A Reckoning Emerges In Proposed WakeMed-Atrium Hospital Deal

Less than 10 regular business hours. That’s how long health care executives gave the public to digest their plans to merge Raleigh and Charlotte’s largest hospital systems. 

The Wake County Board of Commissioners had a meeting set for Monday, May 4, at 5 p.m., where it was expected to sign off on legal changes to allow the once publicly owned nonprofit, WakeMed, to merge with Charlotte-based Atrium Health. 

After quietly examining the proposal for two years, WakeMed’s board had unanimously approved the deal last month. The county’s required legal adjustments were nestled in a consent agenda, a step of local governance considered so mundane that batches of routine items get approved in one swoop. 

On the Friday evening before the vote, spokespeople for both organizations declined to answer questions about the transaction. They instead said to wait until a press conference, scheduled for the Tuesday morning after the board vote. 

After some state officials and Raleigh Mayor Janet Cowell lambasted the deal and the lack of transparency, Wake County commissioners agreed to pause and collect community input before taking further action. 

At what was supposed to be the public unveiling of the deal on Tuesday, hospital executives retreated into defense. 

“Big strategic decisions don’t happen in the public realm,” WakeMed CEO Donald Gintzig tried to explain at the press event. 

For many, the merger was a bridge too far. 

Across the state and country, health systems have consolidated rapidly, reducing competition and raising prices for patients. When hospitals gain market share, they can extract leverage over insurance companies by charging more for their services, triggering higher premiums for consumers. 

A large body of research shows these mergers are raising prices. There is no clear evidence that the quality of care improves. Gintzig said Atrium’s commitment to affordability and caring for underserved populations would improve Wake County’s health outcomes, which in turn, could lead to overall reduced medical costs. Pressed to explain how costs for patients could actually cool given what the data shows, Gintzig said: “Expensive is how you define it.” 

In 25 years, employee insurance premiums have more than quadrupled. Per-person health care spending in the U.S. approached $15,500 in 2024.

“It’s common knowledge among those who study this—but it’s not common knowledge in the policy world—how dangerous, costly, and pernicious hospital systems with market power are,” said Barak Richman, co-director of the Health Law Program at the George Washington University Law School.

Richman, a former Duke University professor, said most North Carolina leaders have been “rather silent” about health care consolidations in the past, and have lacked the urgency to tackle them. “It’s hard to deal with an elephant when it’s already grown to its full size,” he said.

It appears a collective reckoning has arrived. The WakeMed and Atrium proposal–not only the merits of the deal but also the tactics to push it through–has elicited a bipartisan and populist angst. 

The disquiet arrives as health care systems have been on a consolidation tear. Partnerships, they say, are necessary to control costs, combat stagnant federal payments for aging and low-income patients, and help keep up with growing demand. 

In North Carolina, the number of independently owned hospitals has shrunk from 53 to 20 since 2000. Several recent, high-profile deals have made public officials less willing to accept the explanations of health care giants. 

WakeMed could be next. Or it could mark a turning point. 

Taking on the ‘Cartels’

The attempted WakeMed-Atrium merger has agitated Republicans and Democrats alike. 

Former State Treasurer Dale Folwell, a Republican who left office at the end of 2024, made taking on the hospital “cartels” a cornerstone of his tenure and tried to block deals. But some perceived him as a cantankerous, rogue force. In 2024, Folwell made an unsuccessful bid for governor and finished 45 points behind GOP nominee Mark Robinson, who lost to Gov. Josh Stein. 

But the appetite to fight hospital systems has grown. 

Current State Treasurer Brad Briner has distanced himself from his predecessor, but also taken a Folwellian tone on occasion: In a fight last fall involving the State Health Plan, the insurance that covers 748,000 state employees, retirees, and their dependents, Briner called Duke Health executives “greedy.” 

Tuesday afternoon, in a video emailed directly to State Health Plan members, Briner cast doubt on WakeMed’s explanation that it needs a strong partner to get the money necessary to expand and replace its aging southeast Raleigh campus. 

“They’re going to tell you that they can’t,” he told the camera. “I can tell you that’s not true.”

WakeMed and Atrium say the marriage is a familial culture fit. They’re right: Both systems were born from county-owned, mid-century hospitals that gained independence and have grown to meet the needs of their respective communities. They both lacked a prestigious academic anchor, a shortcoming Atrium solved in its 2020 combination with Wake Forest Baptist. 

Gintzig describes WakeMed as an underdog in the Triangle, competing with health care juggernauts Duke Health and UNC Health. But WakeMed has held its own, and Gintzig said he’s been approached in each of his 13 years as CEO “by just about everybody” to sell or partner. 

He said Atrium is different. The Charlotte-based system similarly values care for underserved populations, he said, and has expanded into a multistate enterprise with the resources and expertise WakeMed could tap into. 

The state auditor’s office doesn’t typically weigh in on hospital mergers, but in a Sunday letter, Dave Boliek told Wake commissioners he was “examining areas of potential engagement.” 

Boliek spokesperson Randy Brechbiel said the auditor’s involvement shows his continued push for transparency. “If that leads to areas where previous State Auditors may not have gone toward, the people of North Carolina benefit from additional oversight and exposure of how their government is operating,” he said in a statement. 

Neither state Senate leader Phil Berger nor House Speaker Destin Hall has weighed in on the deal and did not respond to inquiries for this article. 

