NC hospital system tries another megamerger

https://www.axios.com/newsletters/axios-vitals-f500be38-f71e-4984-955b-efc69e20a435.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

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Atrium Health struck out a year ago when it attempted to merge with in-state rival UNC Health Care, Bob reports. Now, the hospital system has inked a new deal to combine with Wake Forest Baptist Health, which is 90 minutes away from its headquarters.

Why it matters: Research overwhelmingly shows these kinds of regional hospital mergers lead to higher health care prices (and, consequently, premiums) because providers gain negotiating leverage and make it harder for health insurers to exclude them from networks.

Between the lines: The primary hook that Atrium and Wake Forest are selling is that they would build a new medical school in Charlotte. Because who could be against more doctors and research?

  • The organizations didn’t mention how, or if, they would try to keep costs and prices down.
  • The combined system would have almost $10 billion of revenue, which is roughly the size of Boston Scientific.

 

Doctors Leaving Atrium Buck The National Trend Of Groups Joining Hospitals

http://www.wfae.org/post/doctors-leaving-atrium-buck-national-trend-groups-joining-hospitals#stream/0

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Hospital systems have been on a buying binge the last few years, gobbling up doctors’ practices. By one estimate, nearly a third of medical practices nationwide are now part of a large hospital network.

But one large group of physicians is going in another direction – it’s breaking away from Atrium Health and opening an independent practice next month.
A whiteboard at the temporary Tryon Medical Partners office counts down the number of days till the practice opens. It’s made up of 88 primary care and specialty doctors who are leaving Atrium Health, formerly Carolinas HealthCare System. One of them is Dr. Dale Owen.

“Just because everybody else may be selling that doesn’t mean that we are not at the peak and it’s going to start the other direction,” he said. “Because I really think that’s what’s happening. Because we cannot keep doing the same thing. We can’t just keep buying up groups and then doctors not have any say and then expect a different outcome from the very same process each time.”

Owen is a cardiologist and CEO of the practice, called Tryon Medical Partners. The mood is different now than it was five months ago. Owen and the rest of the doctors sued Atrium so they could leave and start this practice. The hospital relented.

The doctors’ lawsuit said Atrium was making changes like cutting the number of registered nurses assisting doctors, and moving nurses from individual doctors’ offices and to a central a call center.

In preparation for the opening next month, rows of nurses are in a South Park office building taking calls from patients.

They answer questions from patients and schedule appointments. The practice will stagger the opening of eight locations in the Charlotte metro area throughout the next several months, roughly mirroring the locations of the Atrium affiliated Mecklenburg Medical Group’s offices.

What the doctors are doing is unusual. The national trend for the past several years has been practices joining hospital systems. As of 2016, about a third of doctors’ practices were owned by a hospital – a more than 100 percent increase in just four years, according to a study for the Physicians Advocacy Institute and Avalere Health. Hospitals bought 5,000 practices between July 2015 and 2016 alone.

Lisa Bielamowicz is a doctor and president of Gist Healthcare, a Washington D.C. based consulting company. She said hospitals are buying up these practices to grow their networks and keep patients in the system. Physicians sought stability and help with increasing administrative tasks due to increasing regulatory changes.

“So far there hasn’t been a ton of flux away from employment relationships. If you have health system employ hundreds of physicians, of course, there is going to be a handful chose to leave for a variety of reasons,” she said. “But it’s very rare that a group of dozens or more of physicians will leave en masse from a health system. Now that said given where the market is going and all of the change that’s occurring now it’s something that we would expect to see more of down the road.”

Because, Bielamowicz said, some doctors have found being an employee of a large health system isn’t all it’s cracked up to be.

“Most doctors are trained to be independent thinkers and don’t think of themselves as being employees of any organization even if someone is giving them a paycheck and a W2 every year,” she said. “The idea of a parent or employer organization putting limits around how they operate their office or how they would practice, the types of care that they deliver is something very difficult for a lot of physicians to adjust to.”

A few doctors from the original practice decided to stay with Atrium. The health system has said it’s hired nearly 50 providers who have already started or will start by October. As the opening date nears, Owen said his adrenaline is high and he’s excited to practice on his own terms.

