WakeMed CEO dismisses UNC Health bid, says Atrium offer is best for system

Atrium Health has competition in its bid to acquire WakeMed from UNC Health that could give the Raleigh healthcare system more negotiating leverage.

However, WakeMed chief executive Donald Gintzig has made it clear in several media comments this week that the system prefers Atrium's offer and has no interest in talking with any other system.

Atrium would own and operate WakeMed, but WakeMed would continue as the same legal entity without dissolving or reincorporating. Atrium would gain six representatives on WakeMed's board with Atrium having the right to remove members.

WakeMed has three acute-care hospitals, a rehabilitation facility and a mental health hospital.

Although Atrium and WakeMed had been in talks for at least two years, the announcement of the proposed deal on May 1 surprised WakeMed's workforce, Raleigh Mayor Janet Cowell, much of the state's healthcare sector, Gov. Josh Stein, state Treasurer Brad Briner and state Auditor Dave Boliek.

A WakeMed statement released Thursday acknowledged the system reviewed an offer received from UNC Health on May 5.

"We will continue engaging with the community regarding our path forward. At this time, however, that path lies with Atrium Health."

Steve Smoot, president of the Atrium's North Carolina and Georgia divisions, said Atrium's $2 billion capital investment pledge to WakeMed "would bring the resources and track record to accelerate progress and expand what's possible in this region."

Gintzig said at a May 5 news conference that WakeMed would gain the resources from Atrium needed to better compete with Duke Health and UNC Health in its key markets, as well as extend its wellness services into southeast Raleigh in particular.

Meanwhile, Gintzig has been critical of UNC Health's presence in Wake County that's led by UNC Rex Hospital.

Wake County Board of Commissioners on May 4 voted to delay considering the Atrium offer for at least 90 days. Because WakeMed originated as a county hospital, commissioner approval is necessary for any takeover.

Wake Commissioner Don Mial said May 4 that the board delayed consideration to give the two healthcare systems "time to engage with the community so they, along with the county commissioners, can hear residents' comments and concerns about this combination. Community involvement is an important part of the work that we do."

Atrium and WakeMed held a joint news conference on May 5 to expound on their support for the transaction.

Dr. Thad McDonald, chairman of WakeMed's board of directors, said that combining with Atrium "is the best way we have found to continue to provide the highest quality of care for all we serve and to do so well into the future."

McDonald added: "I am acutely aware of the angst this announcement has caused with staff, with community leaders and with patients. When first presented with the possibility, our executive committee felt the same. But after two years of due diligence, we came to see the pure beauty of it."

Gintzig told Business North Carolina magazine Thursday that no other healthcare system was "anywhere close to what we were seeing and validating."

"The terms are done. All we're asking the county to do is give us permission, under the terms of the transfer agreement, to join the Atrium family."

Gintzig also said UNC Health "is a good organization, but their culture is different. They're in this community, and they don't care for all."

Atrium would enter the Raleigh and Triangle the same way it did in Winston-Salem with Wake Forest Baptist Medical Center - through acquisition.

Atrium took over Baptist in October 2020 after initially announcing plans to collaborate just on opening a Wake Forest University School of Medicine campus in Charlotte.

A key component of the Atrium-WakeMed deal could affect Winston-Salem, as WakeMed gains access to medical students at Wake Forest University School of Medicine's campuses here and in Charlotte. That includes new residency and fellowship opportunities at WakeMed.

Atrium has pledged to create a third life-science innovation district in Wake County, similar to downtown Winston-Salem's Innovation Quarter and Charlotte's The Pearl.

Prior to Atrium negotiating to acquire Baptist, Atrium and UNC Health entered advanced negotiations between August 2017 and March 2018 to form a joint operating company that would include a UNC School of Medicine facility in Charlotte before Atrium pulled the plug on the attempt.

Key elements of the potential combination collapsing were who would run the combined entity, a disagreement on who would be the majority owner of the joint company; and state elected officials concerned about combining a state and private health organization.

UNC Health said in its statement that the system and its medical school "greatly value our longstanding partnership with WakeMed - spanning nearly a half century - to train medical students and residents. "

UNC Health added that because of past and current partnerships, "we believe that even greater things can be accomplished together for our citizens. That's precisely why we have expressed interest in furthering our relationship with WakeMed."

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