The Wake County Board of Commissioners plans to vote Monday to alter WakeMed's articles of incorporation and a land deal between the county and hospital system to pave the way for a merger with Charlotte-based Atrium Health.
Under the agreement, Atrium will commit to at least $2 billion in capital investments over the next decade to boost WakeMed's "strategic initiatives."
The WakeMed Board of Directors approved the merger at its April meeting, according to briefing materials prepared for the Wake County Board of Commissioners. Under the agreement, the hospital would remain a nonprofit with Atrium as its sole member.
"WakeMed and Atrium Health are united in a shared commitment to serving our communities, and by building upon our complementary strengths, we can have an even greater impact on the health and well-being of Wake County and the entire state," Donald Gintzig, WakeMed's president and CEO, wrote in a statement.
Like WakeMed, Atrium is a not-for-profit hospital system. Its parent company, Advocate Health, is the nation's third-largest nonprofit health system. With the merger, Atrium would operate hospital systems in Charlotte, Raleigh and Winston-Salem.
"This combination is about meeting people where they are — with care that fits their lives and stays rooted in the community. It starts with a $2 billion investment in Wake County — one of the largest health care commitments this region has ever seen — but the impact goes far beyond dollars," Eugene A. Woods, Advocate's CEO, wrote in a statement.
WakeMed operates three community hospitals in Wake County that have nearly a thousand patient beds. Those include the health system's flagship facility on New Bern Avenue, a 208-bed Cary hospital and a 77-bed facility on Falls of Neuse Road.
The New Bern Avenue hospital contains Wake County's only Level I trauma center, and its children's hospital includes the county's only pediatric intensive care unit.
The system also owns a rehabilitation facility and a mental health hospital, in addition to a number of outpatient facilities.
Atrium's proposed investment
The $2 billion Atrium plans to invest over the next decade will include:
- Redevelopment and expansion of the New Bern Avenue campus, including additional inpatient beds.
- Expanding the Cary Hospital and WakeMed North Hospital, adding what the press release calls "much-needed" inpatient beds.
- Building a pair of new Healthplex locations that offer stand-alone emergency departments and outpatient services.
- Continuing with development of a 56-acre medical complex in Garner, including a 46-bed acute care hospital and 150-bed mental health hospital.
WakeMed claims the investments will lead to 3,300 new jobs over the next five years in Wake County.
"We are confident that this combination will further our commitment to our patients and their families and help us deliver on our mission and more for decades to come," Gintzig stated in the release.
The hospitals also said the merger will allow WakeMed to offer financial assistance to patients who earn 400% of federal poverty level, up from 300% now.
Officials from WakeMed and Advocate Health plan to hold a press briefing Tuesday to discuss the merger in greater detail.
Treasurer pushback
N.C. State Treasurer Brad Briner, a Republican, expressed alarm about the potential merger on Friday.
"There is a simple business principle that when suppliers consolidate and competition is reduced it is the consumers who suffer. This has been proven to be true time and again in the health care landscape, where prices continue to rise and patients are left with mounting medical debt," Briner wrote in a statement.
The treasurer oversees the N.C. State Health Plan, which provides health insurance to about 750,000 North Carolinians.
Health Plan administrators have been trying to push healthcare costs down for their members by encouraging competition between the state's systems, an effort that a merger between a pair of hospital systems with major footprints could complicate.
Research has shown that mergers between hospitals typically result in an increase in costs for consumers. A 2022 review of that research conducted by the Rand Corporation found that mergers of hospitals in the same state could lead to price increases of about 10%.
"Although there is a unifying theme that mergers of hospitals closer to each other led to higher price increases, we still do not know how close the proximity needs to be to warrant regulatory attention," the Rand researchers wrote.
Notably, both UNC Health and Duke Health will continue to operate hospitals and other medical facilities in Wake County.
Bailey Aldridge, a spokeswoman for N.C. Attorney General Jeff Jackson, said the AG's office plans to carefully review the merger.
"Our focus is on ensuring patients can continue to get high-quality healthcare they can afford, no matter where in the state they seek care," Aldridge wrote in a statement.
A revamped board
The hospitals are asking Wake County commissioners to alter the makeup of the non-profit's 14-member board of directors.
County commissioners would still ultimately appoint eight members of the board, just as they do now. But the remaining six would be selected by Atrium, instead of by being nominated by other non-commissioner-appointed board members.
And under the revamped articles of incorporation, at least two-thirds of WakeMed's Board of Directors would need to nominate an appointee who would then be approved by county commissioners.
