Summary:
The Wake County Board of Commissioners approved moving forward with the alliance between WakeMed and Atrium Health after agreeing to a $2 billion investment and a five-year price cap. The transaction, which still requires federal approval, faces strong criticism due to likely increases in healthcare costs and the loss of local control.
The Wake County Board of Commissioners approved On Monday, September 21, with 5 votes in favor and 2 against, the legal documents authorizing the integration of WakeMed Health & Hospitals with Atrium Health at the local level were approved.
The decision is a crucial step for the agreement, although the final transaction will have to be reviewed and approved by the Federal Trade Commission and the U.S. Department of Justice before it can be finalized.
The agreement, negotiated days before the vote, includes an investment of $2 billion in local infrastructure and $150 million in social programs.
Those who support the agreement argue that the alliance will strengthen the financial stability of WakeMed. Furthermore, they argue that it will allow for the expansion of health services and will guarantee new investments in infrastructure and community programs.
While residents and officials who oppose the deal have expressed concern about potential increases in healthcare costs, they also argue that it will increase pressure on emergency services and lead to a loss of local control over WakeMed.
The last-minute agreement on tariffs and investments
The commissioners' vote came after changes in the position of North Carolina Governor Josh Stein.
Four days before the vote, Stein had expressed reservations about the impact of the agreement on the cost of medical care and the origin of the funds allocated to the investments.
However, on September 20, one day before the vote, Stein withdrew his objection after agreeing that Atrium would incorporate new legally binding conditions into the agreement.
Among the commitments is a five-year limit on increases in commercial tariffs of WakeMed. During that period, the increases cannot exceed 1.5 times the annual increase in Medicare reimbursements.
Atrium also agreed that the $2 billion earmarked for capital works will come from its corporate reserves and not from operating income or WakeMed assets.
The agreement also includes increasing the charitable care obligation from 4.8% to 8% of adjusted annual revenue and creating the Wake County Whole Health program. Atrium will contribute $15 million annually for 10 years to the county for affordable housing, mental health, and food security programs.
“Given that Atrium has responded to our concerns, I have no objection to the strategic combination,” Stein stated.
Concerns about the cost of healthcare and premiums
Despite limits on fee increases, consumer advocates and economists have warned about the potential effects of hospital consolidation on costs for patients and taxpayers.
Researchers at Brown University's School of Public Health found that after Atrium acquired Wake Forest Baptist in 2020, hospitalization prices in that system increased 28% in four years, nearly a third faster than at other hospitals in the state.
For its part, the State Health Plan projects that the transaction could generate increases of between $7 and $15 per month in the premiums paid by its approximately 750,000 members, including teachers, police officers, public employees, and retirees.
“Those premium costs will go up for everyone, regardless of where they live, because the plan covers all 100 counties in the state,” testified Ardis Watkins, executive director of the North Carolina State Employees Association, during the public comment period.
WakeMed executives and their allies maintain that the agreement includes measures to protect patients and ensure the financial stability of the system.
Mary Nash Rusher, an attorney and member of WakeMed's board of directors, noted that the 8% increase in charitable care will help protect vulnerable populations. She also highlighted that the agreement prohibits certain collection practices, including wage garnishments and other legal actions. reports to credit agencies.
Dr. Leah Bug, a retired state employee, questioned the duration of the protections.
“The cap for the next five years is great, but what happens in year six, ten, or twenty?” he asked during the public comment period.
Nursing and emergency care
Veteran nurses and patient organizations expressed concern about potential operational cuts and an increased workload.
Critics of the deal pointed out that previous mergers involving Atrium have resulted in layoffs and an increased proportion of patients for nurse and the outsourcing of administrative services.
“Nurses save lives by detecting subtle changes,” testified a nurse at WakeMed. “This is impossible when workloads increase unsafely.”
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Local governance and control
WakeMed will retain its name, logo, and status as a 501(c)(3) nonprofit organization. However, Atrium will become its sole member and will have authority over the board of directors and the institution's strategic direction.
The local board will have 14 members: eight will be appointed by the county and six by Atrium.
Nathan Foster, from North Carolina Justice CenterHe questioned the governance structure and criticized the lack of public access to the statutes.
“Atrium will be the sole proprietor under a fancy word,” Foster stated.
Commissioner Tara Waters, who voted against the agreement, also questioned the process.
“Frankly, the unexpected twists have been nonstop,” Waters said.
“For residents, the questions are real: What will this mean for the cost of health care, the access "And what about quality? Why cede so much local control to a single member?" he added.
Commissioner Vickie Adamson, who also voted against the decision, called it "a sad day as we hand over a taxpayer-built hospital to a corporate conglomerate."
Among the commissioners who voted in favor, Safiyah Jackson defended the agreement.
“My vote protects WakeMed’s legacy and ensures care for our most vulnerable neighbors,” he said.
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