The proposed merger between WakeMed and Atrium Health is sparking concerns over potential hikes in health plan premiums for State Health Plan members in North Carolina. Tom Friedman, the Executive Administrator of the plan, indicated that monthly premiums could increase by $7 to $11 due to Atrium’s higher service charges compared to WakeMed.
Friedman outlined that Atrium’s service costs range from 15% to 40% more than those of WakeMed, depending on the type of service. By analyzing the service utilization patterns of members, the plan estimated the impact of Atrium’s pricing on overall premiums. “If you’re a teacher in Cherokee County, you’re paying that much more. If you live in Brunswick County, you’re paying that much more,” Friedman emphasized to the board.
The merger awaits approval from the Wake County Board of Commissioners, which has delayed its decision for 90 days following public opposition and input from officials like N.C. State Treasurer Brad Briner. Briner, who supervises the Health Plan, is apprehensive about the cost implications of healthcare consolidations, citing past acquisitions like HCA’s takeover of Mission Health and Novant’s purchase of New Hanover Regional Medical Center.
After the Health Plan’s meeting, Briner expressed surprise that WakeMed had not reached out to discuss pricing concerns. He remarked, “You can solve that objection: Give us a lower price. I think the answer as to why is because that’s the whole point, is to raise prices so that they can spend it on facilities.”
WakeMed’s Perspective
WakeMed claims the merger with Atrium would help control costs by enabling bulk purchases of equipment and medications as part of Advocate Health, Atrium’s parent company. Kristin Kelly, a spokeswoman for WakeMed, stated, “Uniting with Atrium Health will not raise costs; scale will help with reducing our costs for supplies, medicines, and equipment.”
Adam Wagner
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N.C. Newsroom
WakeMed’s leadership, including CEO Donald Gintzig, has voiced concerns about remaining a standalone entity amid competition from Duke Health and UNC Health. “The expectation is that increased scale, care coordination, and operating efficiency will help support access and help constrain the total cost of care. We are committed to providing value to the patients we serve,” Kelly added.
Aside from Wake County’s decision, the merger must pass scrutiny from the Federal Trade Commission and U.S. Department of Justice to assess its impact on competition. N.C. Attorney General Jeff Jackson is also reviewing the merger.
Future Health Plan Adjustments
Friedman announced that the Health Plan plans to propose premium increases at its July meeting. The expected hikes are less severe than this year’s adjustments, with a 1% salary increase for standard plan members and a 2% increase for plus plan members. He confirmed that WakeMed will remain in-network under the plan’s new tiered benefit structure.
“We are not taking WakeMed out of network. Members, next year, will have the same benefit at WakeMed as they do today. It might be a little cheaper in a couple areas,” Friedman mentioned post-forum.
WakeMed is anticipated to be part of the Health Plan’s Access tier, offering members benefits at current prices. “We need access. We need to make sure that people in the Wake County area have a place to deliver babies. That’s a big deal. They are one of the largest in the country at delivering babies,” Friedman stressed.
