Wake County Commissioners to Vote on WakeMed’s Merger with Atrium Health
TL/DR –
The Wake County Board of Commissioners is set to vote on altering WakeMed’s articles of incorporation, laying groundwork for a merger with Charlotte-based Atrium Health. In the event of a merger, Atrium will invest at least $2 billion in capital over the next decade for WakeMed’s strategic initiatives. However, the proposed merger has been met with mixed reactions, with concerns raised about the potential impact on competition, consumer costs, and healthcare quality.
The Wake County Board of Commissioners is set to vote on amendments to WakeMed’s articles of incorporation and a land agreement, paving the way for a merger with Charlotte-based Atrium Health. Atrium is set to invest at least $2 billion over the next decade towards WakeMed’s strategic initiatives.
This merger, approved by the WakeMed Board of Directors, ensures that the hospital remains a nonprofit, with Atrium as its sole member. WakeMed’s president and CEO, Donald Gintzig, notes that “WakeMed and Atrium Health share a commitment to community service; by harnessing our mutual strengths, we can improve health and wellbeing throughout Wake County and the entire state.”
Both WakeMed and Atrium are nonprofit healthcare systems, with Atrium’s parent company, Advocate Health, ranking as the third-largest nonprofit health system in the US. Post-merger, Atrium will operate hospital systems in Winston-Salem, Raleigh, and Charlotte.
WakeMed operates three community hospitals in Wake County, with nearly a thousand patient beds, including Wake County’s only Level I trauma center and the county’s only pediatric intensive care unit.
Atrium’s planned investment
Atrium plans to invest $2 billion over the next decade for:
- Redevelopment and expansion of the New Bern Avenue campus.
- Expansion of Cary Hospital and WakeMed North Hospital.
- Construction of two new Healthplex locations.
- Development of a 56-acre medical complex in Garner.
WakeMed states these investments will create 3,300 new jobs in Wake County over the next five years. The merger is also expected to enable WakeMed to extend financial assistance to patients who earn 400% of the federal poverty level, up from the current 300%.
Treasurer objections
N.C. State Treasurer Brad Briner expressed concerns about the proposed merger, citing potential negative impacts on consumers, as healthcare mergers often lead to increased costs. State Health Plan administrators have been encouraging competition between state systems, and a merger could complicate these efforts.
Research, including a 2022 review by the Rand Corporation, shows hospital mergers typically result in a 10% price increase. The N.C. Attorney General’s Office plans to carefully review the planned merger.
Board restructuring
The hospitals are proposing changes to the nonprofit’s 14-member board of directors. County commissioners will still appoint eight members, but the remaining six would be chosen by Atrium. Revised articles of incorporation would require a two-thirds majority from WakeMed’s Board of Directors to nominate an appointee who would then need approval from county commissioners.
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