Atrium Health, Wake Forest Baptist Health and Wake Forest University announced Wednesday that they plan to join in a deal that will bring a four-year medical school to Charlotte — a major announcement for a city that lacks such a campus but has long desired one.
The deal also means that the three groups will combine in a yet-to-be-determined way as a new health care system. The impact of that big change for patients was not immediately known.
The announcement came just several weeks after UNC Charlotte Chancellor Philip Dubois and the UNC School of Medicine dean wrote an Observer opinion column stating that now was not the right time to develop a four-year medical school in Charlotte, citing financial challenges.
Charlotte-based Atrium, the metro area’s dominant hospital system, Wake Forest Baptist and Wake Forest University signed a memorandum of understanding Wednesday. Wake Forest Baptist and the university are based in Winston-Salem.
Entering the agreement allows the groups to start negotiations, with the goal of entering into a final deal about the new health care system this year, according to a news release.
For Charlotte, the combination would result in Wake Forest School of Medicine — part of Wake Forest Baptist Health — having a campus in the city, the groups said. Where that school might go was not disclosed. But the groups said it could come to Charlotte over the next few years.
“This is an exciting prospect that will have positive state and national impacts in addition to benefiting the Charlotte and Winston-Salem communities,” Nathan Hatch, president of Wake Forest University, said in a release. “By strengthening medical education in Winston-Salem and bringing a medical school to Charlotte, we will open many doors for future health care leaders and also play a nationally leading role in research.”
The three groups also said their plan would make health care more accessible and affordable for the nearly 6.8 million residents near the systems’ service areas, which include cities and rural markets.
It was not immediately clear what the combined organization would be called.
In a statement, Atrium said the signing of Wednesday’s agreement signals “the very beginning of in-depth discussions regarding the specific details of what our coming together could ultimately become.”
Having a four-year, freestanding medical school in Charlotte is an asset that industry officials, economic developers and others have long called for.
Charlotte is among the biggest U.S. cities without such a school, though the region has medical training programs. For example, UNC School of Medicine in Chapel Hill has had a satellite campus in Charlotte since 2010 under a partnership with Atrium.
Charlotte also lacks a four-year medical school despite health care being one of the region’s biggest employers.
According to Atrium, it employs roughly 35,000 people in the Charlotte metro area and nearly 65,000 across the Carolinas and Georgia. By comparison, Bank of America and Wells Fargo employ around 15,000 and 25,700, respectively.
In a statement, Charlotte Mayor Vi Lyles praised the planned medical school, saying it would benefit Charlotte’s economy and the health of the community.
“We have been envisioning bringing a four-year school of medicine to Charlotte area for decades, and to witness the possibility of this becoming a reality is truly incredible,” Lyles said.
Question of timing
UNCC’s Dubois and A. Wesley Burks, dean of UNC School of Medicine, wrote in their opinion column the timing wasn’t right for such a school in the city now.
The public and private funding challenges to build a medical school in Charlotte “are simply insurmountable at this time,” they wrote.
In 2015, a nine-member task force whose members included representatives from UNC’s School of Medicine, Atrium Health and UNCC examined whether a new medical school could be justified, Dubois and Burks wrote. The task force concluded that the most feasible approach was to build a school in partnership with UNC School of Medicine and Atrium Health, Dubois and Burks wrote.
“Rigorously vetted financial estimates made it clear, however, that even a small pilot program would be very expensive,” Dubois and Burks wrote.
But Dubois came under fire on social media for not forging a deal with Atrium to open a medical school in Charlotte first. “Phil Dubois has diminished the future of the university by failing to collaborate with Atrium health to establish a public medical school in the city of Charlotte,” @jamin_watson wrote on Twitter.
A UNCC spokesman did not immediately respond to a request for comment.
Prior deal scrapped
The Wake Forest deal is the latest effort by Atrium to get bigger.
Last year, Atrium said it had ended discussions with UNC Health Care to form a joint operating company, citing an inability to reach an agreement to form a mega-system. Also last year, Atrium closed on a deal to combine with Georgia-based health care system Navicent.
In its statement, UNC Health said that although its deal with Atrium fell apart, it supports any partnership that improves the health of all North Carolinians and increases access to health care while making it more affordable.
On Wednesday, Atrium, Wake Forest Baptist and Wake Forest University touted their proposed combination as a way to improve the health of the region and beyond as well as to conduct medical research.
“Phenomenal things can happen when like-minded partners, committed to the same transformative vision, come together in new ways to better serve our patients and communities,” Atrium CEO Gene Woods said in a statement.
He noted, for example, that Wake Forest School of Medicine and Wake Forest Baptist Health are national leaders in studying how to help people age with a much higher quality of life.
Wake Forest School of Medicine focuses its research on aging and Alzheimer’s disease, cancer, cardiovascular disease, diabetes and obesity, neurosciences and regenerative medicine.
A large system
Atrium is the largest hospital system in the Charlotte metro area, ahead of No. 2 Novant Health. Both are nonprofits.
Across the Charlotte metro area, Atrium already owns 11 hospitals, in addition to Levine Children’s Hospital and its behavioral health hospitals. Atrium also manages or has affiliations with hospitals across the Carolinas.
Wake Forest Baptist is also a nonprofit. It employs more than 19,000 people. In addition to its main hospital and Brenner Children’s Hospital in Winston-Salem, the system includes five hospitals in Guilford, Wilkes, Davidson, Davie and Alleghany counties, according to its website.
Wake Forest University owns part of Wake Forest Baptist. The university’s involvement in the deal would include granting diplomas for the Charlotte medical school.
Barak Richman, a Duke Law School professor specializing in health care policy, said that while he wasn’t familiar with specifics of Wednesday’s deal, few hospital mergers have improved the quality or efficiency of care.
“And most greatly increase health care costs,” he said. “We should learn from our national experiences.”
‘It should have been UNC’
Paul Umbach, founder and president of Pittsburgh-based Tripp Umbach healthcare consulting firm, called Wednesday’s announcement a big deal for Charlotte.
The school would bring more than medical students to Charlotte, he said. It would also enhance the quality of health care in the region and draw investments in bio-science spinoffs, he said. Pittsburgh, for example, generates about $1 billion a year in funding from outside the city for medical research, he said.
Umbach, who’s been calling for Charlotte to have a medical school for years, said he was surprised that the UNC system wasn’t the one to bring a school to the city.
About four years ago, Umbach shared results with health care and business leaders in Charlotte of an analysis he did on the city’s need for a medical school. He found that the fastest and best way to develop a four-year school was through “a public partnership” between the existing UNC School of Medicine-Charlotte Campus and UNCC.
“I was anticipating that there’d be a medical school at some point in Charlotte,” he said on Wednesday. “I strongly believed that it should have been UNC.”
In a statement, UNC Health Care, based in Chapel Hill, said it has a long history of partnering with Atrium Health and Wake Forest Baptist on initiatives, such as the UNC School of Medicine campus in Charlotte.
“We look forward to learning more details of their agreement,” UNC Health Care said. “We anticipate working with them in the future on important issues to our state.”