WakeMed leaders say deal with Atrium essential to growth, care for those below poverty level

WakeMed leaders say a plan to let Charlotte-based Atrium Health take over the Raleigh-based hospital chain is essential to the WakeMed’s growth, including offering care for those below the poverty line. 

The plan has generated skepticism and opposition from state and local officials on both sides of the aisle who worry the deal could raise the cost of healthcare. The deal would give Atrium — , which is part of Advocate Health, one of the nation’s biggest hospital chains — a foothold in the Triangle.

A vote by Wake County officials that would enable the deal was initially scheduled for Monday. That vote was delayed after pressure from state officials.

On Tuesday, WakeMed and Atrium leaders spoke about the proposed deal, saying they wanted to clear up any "misconceptions." 

"We are here today to formally announce that a strategic combination with Atrium Health is the best way we have found to continue to provide this quality of care to all and to do so well into the future," Thad McDonald, chairman of WakeMed’s board of directors, said at a news conference. "I am acutely aware of the angst this announcement has caused with staff, with community leaders and patients."

McDonald said that WakeMed's executive committee had the same reaction two years ago when first presented with the possibility. 

"After two years of due diligence, we came to see the pure beauty of it," McDonald said. The board approved the transaction this month, according to a summary of the deal sent to county officials. 

State Treasurer Brad Briner, who oversees the State Health Plan, has objected to the deal. The plan has about 750,000 members, including state employees, retirees and their dependents.  He worries that the deal will increase healthcare costs for consumers and has said that WakeMed is in a fine financial situation to borrow money on its own — without Atrium — to finance its expansion plans. 

McDonald said Tuesday that the plan would allow WakeMed to move forward together in "strategic combination with Atrium" to ensure a strong, sustainable future. He said that even though WakeMed is financially sound, the current healthcare landscape is "more and more challenging for safety net hospitals like ours." 

Donald Gintzig, WakeMed’s chief executive, said those challenges include rebuilding its Raleigh campus in southeast Raleigh and closing the health disparity gap. 

"It really is not about today, not even about tomorrow, not even about next year, but where we are five, 10, 15, 20 years down the line," Gintzig said.

Gintzig knowledge that WakeMed is in the "most competitive healthcare market" in the state with strong competitors such as UNC Health and Duke Health. 

"Now WakeMed has the opportunity to be able to compete in a good way and collaborate in a great way to improve the health of this community," Gintzig said. 

Atrium is making a $2 billion capital investment to help modernize WakeMed's southeast Raleigh facility and create more than 3,000 new healthcare jobs, said Steve Smoot, the president of the North Carolina and Georgia division of Advocate Health. 

Smoot said the deal would also build on North Carolina's largest virtual care network, adding at least 100,000 visits each year so that patients can see doctors faster from their own living room, in addition to expanding mental health support for those in need before it becomes a crisis. Smoot also said the deal would bring more advanced specialty care, including cancer, neuroscience and pediatrics closer to home.

"One of the things that we will do going forward is raise the poverty level for charity care up to 400%, so those between 300 to 400% of the poverty level will have deeply discounted care," Smoot said. "Anyone below the 300% poverty level won't even get a bill. And that's how we function today."

Smoot said a family of four at 300% below the poverty level makes below $100,000 per year. 

"This is a huge commitment to our community because we appreciate how expensive health care is,” Smoot said. “By coming together, we're not just expanding financial assistance. We're strengthening our ability to keep care affordable in a health care environment. That's becoming more complex and more costly every year.".

For the deal to go through, the Wake County Board of Commissioners needs to approve changes to the articles of incorporation that govern WakeMed. Even though WakeMed is run as an independent nonprofit, the county still has power over board seats and interests in the hospital system's real estate from when the county oversaw the hospital. 

If the Wake County commissioners ultimately agree to advance the transaction, it’s possible state or federal regulators could seek to block the deal. North Carolina Attorney General Jeff Jackson is reviewing the proposed transaction. Briner, the state treasurer, says he wants the Federal Trade Commission to examine it, too.

Gov. Josh Stein wants the state legislature to give the attorney general’s office more legal power to have a say on deals like this. “The Department of Justice needs more tools in the toolbox to ensure these types of transactions are transparent and actually benefit the public,” a Stein spokesperson said in a statement.