WakeMed leaders share vision, long-term goal for merging with state's largest health care provider
RALEIGH, N.C. (WTVD) -- WakeMed leaders on Tuesday defended a proposed partnership with Charlotte-based Atrium Health as state officials voiced concerns about costs, transparency and the effect of another major health system merger.
"It really is not about today, not even about tomorrow, not even about next year, but where we are five, 10, 15, 20 years down the line," said WakeMed President and CEO Donald Gintzig.
Under the proposed agreement, Atrium Health would invest $2 billion into WakeMed, with WakeMed joining Atrium's broader health system while maintaining a majority of seats on its Board of Directors. Further, they project the deal would lead to the creation of 3,300 new health care jobs. WakeMed leaders stressed the arrangement is not a sale but a partnership they say will allow the hospital system to expand services more quickly.
The agreement, announced last Friday, was originally scheduled for a possible vote by the Wake County Board of Commissioners on Monday. Commissioners instead voted to defer action for at least 90 days following strong pushback from elected officials and community members.
In a statement following the delay, State Auditor Dave Boliek wrote:
"The Wake County Board of Commissioners made the right call in delaying the vote on the WakeMed and Atrium Health deal. There are several concerns that need to be addressed, and the people of Wake County and North Carolina deserve time to learn about and discuss the proposed transaction. A structural shift of this scale must be met with full transparency. State Treasurer Brad Briner, State Representatives Mike Schietzelt and Erin Pare, and Raleigh Mayor Janet Cowell brought much-needed awareness to this issue, and I thank the Wake County Commissioners for acting appropriately at this time."
The delay was also welcomed by state employee Nicole Hunter, who said residents and public workers deserve more input before a decision is made.
"I want them to get more feedback from the citizens and the state employees, because at the end of the day, this can change our quality of life tremendously," Hunter said.
Hunter has previously been a patient at WakeMed and praised the level of care she received.
"I did love the fact that the doctors and the staff were patient with me, and they coached me through what I was going through at the time," said Hunter, who expressed hesitation over the possible effects of consolidated services.
WakeMed President and CEO Donald Gintzig said hospital leadership spent two years conducting due diligence before concluding the partnership was the best path forward, even as some officials questioned why details were released only late last week.
"Big strategic decisions don't happen in the public realm and in the community realm and with hundreds of people involved in it," said Gintzig.
Both Gintzig and Steve Smoot, executive vice president and president of Advocate Health's North Carolina and Georgia division, worked to address price considerations.
"It's going to help us in purchasing power and access and grants and hopefully philanthropy in those areas. Ultimately, when we are able to provide more services, we're going to help keep people healthier, which in the long run will lower health care costs in that regard," said Gintzig.
"One of the things that we will do going forward is raise the poverty level for charity care up to 400%, so those between 300 to 400% of the poverty level will have deeply discounted care. Anyone below the 300% poverty level won't even get a bill. And that's how we function today. What does that mean? You know, I didn't fully understand that a family of four that is in the poverty, the 400% poverty level, makes close to 100,000 to $132,000 a year. At 300%, it's below 100,000. So this is a huge commitment to our community because we appreciate how expensive health care is," said Smoot.
State Treasurer Brad Briner questioned the value of the deal during a one-on-one interview with ABC11 on Monday, saying WakeMed already has the financial strength to grow independently.
"WakeMed is going to grow. WakeMed is well-run financially. It's got borrowing capacity to make these investments all on its own. Already. Atrium doesn't bring anything new in that regard, in my view. And we've looked at the financials. We run the Local Government Commission. We control the Medical Care Commission. We issue bonds like this all the time. I think we know what we're talking about financially. So that issue is separate. WakeMed's going to do it anyway. Those jobs will likely be created anyway. Those facilities will be built anyway. The question is whether combining with Atrium by itself makes sense ... So if you're insisting on selling it, which I really hope you don't, at least run a process," said Briner.
Gintzig responded Tuesday, defending WakeMed's assessments.
"It's not a bid, right? Because we're not for sale. This is a choice. Second, I look forward to sitting down with the Treasurer and educating him and sharing information with him. I feel pretty confident I know our debt capacity pretty well. I've been doing this for 40 years. I know what the rating agencies who look at our debt capacity have said. I know what consultants say in looking at our debt capacity, and I look forward to sharing that with him. I would welcome a $2 billion investment from this Treasurer. I would welcome a $2 billion investment from the county and the state to make that happen. But I don't see that happening without this combination. And I don't see us finding a partner that would be willing to come in and join us and make that kind of investment without expecting a very different long-term impact on what we do for the community, because you're not going to find someone that's going to want to come in and invest in Southeast Raleigh in particular along those lines," Gintzig said.
