UNC Health Sent WakeMed an Offer. The Raleigh Hospital Says It’s Sticking with Atrium.

Days after it became public that WakeMed intended to merge with Charlotte-based Atrium Health, UNC Health sent the Wake County system an offer. 

WakeMed quickly rejected it. 

Atrium’s plans to take control of WakeMed, an independent nonprofit health system, made a splash in the Triangle region earlier this month. The two health systems quietly planned their merger over two years, but surprised elected officials in the region when the plans appeared as an item on a Wake County commissioners’ agenda on Friday, May 1.

The county had planned to quickly approve its part of the merger at its May 4 meeting by tweaking legal documents from the 1997 asset transfer, when WakeMed first changed from a public entity to an independent nonprofit. 

Wake County still retains some real estate reversion rights related to WakeMed. Instead of approving the legal tweaks as planned, commissioners agreed to a 90-day pause while health leaders hold a series of listening sessions. State Attorney General Jeff Jackson’s office also said it plans to review the transaction.

WakeMed’s hasty announcement of a proposed Atrium deal rattled leaders and lawmakers from both sides of the aisle. Health care consolidations over the past decade have sent costs for patients soaring as competition shrinks. The number of independently owned hospitals in North Carolina has shrunk from 53 to 20 since 2000.

Health systems argue that strategic partnerships are a way to ward off mounting financial headwinds, but research suggests otherwise. 

At a media event on May 5, WakeMed CEO Donald Gintzig said the organization had fielded many offers over the years. He also insisted the hospital system was not “for sale.” 

UNC Health made an offer the same day, WakeMed confirmed. In a statement to The Assembly, WakeMed spokesperson Kate Wilkes said the offer was “unsolicited.” The terms are unclear.

WakeMed carefully reviewed it, Wilkes said, but is sticking with Atrium. 

“Our Board of Directors conducted a thorough, deliberate, two-year evaluation process for the future of WakeMed, which included potential partners,” she said. “The Board determined that a strategic combination with Atrium Health is in the best interest of WakeMed and the communities we serve.”

The Triangle is home to three major health care players: Duke Health based in Durham County, UNC Health in Orange County, and WakeMed in Wake County.

A UNC-WakeMed combination would reduce competition, Wilkes said, bringing the number of health systems in the county from three to two. UNC Health owns Raleigh’s Rex Hospital, one of WakeMed’s top competitors.

“Combined, WakeMed and UNC Health would control 80 percent of the healthcare market in Wake County,” she said. “We have heard from numerous stakeholders, including the State Treasurer, that maintaining robust competition is important for our rapidly growing region.”

State Treasurer Brad Briner has been outspoken in his criticism of the Atrium-WakeMed deal, as have State Auditor Dave Boliek and lawmakers representing the region. In 2018, UNC Health and Atrium backed out of a planned merger after regulatory inquiries, unable to agree on competing leadership strategies.

“We have reviewed UNC Health’s proposal, and we will continue engaging with the community regarding our path forward,” Wilkes wrote. “At this time, however, that path lies with Atrium Health.”

Like WakeMed, Atrium Health grew from a county-owned hospital into a regional system. In 2022, the Charlotte system merged with Illinois-based Advocate Aurora Health to form Advocate Health, now the nation’s fifth-largest nonprofit health system. 

A spokesperson for UNC Health could not immediately provide comment. The morning of May 5, spokesperson Alan Wolf told The Assembly it hopes decisions about health care will be grounded in a clear understanding of community needs as systems consolidate.

“We believe that because we are a passionately public institution, we are closest to understanding the healthcare needs within our local communities,” he wrote, “and best positioned to ensure the critical health infrastructure available to meet the needs of our mission.”