UNC Health Care starts affiliation with Nash

Apr. 02, 2014 @ 06:01 PM

UNC Health Care, a growing Chapel Hill-based system that has partnerships with health care providers around the state, has launched one with Nash Health Care.
The two health care providers announced this week that their new management services agreement took effect Tuesday.
Through the deal, Nash will get access to UNC Health Care’s managerial, clinical and operational resources, and both systems hope to see cost savings. The deal does not involve the sale or exchange of assets.
However, spokesman Alan Wolf said in an email that Nash will pay UNC an annual fee to manage operations that will be based on revenue. He said it will be about 0.2 percent of revenue, which would have totaled about $420,000 last year.
Jennifer James, a UNC Health Care spokeswoman, said in an email that system leaders have been working to find efficiencies and to reduce costs as they have brought on new partners.
For example, she said that early in fiscal year 2013, the system opened a 93,000-square-foot Shared Services Center to co-locate purchasing, warehousing and supply chain activities. System leaders will look into expanding the warehouse capabilities to other partners beyond Rex Healthcare in Raleigh and to UNC, but she said that will have to be balanced with cost and distance factors.
The system has also started combining the back-of the-house or administrative functions such as information technology, communications and marketing work, of UNC Hospitals in Chapel Hill and Rex Healthcare in Raleigh.
Since the relationship with Nash is only a management arrangement, she said she doubts that system in Rocky Mount would be part of any consolidation of administration jobs if the system does extend that initiative to other partners.
But she did say the system has been able to eliminate unit cost differences between different providers in the system, and generally its partners are part of its contract with vendors.
“For instance, we commonly found that UNC Hospitals and Rex Healthcare purchased like items at different unit costs,” James said. “We have eliminated these differentials accessing the lower entity’s pricing.”
The not-for-profit UNC Health Care system now includes UNC Hospitals, the University of North Carolina a Chapel Hill School of Medicine, Pardee Hospital in Hendersonville, Chatham Hospital in Siler City, High Point Regional Hospital in High Point, Caldwell Memorial Hospital in Lenoir, Nash Health Care in Rocky Mount, Rex Health Care in Wake County, as well as community practices and home health and hospital services in seven central counties.