WakeMed’s Strategic Move: Partnering with Atrium Health for Future Growth
In a bid to remain competitive in the healthcare sector, WakeMed is looking to join forces with Atrium Health. This strategic decision is aimed at enhancing their financial strength and accelerating essential facility enhancements.
Although WakeMed’s current financial health is robust, CEO Donald Gintzig emphasized the importance of securing a partnership with shared values and greater financial clout. “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,” Gintzig stated.
As part of this collaboration, Charlotte-based Atrium Health plans to inject at least $2 billion into WakeMed over the coming decade, which is expected to generate over 3,300 new jobs in Wake County. “Atrium Health brings the resources and track record to accelerate progress and expand what’s possible for this region. That’s what this next chapter is about,” commented Steve Smoot, the president of Atrium’s parent company Advocate Health’s North Carolina and Georgia division.
The proposal first surfaced on the Wake County Board of Commissioners agenda, sparking public interest and debate. In response to public and official concerns, the commissioners postponed their decision for 90 days to ensure community involvement in the process.
Debate and Concerns
State Treasurer Brad Briner has raised concerns about the merger, citing research that suggests hospital consolidations can lead to higher healthcare costs. Briner, who oversees the State Health Plan for approximately 750,000 state employees and retirees, argued, “WakeMed’s really well managed and can finance all of these things on their own.”
Briner expressed surprise about the deal, noting that his office was only informed on Friday. “I would welcome a $2 billion investment from the Treasurer. I would welcome a $2 billion investment from the county and the state,” Gintzig responded, suggesting that such investments are unlikely without this partnership.
Gintzig also highlighted the necessity of external investment for significant upgrades, particularly at WakeMed’s New Bern Avenue campus. “If we add a tower at (WakeMed) North, it’s new patients and new revenue… When you spend close to a billion dollars redoing the Raleigh campus it’s to care for the same number of people and maybe a few more without a big increase in revenue,” he explained.
Historical Context and Future Prospects
The relationship between WakeMed and Atrium began with a joint effort on a Covid-era oncology project. This partnership laid the groundwork for more extensive cooperation as both systems recognized their similarities. Dr. Thad McDonald, chair of the WakeMed Board, noted that the idea of a partnership was considered two years ago, amid concerns about Medicaid funding and state regulations.
“I am acutely aware of the angst this announcement has caused with staff, with community leaders and patients,” McDonald acknowledged, adding that after thorough consideration, the board saw the potential benefits of the merger.
Gintzig argued that an outright sale would not provide the same level of control over community investments. Instead, joining Atrium will allow WakeMed to guide where and how healthcare facilities are developed, particularly emphasizing investments in southeast Raleigh.
Gintzig concluded, “This gives us, WakeMed, the ability to influence that. If we’re sold, they make that decision.”
