WakeMed's planned consolidation with Atrium Health could cause monthly premiums for every N.C. State Health Plan member to increase between $7 and $11, Executive Administrator Tom Friedman told the plan's Board of Trustees on Friday.
Friedman said that Atrium charges between 15 and 40 percent more for services than WakeMed, depending on exactly what a patient is receiving. By looking at the mix of services members recieve at each system, the Health Plan was able to estimate how Atrium implementing the average prices it charges elsewhere would impact overall premiums.
"If you're a teacher in Cherokee County, you're paying that much more. If you live in Brunswick County, you're paying that much more," Friedman told the board.
The planned strategic consolidation is on hold, waiting for the Wake County Board of Commissioners to approve changes to WakeMed's articles of incorporation and land transfer agreements for some of the parcels the system's facilities sit on. The board was slated to vote on those changes in early May with just three days notice, but voted for a 90-day pause after outcry from members of the public and elected officials including N.C. State Treasurer Brad Briner.
Briner, who oversees the Health Plan, has harbored concerns about what additional healthcare consolidation in the state could do to costs. In recent years, for-profit HCA has taken over Asheville-based Mission Health and Novant has purchased the New Hanover Regional Medical Center.
After Friday's Health Plan board meeting, Briner said he's been "surprised" that WakeMed hasn't reached out to him or Friedman to discuss concerns about pricing.
"You can solve that objection: Give us a lower price. I think the answer as to why is because that's the whole point, is to raise prices so that they can spend it on facilities. And you can be the judge of whether that's worth it, but our central objection has never been countered," said Briner, a Republican.
Briner and WakeMed President and CEO Donald Gintzig have traded barbs since WakeMed's plans became public in early May. Briner was the first elected official to publicly critique the deal, and Gintzig has pointedly indicated that he believes critics should try to understand the ramifications of the agreement before commenting on it.
WakeMed response
WakeMed officials argue that joining Atrium will actually help it control costs, primarily by allowing what is now a stand-alone hospital system to purchase equipment and medicine at scale as a member of Advocate Health. Atrium's parent system is the third-largest nonprofit healthcare system in the United States.
"Uniting with Atrium Health will not raise costs; scale will help with reducing our costs for supplies, medicines and equipment," Kristin Kelly, a WakeMed spokeswoman, wrote in a statement.
Kelly also wrote that the reimbursements WakeMed receives for providing care have not kept pace with the rising costs of actually delivering that care as healthcare inflation raises prices for drugs, labor and supplies.
WakeMed officials, including Gintzig, have expressed concern that if the system remains a stand-alone, it will not have the financial might necessary to continue upgrading facilities or to keep up with nearby competitors Duke Health and UNC Health.
"The expectation is that increased scale, care coordination, and operating efficiency will help support access and help constrain the total cost of care. We are committed to providing value to the patients we serve," Kelly wrote.
In addition to the Wake County approval, the consolidation will need to undergo Federal Trade Commission and U.S. Department of Justice review to determine if it will "substantially lessen competition." N.C. Attorney General Jeff Jackson, a Democrat, has also said that his office is reviewing the deal.
2027 plans and WakeMed's status
Outside of anything that happens between Atrium and WakeMed, Friedman indicated this week that the Health Plan will propose and ask the board to approve premium increases at its July meeting.
Those increases, Friedman said, will be significantly less than hikes implemented this year, aiming for a 1% of salary increase for members on the standard plan and a 2% of salary increase for members on the plus plan.
Friedman also clarified that WakeMed will not be going out of network for State Health Plan members under the plan's new tiered benefit structure.
"We are not taking WakeMed out of network. Members, next year, will have the same benefit at WakeMed as they do today. It might be a little cheaper in a couple areas," Friedman said after a May 28 community forum about the merger.
Friedman and other Health Plan officials do not anticipate that WakeMed will be one of the State Health Plan's preferred providers, which will offer healthcare at the lowest costs available to members.
But they do expect that it will be in the Health Plan's Access tier, Friedman said, which will offer members benefits at the same prices available this year.
"We need access. We need to make sure that people in the Wake County area have a place to deliver babies. That's a big deal. They are one of the largest in the country at delivering babies," Friedman said.
