Atrium Health looking to scoop up smaller nonprofit health system in $2B deal
The largest hospital system in North Carolina is looking to expand its foothold in the state as part of a $2 billion deal.
Atrium Health, a subsidiary of Advocate Health—one of the largest nonprofit health systems in the U.S.—said it's looking to take over WakeMed, a community health system located in and around the state capital region of Raleigh.
For Atrium, the acquisition would mean it expands to a new area of the state, taking over the smaller nonprofit health system which is currently governed by a volunteer board of directors. WakeMed was initially publicly financed and operates as a public benefit organization.
To put the size discrepancy into context, Atrium has over 40 hospitals in the state—WakeMed has three.
The deal, if successful, would be conducted via a $2 billion investment to include expanded services in the Raleigh-Durham region of North Carolina, which promises to bring new specialty services and additional healthcare jobs.
Subject to regulatory approval
Wake County officials in North Carolina would need to vote to approve the transaction. That is expected to take place on Monday.
WakeMed has already agreed to the deal internally, with Donald Gintzig, the group’s chief executive saying that the buyout would ensure a “thriving nonprofit healthcare future for all we serve.”
“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,” Gintzig wrote in a statement.
Notably, WakeMed is one of the smallest healthcare delivery systems in the entire state. In the capital region, its primary competitors are Duke Health and UNC Health, both of which are operated by their respective academic institutions.
If successful, the shift would put Atrium Health into direct competition with Duke and UNC for primary, specialty and emergency services in one of the fastest growing regions in the country.
“The impact goes far beyond dollars,” Eugene A. Woods, chief executive of Advocate Health, said in a statement. “It means nationally recognized specialty care closer to home, more convenient and affordable care, including virtual visits, stronger mental health support, and 3,300 new health care jobs to help this community continue to thrive.”
The North Carolina Attorney General, Jeff Jackson, could intervene if the takeover is deemed to reduce competition and raise prices in the state.
For now, the public is waiting for Wake County commissioners to review the details, which have yet to be finalized.
According to a report from the Charlotte Observer, the current terms have Atrium Health taking over the nonprofit that operates WakeMed completely, without that entity reincorporating.
A public press conference has been announced for Tuesday, whereby more information is expected to be revealed to the public.
This is a developing story.
Chad is an award-winning writer and editor with over 15 years of experience working in media. He has a decade-long professional background in healthcare, working as a writer and in public relations.