North Carolina nonprofit systems Atrium Health and WakeMed Health shared plans for a combination and multi-billion-dollar investment from the larger organization, though their proposed deal is already facing pushback and a procedural delay.
The proposed deal was unveiled Friday by the organizations in a release and documents shared by the Wake County Board of Commissioners, which appoints much of WakeMed Health’s board of directors and must vote to approve any such deal.
Atrium Health, which is based in Charlotte and part of the $39 billion Advocate Health system, has agreed to invest $2 billion over the coming years in WakeMed campuses should the deal go through. The parties said they expect the plans would create 3,300 new jobs over five years and increase access to care.
While Atrium is North Carolina’s largest hospital system, WakeMed comprises three acute care hospitals, a mental health hospital and a physical rehabilitation hospital that total 973 beds. It also runs standalone outpatient sites with 24/7 emergency departments plus physician practices in Wake County and employs nearly 12,500 people, according to its website.
The organizations said the combination would yield the state’s largest nonprofit behavioral health network of more than 360 inpatient mental health beds as well as a substantial virtual care network. The investments would support the construction of two new outpatient locations with stand-alone emergency departments, they said, while a partnership with the Atrium-affiliated Wake Forest University School of Medicine would open up clinical training including residencies and fellowships at WakeMed.
“WakeMed and Atrium Health are united in a shared commitment to serving our communities, and by building upon our complementary strengths, we can have an even greater impact on the health and well-being of Wake County and the entire state,” Donald Gintzig, president and CEO of WakeMed, said in a statement given to press.
The organizations’ deal would maintain WakeMed’s existing codified indigent care requirements—4.8% or more of WakeMed’s total adjusted revenues, according to the county board’s documents, with a contribution to a reserve fund for future services should it fall short in a given year. The $2 billion investment described by the parties are intended to occur within a decade of the deal’s close, per the proposed transfer agreement, but are broadly defined as “capital expenditures in furtherance of WakeMed’s strategic initiatives.”
The proposed deal would require months of regulatory review before it could go forward. WakeMed’s board has already unanimously approved the transaction during its April meeting, per documents, voting for the system to convert from a non-member nonprofit to a single-member nonprofit in which Atrium would be its sole member.
However, several state and local officials, over the weekend, raised calls for more time to review the deal’s terms and implications ahead of a necessary Wake County Board of Commissioners vote scheduled for Monday—since delayed, per an official—to approve WakeMed’s amended articles of incorporation.
North Carolina State Treasurer Brad Briner, who is also chair of the 750,000-member State Health Plan, on Saturday told the board in a letter that he has “serious concerns” regarding the deal, citing broader hospital consolidation deals that “see the same results over and over—either higher costs or lower quality of care.”
He said that the promised investments and job creation “will likely occur without this consolidation” due to WakeMed’s profitability, “substantial” borrowing capacity and favorable demographic makeup and growth. The treasurer also called for the board to “at least demand consideration” of an endowment “of well over $1.5 billion from funds paid by Atrium” that could be used to maintain healthcare affordability and accessibility.
“My background is in finances, but it does not take my expertise to know this is a raw deal,” he wrote while characterizing WakeMed’s effective sales price as “ZERO.”
State Auditor Dave Boliek, on Sunday, similarly wrote to the Wake County Board of Commissioners that the “proposed hospital takeover raises questions. The lack of transparency does not instill confidence, in fact, it calls for great scrutiny and explanation.”
As of Monday morning, the county board’s agenda for the evening meeting still shows the planned vote. However, Briner wrote Sunday evening on social media that “thankfully, the board is going to delay the vote.”
Atrium Health's parent system Advocate Health, formed in 2022 when Atrium combined with Advocate Aurora Health, operates 69 hospitals and over 1,000 total care sites across six states. It reported more than $1.5 billion in operating income (4.0% operating margin) and $4.6 billion of net income last year on $38.9 billion in total revenue.