Public Skepticism

Stakeholders question whether state leaders have done enough to scrutinize previous health care deals, or if they lack the tools they need to intervene. Or both. 

The state has seen a spate of massive hospital combinations or sales: In 2019, the for-profit HCA Healthcare purchased the independent nonprofit Mission Health in Asheville; Atrium combined with Wake Forest Baptist in 2020; Novant Health bought the county-owned New Hanover Regional Medical Center in 2021; and Atrium and Advocate Aurora Health coalesced to form Advocate Health Care, the third-largest nonprofit system in America in 2022.  

Both the Wilmington and Asheville sales resulted in the creation of well-funded community foundations that are required to direct millions of dollars to local organizations each year. But public skepticism has grown as the new hospital owners have settled in. 

Quality of care in New Hanover has slumped, and the new foundation has struggled with politicization and executive churn, having three leaders over a four-year period.

Asheville’s tale is even more concerning. Nurses have repeatedly striked, and researchers couldn’t identify any lasting improvements.

In a social media post Monday, N.C. Republican Party spokesman Matt Mercer said Stein failed to guard against the dangers of consolidation during his time as attorney general, since he approved the Asheville deal. Stein sued HCA in 2023 over failing to uphold promises it made to cement the purchase. 

Left-leaning groups have similarly accused Stein of not doing enough to influence the outcome in Wilmington. 

Richman, the health law professor, said antitrust laws in North Carolina and elsewhere are generally under-enforced, even though both state and federal regulators have the ability to use them. At the federal level, prosecutors intervened in just 13 out of more than 1,000 hospital mergers between 2002 and 2020. 

“This is not a story where we’re all just helpless,” Richman said. Even so, most state attorneys general have limited resources, he said, and have to decide what issues to prioritize. Legislatures play a role too, he said, in making sure state justice departments have enough resources to elevate health care antitrust scrutiny. 

Stein thinks the legislature should step up. In a statement, Stein spokesperson Onotse Omoyeni said the state Department of Justice needs “more tools in the toolbox,” and that the governor continues to call on lawmakers to give that office more power to intervene in these deals.

Mark Hall, a Wake Forest University law professor, told The Assembly in 2024 that Stein probably pushed “the limits of what he could do” in Asheville and Wilmington. “I don’t think the law allows him to do more than he has been doing.”

In 2018, Stein may have spooked UNC Health and Atrium executives when they attempted to merge when he made civil investigative demands under a broad law that allows the attorney general to inspect corporations. That deal ultimately fell through because the systems couldn’t decide on who would be in charge. 

Stein also aided the U.S. Department of Justice in its 2018 settlement with Atrium over imposing anticompetitive contract requirements for insurers. But his role with Atrium’s growth has been limited, in part because the Charlotte-based health care system has expanded through convoluted “strategic partnerships” that avoid formal state approvals. 

Republican state Sen. Jim Burgin, co-chair of the Senate Health Committee, said Atrium’s strategy, and the deals in Wilmington and Asheville, prompted Stein to seek more teeth for the attorney general’s office. “He saw the glaring holes in what the state could and couldn’t do,” he said. 

In 2023, the two worked closely crafting legislation that would give the attorney general more power, and to reshape the hospital consolidation approval process. Burgin said they got close to getting the law passed, but progress fizzled after Stein announced his candidacy for governor. 

In hindsight, Burgin said he needed to get more people involved to take another swing. He approached newly seated statewide elected officials Briner, Boliek, and Attorney General Jeff Jackson. “All three of them are on board,” he said. 

Burgin’s latest iteration of the legislation, Senate Bill 978, would require and empower all three officials to review, scrutinize, and reject proposed consolidations. If any of the three objects, they must sue the acquiring hospital in court, and allow a local judge to either approve or reject the transaction.

The bill, which was filed last week, is designed to apply to most major hospital consolidations, not just sales, and also strengthens public notice and hearing requirements. 

While Briner may support the spirit of increasing state oversight, he isn’t sold on the bill’s current framing. Because his office regularly negotiates with large health care systems representing the State Health Plan, he told The Assembly, “It may not be wholly appropriate for me to have an official objection vote.”

Boliek’s spokesperson said the auditor welcomes the opportunity to provide additional accountability and transparency. A spokesperson for Jackson said his office will review the proposed transaction, but didn’t immediately answer whether he supports the proposed legislative changes. 

House Democrats have embraced Burgin’s bill, and included identical language in one of the proposed laws the minority caucus is promoting as part of its legislative health care agenda. 

Stephanie Strickland, spokesperson for the North Carolina Healthcare Association, said the group is prioritizing conversations with lawmakers about the bill. In 2023, the group opposed the legislation, arguing approvals would become overly cumbersome. 

“Hospitals are facing significant financial pressure driven by inflation, rising labor and supply costs, and reimbursement rates that have not kept pace with the cost of care,” Strickland said in a statement. “In this environment, organizations are evaluating a range of strategies to maintain access to care and support long-term sustainability.”

A new rule the latest legislation contemplates: capping nonprofit hospital CEO compensation at 400 times the lowest-paid worker. For Atrium’s parent organization, Advocate, that would mean a roughly 40% cut to Gene Woods’ $25.8 million salary.

It’s unclear whether both chambers will take up Burgin’s bill in this year’s short legislative session. But the swift backlash could be a signal that lawmakers, and the public, are fed up with rising medical costs. 

“One of the problems with health care is that we wait until people are really sick,” said Richman, the law professor. 

The same could be said for health care policy.