibly use,” Davis says.
Artificial intelligence and emerging technology called precision medicine could level playing fields for small- and medium-sized hospitals that prize independence, Lassiter says. “Artificial intelligence can help clinicians analyze massive amounts of data on a single patient to predict outcomes and recommend interventions much better than we as humans can.”
CaroMont’s Davis says the hospital has ventured into nonmedical-management theory, which he credits for meeting or exceeding Medicare’s norms for infection control, readmission rates and control of methicillin-resistant staphylococcus aureus, or MRSA, a potentially deadly bacteria.
“One is an unsexy term coined in the auto industry by Toyota and the military called ‘limited variability,’” he says. “We try to standardize everything, and the idea is [that] failures happen when there’s variability. You standardize to protect from human error.”
The hospital also prods its staffers with, among other things, bonuses of as much as $500 for exceptional work. “CaroMont’s employees get care at CaroMont by CaroMont providers, so it’s more of a family-type situation than at some larger hospitals,” Lassiter says. “They know their outcomes will impact themselves and the people they love most in the world.”
About 8 miles north of CaroMont Medical Center, a program at East Gaston High School is another reason the system maintains strong community ties. As many as 150 freshmen will get their first taste of health careers, such as nurse’s aides, dietary managers and pharmacists, at the initial wave of the CaroMont Health Sciences Academy. Their training will be transferable to higher levels of college or jobs.
The academy, in cooperation with the county schools and Gaston College, is one of dozens of CaroMont community programs, including smoking-cessation programs, diet counseling, cancer support, and even burial services for infants of poor families.
Many programs underscore efforts to push care out of hospitals. The system has a growing telemedicine program, enabling its doctors and nurses to diagnose and, in some cases, treat patients remotely, doubly important in the COVID-19 pandemic.
“When it comes to the determinants of health, you realize only a small portion — the government says 20% — is access,” Davis says. “Social determinants drive overall health. Sure, our community has been challenged, and we’re trying to do what we can through selective partnerships.”
A key partnership is in Belmont, a melding of Gaston County’s past and future. Within sight of the brick spires of circa 1886 Belmont Abbey College and monastery, as thousands of cars a day barrel along adjacent Interstate 85, is CaroMont’s new $196 million, 66-bed hospital. It sits on land owned by the abbey.
“It’s a game changer,” says Abbot Placid Solari, who is head of the abbey’s Benedictine monks. The hospital will cooperate with the college’s health care training programs.
The Belmont hospital is on the fast-growing eastern side of Gaston County across the Catawba River from Charlotte and positioned to compete for maternity and other potential Atrium patients. Peek downplays competitive aspects, but the location, only minutes from Charlotte Douglas International Airport, is an obvious bulwark against Atrium.
The Charlotte system has two dozen clinics, physician practices and urgent-care sites in Gaston, Lincoln and Cleveland counties. Since 2015, it has owned the 241-bed Atrium Health Cleveland hospital in Shelby. But Atrium agreed to change some of its practices after a 2018 settlement with federal and state authorities over anti-competitive measures that had restricted access to CaroMont and other providers.
Peek says the Belmont location pushes CaroMont deeper into the community it serves, bringing crucial health care closer to patients such as Jim Benfield. ■