UNC Health Care scraps merger plan
BY AMELIA HARPER
Rocky Mount Telegram
Tuesday, March 6, 2018
ROCKY MOUNT — UNC Health Care’s planned affiliation with Carolinas HealthCare System, now Atrium Health, has been abandoned.
The two entities announced plans in August to form a joint operation or “virtual merger” that would create one of the largest health care organizations in the country. Details of the merger were supposed to be worked out by the end of 2017, but that date was pushed back to March 31 amid growing concerns that the plan would result in increased health costs for hospitals, including Nash UNC Health Care, that were part of the planned joint operation.
“After months of discussions and due diligence, UNC Health Care and Atrium Health have determined that we cannot satisfy our mutual organizational goals through a proposed partnership and joint operating company,” said Dr. William L. Roper, CEO of UNC Health Care, and Dale Jenkins, chairman of the UNC Health Care Board of Directors, in a joint news release. “We have agreed that the best path forward for both organizations is to identify specific opportunities to work together — as we have previously — to improve health care across the state and region.”
When the virtual merger was announced last year, Ian Buchanan, interim CEO of Nash UNC Health Care, said he felt the merger would benefit residents in eastern North Carolina.
“Rural health care will be a priority for this organization, so I think this will mean better access to health care in our community,” Buchanan said in a previous interview. “The reason Nash Health Care joined with UNC Health Care was to be able to expand services to this area, and this affiliation will help expand services to the region even more.”
The planned virtual merger of UNC Health Care and Carolinas HealthCare would have created an organization with more than 90,000 employees and would have encompassed more than 50 hospitals in North Carolina and South Carolina. In North Carolina, the joint venture would have included more than 40 percent of the hospitals in the state.
Since that time, a number of things changed. On Feb. 7, Carolinas Health Care System announced a name change to Atrium Health and another proposed merger with Navicent Health in Georgia, a move that would add five hospitals and more than 4,500 employees to Atrium.
Concerns of a potential health care monopoly spurred concerns about the financial effect of the merger. In January, officials of Blue Cross, Blue Shield reportedly wrote a letter to the architects of the proposed joint operation voicing opposition to the merger because of a study that indicated that similar mergers had resulted in an increase in health care costs for all institutions involved.
That prompted N.C. State Treasurer Dale Folwell to ask representatives of UNC Health Care to provide the State Health Plan with a $1 billion performance bond guaranteeing that any merger with Atrium Health would not increase medical costs for North Carolina taxpayers, according to a statement from Fowell’s office.
The State Health Plan provides health care coverage to almost 730,000 teachers, state employees, retirees, current and former lawmakers, state university and community college personnel and their dependents, the statement said.
But representatives of UNC Health Care declined to provide any performance guarantees that the combined entities would be able to lower health care costs, Fowell said.
Fowell said Friday he feels the decision to drop plans for the merger was the right one.
“We never acquired enough information to ensure that the combination of these two health care entities would not have a negative impact on the taxpayers of North Carolina,” he said in a written statement.