WakeMed officials say hospital system will remain independent

jmurawski@newsobserver.comNovember 21, 2013 

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An ambulance arrives at the emergency department at WakeMed off New Bern Avenue Wednesday. WakeMed lost $10 million in 2013. The Raleigh organization, in search of a new CEO, has set for a strategy to cope with the changing health care landscape.

CHUCK LIDDY — cliddy@newsobserver.com Buy Photo

CORRECTION: This article previously reported former WakeMed CEO Bill Atkinson was fired. He resigned over differences with the board. Correction made at 3 p.m. Tuesday, Dec. 3, 2013.

RALEIGH -- WakeMed Health & Hospitals officials said Thursday that they would reject takeover attempts by competitors and are determined to remain an independent hospital system as the 8,500-employee organization deals with its first financial loss in its 52-year history.

“There’s no danger of that,” said William McBride, a Raleigh lawyer and WakeMed’s board chairman. “We’re going to be absolutely independent. There’s no question about that.”

But they acknowledged the organization will have to continue expanding its network of doctors to supply patient referrals, and increasingly rely on partnerships with rival hospitals and other organizations that provide medical care.

In an hourlong meeting with News & Observer editors and reporters, WakeMed officials presented the organization’s mounting challenges as a consequence of a weak economy and growing pressure on the health care industry to get runaway costs under control.

They also said those trends are disproportionately affecting WakeMed, and said the Raleigh hospital system’s $10 million operating loss this year is in large part a consequence of its historical commitment to providing free medical services to indigent people.

“The challenge is going to be, how do you continue being all things to all people?” said WakeMed’s interim CEO, Donald Gintzig. “We can’t deliver all the care that this community needs without partners.”

The financial loss, reported in early October, came just weeks after CEO Bill Atkinson resigned after a disagreement with WakeMed’s board over the future direction of the hospital system. In recent months, the hospital system has instituted some layoffs, eliminated executive bonuses, closed several nursing homes and raised some prices to try to stabilize its finances.

McBride praised Atkinson’s 10-year tenure but said Atkinson and WakeMed’s board had “slight differences in point of view” on the direction of the organization.

WakeMed expects to hire a CEO this summer in a national search that is attracting top candidates, McBride said.

One of WakeMed’s cost-saving strategies is an “accountable care organization” designed to minimize federal penalties under the Affordable Care Act. The project will begin in January and will deploy health assistants to call patients after they are discharged to make sure they take their medications and schedule follow-up doctor appointments in a bid to prevent preventable hospital readmissions.

The program will cost about $2 million in its first three years but is expected to save more than it costs to operate. Such programs allow medical providers to share up to 50 percent of the savings they generate from following new federal efficiency guidelines. Failing to meet the benchmarks will result in financial penalties.

Overall, WakeMed officials depicted an emerging health care industry in which the base of insured people is broadened, but hospital stays are reduced, and patients are steered to cheaper alternatives, such as clinics. WakeMed is developing a model of joint ownership and other arrangements with clinics and medical practices.

“We think we’re going to continue to succeed as an independent (entity) for another 52 years,” McBride said. “That’s the goal. We think the ability’s there with the right people.”

Murawski: 919-829-8932

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