Carolinas HealthCare, UNC Health Care reveal intent to merge

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Health systems say they are entering negotiations to combine clinical, medical education and research units.

rolinas HealthCare System and UNC Health Care announced on Thursday that they are negotiating a merger that would transform them into a health system earning an estimated $14 billion in annual revenue.

Both organizations have signed a letter of intent to join their clinical, medical education and research resources and the letter kicks off a period of exclusive negotiations, with the goal of entering into final agreements by year’s end.

Together, the health systems would be focused on four strategic areas: increasing access and affordability, advancing clinical care expertise, growing their renowned academic enterprise and contributing to the region’s economic vibrancy.

“The opportunities to be a national model and to elevate health in North Carolina are nearly limitless,” Carolinas CEO Gene Woods said in a statement.

Woods would serve as chief executive officer of the new entity and UNC Health CEO William Roper, MD, would take on the role of executive director.

Woods noted that since the two organizations already serve almost 50 percent of all patients who visit rural hospitals in the state, they are well positioned to participate in the reinvention of rural healthcare and to transform cancer treatment.

Levine Cancer Institute, which is part of Carolinas, cares for more than 10,000 new patients a year, and more than a thousand participate in clinical trials through a ‘care-close-to-home’ model at some 25 locations throughout the Carolinas.

“Combined with UNC Health Care’s National Cancer Institute designation, with more than $70 million in joint cancer research grants for clinical trials, we will create a cancer network that is second to none in the country,” Woods said.

Roper added that merging would enable the combined organization to provide a wider range of care services, build clinical destination centers, advance care in pediatrics, transplants and other services and expand their medical education offerings.

Executives of the two health systems also said the partnership would give them the leverage to negotiate better deals with insurance companies and vendors, potentially saving millions of dollars.

The plans for consolidation would be submitted to the Federal Trade Commission for ruling on whether the size of the new entity might inflate the cost of healthcare in the state or limit the choice of doctors and hospitals.

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