UNC Health said it approved a 10-year management services agreement with Appalachian Regional Healthcare System, the main hospital system serving the Boone and High Country area. The move would improve health care and approve access for the region, officials said.
Financial details were not disclosed.
Appalachian Regional said in February it would consider an affiliation with a larger organization. It is the latest of a flurry of mergers, acquisitions and management agreements involving N.C. hospitals as the largest systems take greater control of smaller operators. Appalachian operates two hospitals, nine outpatient sites and 14 medical offices, according to its website.
The Boone transaction doesn’t reflect a takeover or any financial pressures at Appalachian, which is strong fiscally, says Rob Hudspeth, a senior vice president. It is not receiving capital investment from UNC.
Rather, hospital leaders believe the agreement will enhance patient care and enable the system to improve its operations and be better positioned to attract and retain employees because of its new ties with UNC, he says.
“Our board believes in local governance and decision-making,” he says.
Appalachian considered eight not-for-profit systems in and out of North Carolina as potential partners, then narrowed the list to three before selecting UNC, Hudspeth said. He said the Boone group considered Winston-Salem-based Novant Health and Charlotte-based Atrium Health, which controls Wake Forest Baptist in Winston-Salem. Both of those not-for-profit groups are closer geographically to Boone than Chapel Hill.
The agreement continues UNC Health’s expansion across North Carolina through both purchases and management agreements with smaller hospitals, complementing its flagship facility and medical school in Chapel Hill. UNC Health is comprised of 14 hospitals, including Hendersonville, Lenoir and Morganton in western North Carolina
“Our thorough process led us to UNC Health, one of the most recognized and trusted health systems in the country,” Appalachian Regional board Chair Thomas Dale said in a press release. “Through our MSA, we will be able to deepen our primary care base, improve accessibility and enhance the level of services we provide today.”
UNC Health Chief Operating Officer Steve Burriss said the affiliation “will bring great benefits to the people of this region, providing enhanced access to state-of-the-art care while preserving the provider-patient relationships residents have come to expect and enjoy.”
The agreement will enable Appalachian Regional to expand its specialty and subspecialty services; gain purchasing power through its affiliation with a big system; and benefit from UNC’s talent and recruitment efforts, officials said.
“Our Board understands the importance of having a relationship with a top-tier organization that shares our commitment to rural healthcare,” Appalachian CEO Chuck Mantooth said in the release.
Appalachian will retain its not-for-profit status and local governance structure, according to the agreement.