RALEIGH, N.C. (WPTF) –.After county leaders delayed a key vote, representatives from WakeMed and Charlotte’s Atrium Health met with reporters to lay out why the combination is the right choice for the region. WakeMed CEO Donald Gintzig (GENT-ZIG) says this move is a positive step.
Gintzig says the arrangement will allow for improvements in areas such as a cancer care, and also boost health care in Southeast Raleigh.
Steve Smoot with Atrium says the deal comes with major investment to improve WakeMed’s services and provide additional care for those up to 400 percent of the poverty line.
After a weekend flurry of calls for The Wake County Board of Commissioners to delay voting on what they call a “combination” of WakeMed with Atrium Health of Charlotte, commissioners delayed the agenda item Monday night (May 5).
Rose Hoban with NC Medical News spoke to Jeff Hamlin about the latest developments on Tuesday’s (May 5) edition of the WPTF Afternoon News.
In a press release from the county, it was stated that the board made this decision to provide time for the hospitals to engage with the community, so they – along with the County Commission – can hear residents’ comments and concerns about the combination.
“Community engagement is an important part of the work we do,” said Board Chair Don Mial. “While the joining of these hospitals may be positive for Wake County, we want to be fully open and transparent about the process, and that includes allowing ample time for public feedback.”
The merger, some of whom are calling a “takeover,” by the Charlotte entity, was first made public Friday, leading to many calls to delay the vote to examine the issue further.
WakeMed is asking the Commissioners to approve changes to two legal documents, enabling the hospital to proceed with regulatory reviews. These documents are the articles of incorporation, and the transfer agreement.
The articles of incorporation define how many members the Board can appoint to the WakeMed Board of Directors and where they must reside. The amended version of this document continues to allow the Commission to appoint eight members to the 14-member WakeMed Board of Directors. It also confirms that the eight appointees must live within Wake County. This ensures that Wake County and its residents will continue to have a say in how WakeMed meets its obligations after this combination.
The transfer agreement restates WakeMed’s commitment to maintaining or improving the level of healthcare services it provides to residents from across the region, including indigent and community healthcare. This is important, because if WakeMed does not meet the expectations listed in the document, the hospital reverts back to the County.
In the release, the county said The Board does not have the legal authority to approve the joining of WakeMed and Atrium Health. WakeMed’s requested action is just the first of many in a detailed process that involves the Federal Trade Commission and the U.S. Department of Justice.
The Commissioners are not involved in any way in WakeMed operations, the release went on to state, and they will not contribute any funding or any new property or assets to WakeMed as part of the proposed combination. The release also went on to note that a 1997 agreement and the statute say if the hospital ever stopped being a nonprofit community general hospital open to the public and providing indigent care, it could revert back to the county. Therefore, the Commission must approve any change in structure.
Reaction to the delay was swift, with State Auditor Dave Boliek issuing a statement:
“The Wake County Board of Commissioners made the right call in delaying the vote on the WakeMed and Atrium Health deal. There are several concerns that need to be addressed, and the people of Wake County and North Carolina deserve time to learn about and discuss the proposed transaction. A structural shift of this scale must be met with full transparency. State Treasurer Brad Briner, State Representatives Mike Schietzelt and Erin Pare, and Raleigh Mayor Janet Cowell brought much-needed awareness to this issue, and I thank the Wake County Commissioners for acting appropriately at this time.”
On the WPTF Morning News Monday, State Treasurer Brad Briner stated his desire for a delay in the vote to allow more time for examination of the deal and its impact on the State Health Plan which his office oversees.
The vote had been scheduled for Monday, May 4, less than three days after the proposed transaction was publicly announced. The item was listed on the board’s consent agenda, which typically does not require discussion unless a commissioner asks for it to be removed. The board has now indicated it will delay the vote.
Briner, who also chairs the State Health Plan, said the plan provides health insurance for about 750,000 people, including state and local employees, public school teachers, retirees and their dependents. He said the State of North Carolina and Wake County Public School System are among Wake County’s largest employers, meaning many people affected by the State Health Plan could feel the impact of the decision.
In his letter, Briner raised three main objections. He argued that hospital consolidation has often led to higher costs or lower quality of care, said WakeMed is financially strong enough to make promised investments without the consolidation and described the effective sales price of WakeMed as “ZERO.”
Briner said WakeMed reported $176 million in net income last year and has substantial borrowing capacity. He argued that Wake County’s continued growth and WakeMed’s financial position mean the proposed $2 billion in capital investment and new jobs would likely happen even without the Atrium deal.
“If you do not feel compelled to stand in the way of this consolidation that is sure to raise prices, then please at least demand consideration from the acquiror in the way that New Hanover and Buncombe Counties have in the past,” Briner wrote. He said Wake County should be able to establish an endowment of more than $1.5 billion from funds paid by Atrium, with a mandate to help keep health care affordable and accessible in Wake County.
Briner closed by saying the Department of State Treasurer stands ready to help analyze the transaction. He urged commissioners not to rush, asking them to learn from Buncombe County’s experience and either reject the proposal or set up an endowment to help offset what he called the “inevitable price increases” from consolidation.
A spokesman for Attorney General Jeff Jackson has said his office is watching the situation closely. The State Employees Association of North Carolina has also urged commissioners to vote no or delay the vote, warning that the deal could weaken the State Health Plan’s negotiating position and raise costs for state employees and retirees.
Supporters of the transaction say the combination would bring major investment to the Triangle, including a $2 billion investment to expand WakeMed locations in Raleigh and Cary, create more than 3,300 jobs and expand services for 1 million people across the state.
WakeMed President and CEO Donald Gintzig has said the combination would build on WakeMed’s more than 65-year legacy and help ensure a strong nonprofit health care future for the region. Atrium Health is part of Charlotte-based Advocate Health, one of the nation’s largest not-for-profit hospital systems.
WakeMed was created in 1961 as Memorial Hospital of Wake County and has expanded to include facilities throughout Wake County. Atrium has expanded across North Carolina in recent years, including through its 2020 combination with Wake Forest Baptist. A WakeMed-Atrium deal would give Atrium a major presence in the state’s three largest metro areas.
Stay with WPTF for the latest on this developing story.