WakeMed defends Atrium hospital merger plan in first community session
Tuesday evening provided Triangle residents their first opportunity to ask WakeMed leaders about their desired merger with Charlotte-based Atrium Health.
This public forum, the first in a series of six hearings WakeMed has scheduled before the end of the month, drew a few dozen people — local officials and current WakeMed board members included — to the flagship WakeMed campus in East Raleigh.
From the outset, WakeMed president and CEO Donald Gintzig disputed claims that the much larger Atrium was buying his health system.
“It’s not, in spite of what you’ve read in the media, a takeover, an acquisition, a sale, a buying, an apocalypse, or whatever you may hear,” Gintzig said during opening remarks. “What it is, is two like-minded organizations with similar histories and missions coming together for a greater good.”
On May 1, WakeMed and Atrium announced plans to combine their health systems through an agreement that would see Atrium Health and its parent company, Advocate Health, invest $2 billion in WakeMed. This money, Gintzig said, is needed to improve WakeMed’s main Raleigh hospital and expand additional facilities in Cary, Garner and North Raleigh.
“We also need access to capital, buildings, equipment, medicine, supplies, everything costs more,” he said during a presentation that included a slide on how much smaller the independent WakeMed is than UNC, Duke and especially Atrium. “Size and scope matter,” text on the screen read. Atrium Health and WakeMed are both nonprofits. Advocate Health, which combined with Atrium in 2022, is currently the nation’s third-largest nonprofit health system.
WakeMed officials expected Wake County commissioners to sign off on the deal three days after it was announced, but community pushback over a perceived lack of public oversight caused commissioners to postpone their decision for 90 days.
County officials must approve changes to the agreement that in 1997 allowed the county-owned Wake Medical Center to become a private nonprofit. If the county does eventually approve these changes, the merger would then need to withstand potential scrutiny from the North Carolina attorney general’s office and the Federal Trade Commission.
Critics, including State Treasurer Brad Briner, say hospital consolidation across the country has contributed to higher prices and worse services.
Others, including State Auditor Dave Boliek, say even if the combination ultimately makes sense, the rush to bring it to Wake County commissioners raised questions. The proposal was announced late on a Friday afternoon. The commissioners’ vote was scheduled to take place without discussion as an item on the consent agenda the following Monday.
In a May 3 letter, State Employees Association of North Carolina executive director Ardis Watkins urged Wake County commissioners to either reject the deal or demand “public listening sessions.”
“The evidence is clear that when large health systems absorb independent or community hospitals, prices rise and competition disappears,” Watkins wrote. Wake County delayed its decision the next day.
Who would control the board?
Many of these pointed critiques were absent from Tuesday’s initial listening session.
Once Gintzig concluded his remarks, attendees broke into smaller groups where appointed facilitators heard inquiries about the potential merger and relayed them to the WakeMed CEO during a Q&A portion. Facilitators asked if the merged hospital system could create a for-profit division (Gintzig said the county-appointed board could protect against this) and whether Atrium’s $2 billion investment would be enough to keep WakeMed from considering further consolidation.
One facilitator asked Gintzig about reports that Atrium would have considerable control over the future WakeMed board of directors. Gintzig dismissed this with a joke, calling it “a rumor started by the Russians or the North Koreans or somebody else who hasn’t read the documents.”
Under the proposed merger, Atrium would appoint six members to WakeMed’s 14-seat board of directors — a power WakeMed currently has. Wake County would continue to appoint the remaining eight seats. While Atrium wouldn’t appoint a majority of board members, the Charlotte health system could appoint its members without county approval.
The eight positions Wake County would continue to appoint would need approval from two-thirds of the entire board — at least 10 of 14 directors. This means a Wake County appointee would require support from at least some Atrium-appointed members.
Atrium could also remove Wake County’s appointees at any time with “cause,” according to the articles.
Mary Nash Rusher, a current WakeMed board member and partner at the law firm McGuireWoods, said the focus on board appointments emphasizes a division that doesn’t actually exist in practice.
“We don’t know who is a county-appointee or a WakeMed-appointee,” she told The News & Observer in an interview after the listening session. “Our interactions are simply a board with a common mission and a common cause, and that’s how we would anticipate it would continue to operate (under Atrium). Other than probably more insight being brought to the table.”
Learn more
WakeMed is holding the following meetings to provide information about a planned merger with Atrium Health and hear from residents.
The meetings are in-person and begin at 6 p.m., unless otherwise noted.
- A virtual forum is scheduled May 20 at noon.
- May 21, Tarboro Road Community Center, 121 Tarboro St., Raleigh.
- May 26, WakeMed North Hospital, 10000 Falls of Neuse Road, Raleigh
- May 27, WakeMed Cary Hospital, 1900 Kildaire Farm Road, Cary
- May 28, Chavis Heights Community Center, 505 Martin Luther King Jr. Blvd., Raleigh
