A proposed partnership between Cape Fear Valley Health System and Bladen County Hospital received final approval from Cape Fear Valley’s Board of Trustees on Wednesday, March 26.

The Board of Trustees approved a five-year lease of Bladen County Hospital effective Sunday, June 1. On March 25, the Bladen County Board of Commissioners also gave its approval to conclude the lease negotiations.

The partnership will help support a neighboring county and keep a valuable community resource open for Bladen County residents.

Last year, Bladen County Hospital requested proposals to partner with the Elizabethtown facility. Cape Fear Valley was one three organizations to submit bids, and it was the only not-for-profit organization to respond.

Under the lease agreement, Cape Fear Valley will manage Bladen County Hospital’s daily operations. In return, Cape Fear Valley will make annual lease payments of $1 million. That money will be used by Bladen County to make much-needed capital improvements to the hospital, including repairing the hospital’s roof.

Cape Fear Valley will also invest $500,000 a year in new equipment for the facility. The equipment will belong to Cape Fear Valley.

At the end of the initial five-year term, the lease can be renewed for up to four additional five-year terms, or either party can end the agreement with six months’ notice.

Cape Fear Valley also has the option to request to purchase the hospital starting at the end of the third year of the lease. However, Bladen County will have the option to instead choose to terminate the agreement and not sell the hospital. No reduction in hospital services can occur during the lease without the approval of Bladen County.

Financial analysis of the lease arrangement shows positive cash flow over five years for Cape Fear Valley – not including revenue from any additional patient volumes that might result. Cape Fear Valley already treats approximately 350 patients annually from Bladen County.

Most Bladen County patients will continue to be served locally. However, they may be referred to Fayetteville for tertiary services not available in Elizabethtown. Cape Fear Valley will help recruit specialists in select areas, such as orthopedics, pediatrics and urology, to Bladen County Hospital.

“This is an exciting opportunity for us to partner with Bladen County Hospital and help keep a local hospital open,” said Mike Nagowski, Chief Executive Officer for Cape Fear Valley. “This is an important strategic partnership for us as we continue our growth as a regional healthcare delivery system.”

With 619 licensed beds, Cape Fear Valley is the 11th largest health system in the state. A private, not-for-profit organization, Cape Fear Valley is Cumberland County’s largest non-governmental employer with more than 4,000 employees. The health system has an annual budget of $574 million in net revenue and more than 875,000 patient visits annually.

Bladen County Hospital is a public, not-for-profit 58-bed facility that includes a 24-hour Emergency Department, 40-bed Medical/Surgical Unit, an Intensive Care Unit and an up-to-date Birthing Center.

It is one of just 20 federally designated Critical Access Hospitals in the state, and one of only two in Southeastern North Carolina. The Critical Access Hospital (CAH) Program was created in 1998 as a safety net to ensure healthcare services to rural areas of the U.S. Under the lease, the hospital will retain its CAH designation.