WakeMed acquisition by Atrium delayed for public input. Decision could come in August

Atrium Health's offer to acquire WakeMed was delayed by the Wake County Board of Commissioners for at least 90 days on Monday.

The commissioners voted unanimously to remove the topic from the agenda. County approval is necessary for Atrium to take over WakeMed.

Although the two healthcare systems had been in talks for at least two years, acclerating in recent weeks, Atrium's announcement of the proposed deal on Friday surprised WakeMed's workforce, much of the state's healthcare sector, and at least two Republican Council of State members.

Atrium is the parent company of Atrium Health Wake Forest Baptist since October 2020.

Wake Commissioner Don Mial said 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."

Mial added, "While the joining of these hospitals may be positive for Wake County, we want to be fully open and transparent about the process, and that includes allowing ample time for public feedback."

Mial urged WakeMed and Atrium Health to listen to the community's insights, answer their questions and make the changes needed to address any concerns.

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

The systems held a joint news conference on Tuesday 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."

He stressed WakeMed is financially sound.

Donald Gintzig, WakeMed's president and chief executive, said 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.

When asked about the fast-track attempt at getting the commissioners' approval, Gintzig said that "it would have been nice to get everyone engaged in it, but big strategic decisions don't happen in the public realm and in the community realm."

"You don't want to get your employees scared and you don't want to get your community scared.

"I think 5, 10, 20, 25 years down the line, and I think our biggest failure to this community would be failing to do this."

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

That includes expanding WakeMed's reach from 300% to 400% of the federal poverty level, ensuring patients eligible for "deeply discounted care" receive it as a community safety net, Smoot said.

The deal also requires state and federal regulatory approvals, including the OK of State Attorney General Jeff Jackson.

State Treasurer Brad Briner asked Sunday that Wake commissioners delay the vote, writing in a letter that he has serious concerns about the deal on behalf of the State Health Plan and its 750,000 members.

"Our constituents will feel the gravity of the decision you make," Briner said. "I look forward to the attorney general (Jackson) and Federal Trade Commission carefully scrutinizing this proposal and what it could mean for the people across our state."

The state attorney general's office conducts antitrust reviews of hospital merger applications. "If history is any guide, this merger will not benefit the public," Briner said.

Gintzig said during Monday's presentation, "I look forward to sitting down with the state treasurer and educating him and sharing information with him."

Atrium would own and operate WakeMed, but WakeMed would continue as the same legal entity without dissolving or reincorporating. WakeMed has three acute-care hospitals, a rehabilitation facility and a mental health hospital.

Advocate Health owns Atrium. Advocate Health is the nation's third-largest, not-for-profit healthcare system.

The Charlotte-based not-for-profit system gained the unanimous support of the WakeMed Board of Directors in large part because of its pledge of $2 billion in capital investment into the system, along with the addition of 3,300 new jobs.

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 also 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.

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