UNC-Atrium health care deal hits a snag over who will be in control

CEOs describe health care partnership as a 'marriage'

UNC Health Care CEO Bill Roper and Carolinas HealthCare CEO Gene Woods call the new partnership between the two health care systems a "marriage" of health care in N.C..
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UNC Health Care CEO Bill Roper and Carolinas HealthCare CEO Gene Woods call the new partnership between the two health care systems a "marriage" of health care in N.C..

Negotiations to form one of the nation’s largest health care companies in North Carolina are snagged on a sensitive issue: Who will control the joint organization overseeing some 60 hospitals and 90,000 employees.

UNC Health Care CEO William Roper provided an update Tuesday after discussing the matter in a closed session with a special committee of the Board of Governors of the 17-campus UNC System. The committee was formed to review the proposal but has expressed frustration in recent weeks over the lack of information it has received from Roper on the negotiations.

Roper said UNC and Charlotte’s Atrium Health have resolved a number of issues but the talks now come down to control. That decision will ultimately have implications for UNC’s medical research and the UNC School of Medicine, of which Roper is dean.

“I had a lengthy conversation with our Charlotte friends this morning, and I think we are making some progress in narrowing the differences but we have not yet reached agreement,” Roper said in an interview.

“Both sides are interested in the key questions of who’s in charge, how are decisions going to be made, how can we balance the interests so that both sides feel fairly represented in the decision-making process. Those are the big questions and we’re still working on them.”

UNC Health Care in Chapel Hill and Atrium Health announced in August they planned to enter talks about combining operations. They said at the time the move was needed to improve health care access in the state and control costs. Atrium was called Carolinas HealthCare System until earlier this month.

UNC Healthcare CEO Bill Roper and Carolinas HealthCare CEO Gene Woods say the location of a headquarters for the new partnership between UNC Health Care and Carolinas HealthCare has not been decided.

Roper said he and his negotiating team are responsible for protecting the fiduciary interests of UNC Health Care and its medical school, a state-owned asset.

“We’re taking appropriate care and diligence to make certain that this is structured in a way the things that are important to us are protected,” Roper said. “I know the public has expressed some impatience with this process but I would just ask people to understand this is an important matter and we want to get it right.”

Atrium officials declined to comment.

As announced last August, Atrium CEO Gene Woods, 53, would be CEO of the new company, which has yet to be named, and Roper, 69, would chair the board of directors. Roper said Tuesday that after his term is up on the new company’s board, Atrium’s board chairman would then take a turn as chair of the new company, with terms rotating between Atrium and UNC.

But the length of the terms has yet to be decided, Roper said, among other issues still unresolved.

“If it’s not properly balanced then we won’t have a deal,” Roper said. “It’s as simple as that.”

Special committee member Leo Daughtry, a Smithfield lawyer and former longtime state legislator, said Roper didn’t tell the committee anything it didn’t already know.

“This has always been the issue – governance,” Daughtry said. “We know what the issue is.”

Daughtry has said in the past that the special committee lacks adequate information to assess the deal’s implications for UNC, and nothing has changed in that regard.

Roper’s update also didn’t satisfy N.C. Treasurer Dale Folwell’s concerns about rising health care costs. Folwell oversees the State Health Plan, which covers 750,000 retirees, teachers and state employees and is UNC Health Care’s single biggest customer.

Folwell last week asked UNC to put up $1 billion to guarantee that a partnership with Atrium would bring down health care costs. On Tuesday, he said Roper’s update provides no such assurance and underscores the huge stakes involved in the talks.

“He’s always known that as soon as this deal was done that UNC Health Care would lose control of this taxpayer asset,” Folwell said.

John Murawski: 919-829-8932, @johnmurawski

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