Atrium Health plans to take control of WakeMed in a deal that could bring at least $2 billion in new investment to Wake County, documents filed with Wake County indicate. It also lets Atrium grow its footprint in the state.
County commissioners are expected to vote on a measure Monday that would help pave the way for the transaction. WakeMed’s board unanimously approved the transaction this month, allowing WakeMed to become affiliated with Advocate Health, county records show. Atrium is part of Advocate Health, one of the biggest nonprofit academic health systems in the country.
“This combination represents a significant next step in building upon this legacy, expanding our impact and ensuring a thriving nonprofit health care future for all we serve,” Donald Gintzig, WakeMed’s chief executive, said in a statement. “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.”
WakeMed is one of the smallest hospital networks in the state. By partnering with Atrium, WakeMed could gain easier access to clinical trials and capital, which could accelerate its expansion plans throughout the county as it seeks to compete with other providers such as UNC Health and Duke Health. It would also enable Atrium to expand its reach across the state, into the fast-growing Triangle market. Atrium promises the deal will create thousands of jobs.
The companies said the deal would improve the quality of healthcare, attract and develop medical talent and accelerate research and innovation, laying the foundation for more clinical specialties and subspecialties.
“The impact goes far beyond dollars,” Eugene A. Woods, chief executive of Advocate Health, said in a statement. “It means nationally recognized specialty care closer to home, more convenient and affordable care, including virtual visits, stronger mental health support, and 3,300 new health care jobs to help this community continue to thrive.”
The proposal, which would likely require additional regulatory review, was met with some skepticism on Friday.
Moments after news of the proposal became public Friday, State Treasurer Brad Briner said in a statement that he wanted the attorney general and the Federal Trade Commission to examine what the proposal could mean for North Carolinians. “If history is any guide,” Briner said, “this merger will not benefit the public.”
“There is a simple business principle that when suppliers consolidate and competition is reduced it is the consumers who suffer,” said Briner, who oversees the North Carolina State Health Plan, which provides coverage to hundreds of thousands of state employees, retirees and their families. “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.”
Attorney General Jeff Jackson plans to review the proposal carefully, said Bailey Aldridge, a spokesperson for Jackson. “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 said in a statement.
Under the agreement, Atrium would become the sole corporate member of the nonprofit that owns WakeMed “to ensure unified governance, consistent oversight, and alignment with system objectives.” WakeMed would continue as the same legal entity without dissolving or reincorporating, a summary of the agreement said. Atrium, in turn, has pledged to make a $2 billion capital commitment to further WakeMed’s strategic initiatives.
Wake County commissioners would still have the power to appoint eight of the WakeMed board’s 14 members. Atrium would be allowed to appoint the remaining six members. WakeMed’s existing leadership team is expected to stay in place after the transaction closes, a person with direct knowledge of the transaction told WRAL.
State law requires the Wake County Board of Commissioners, in conjunction with WakeMed’s board, to approve any amendments to WakeMed articles of incorporation. The board is expected to vote on those changes Monday. The companies are expected to discuss the transaction at a news conference on Tuesday.
“We welcome all efforts to create a healthier North Carolina,” Alan Wolf, a spokesperson for UNC Health, said in a statement. “As the healthcare landscape continues to evolve and consolidate, we hope decisions about care will remain grounded in a clear and direct understanding of the needs of the communities we serve.”