“There have been lots of people who said it was going to be too hard to be independent and you can imagine that the hospitals might think that and other independent organizations because they were already independent. Plus, when you are the first do it at this kind of scale and on the backs of primary care. Everybody is going to be watching it.”

Owen and the doctors will start seeing patients the first week in September.

 

 

Atrium, UNC Health put merger plan on ice

https://www.healthcaredive.com/news/atrium-unc-health-put-merger-plan-on-ice/518311/

Dive Brief:

  • Atrium Health, formerly known as Carolinas HealthCare System, announced Friday that its planned merger with UNC Health has been suspended because of disagreements between the two systems on which would control the combined company, The Charlotte Observer first reported. The now-stalled deal would have created a system with more than 50 hospitals and 100,000 employees.
  • The lapse in negotiations comes less than a month after Atrium signed a letter of intent to partner with Navicent Health.
  • Although consolidation among hospital systems has ramped up over the past year, the failure of the two groups to come to terms shows it’s not always a smooth path.

Dive Insight:

The merger plan was announced in September, but the deal now appears to be going nowhere.

“In our letter sent to UNC Health Care today, we informed them that while we have not been able to reach an agreement, our respect for UNC Health Care, its team and UNC Health Care’s accomplishments has grown through this process,” said an Atrium Health statement also obtained by Healthcare Dive.

Merger mania is still clearly evident in the industry, however.

Advocate Health Care and Aurora Health Care recently moved closer to merging to form the 10th largest nonprofit healthcare system in the U.S. after receiving regulatory approval from both the Federal Trade Commission and Illinois.

Meanwhile, Ascension and Presence Health recently signed a definitive agreement to combine, and Ascension is reportedly in talks to also buy Providence St. Joseph Health. Catholic Health Initiatives and Dignity Health are also working to merge into a new health system, which would have 139 hospitals operating in 28 states.

The mergers are evidence that health systems continue to search for ways to capture economies of scale and cut costs as hospitals face lower reimbursements and patient volumes. But despite the trend, combining massive health systems can be difficult with regulatory and other challenges.

 

UNC Health Care, Atrium execs reportedly frustrated by issue of control over merged entity

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/unc-health-care-atrium-execs-reportedly-frustrated-by-issue-of-control-over-merged-entity.html

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Executives at Chapel Hill, N.C.-based UNC Health Care and Charlotte, N.C.-based Atrium Health have reportedly addressed a number of shared concerns regarding their proposed merger. However, the issue of control over the merged organization has yet to be decided — a decision that will have ramifications for both institutions, according to The News & Observer.

William L. Roper, MD, CEO of UNC Health Care and dean of the UNC School of Medicine, provided an update about the organizations’ negotiations Feb. 20 following a closed-door session with a special committee of the UNC System’s board of directors earlier that same day.

“I had a lengthy conversation with our Charlotte friends this morning, and I think we are making some progress in narrowing the differences but we have not yet reached agreement,” Dr. Roper told The News & Observer. “Both sides are interested in the key questions of who’s in charge, how are decisions going to be made, how can we balance the interests so that both sides feel fairly represented in the decision-making process. Those are the big questions and we’re still working on them.”

The decision of who maintains control over the merged entity, which would comprise 60 hospitals and at least 90,000 employees, would have significant effects on UNC’s medical research and the UNC School of Medicine, a state-owned entity belonging to the UNC System.

The organizations entered into negotiations regarding a potential merger last August. At that time, officials selected Atrium Health CEO Gene Woods to serve as CEO and Dr. Roper as chair of the combined system’s board of directors. Dr. Roper said Feb. 20 that following the completion of his term as chairman, Atrium Health’s board chairman would assume the role. After that, UNC Health Care and Atrium Health would alternate appointing leaders to the role.

Dr. Roper’s update comes after multiple organizations, including the state’s largest insurer, Blue Cross Blue Shield of North Carolina, said they could not support the proposed merger. North Carolina Attorney General Josh Stein wrote a letter Feb. 15 to the chief executives of both health systems demanding additional information regarding the proposed deal, stating the systems had not provided enough information about how the transaction would affect healthcare costs for consumers.

Dr. Roper’s announcement Tuesday also reportedly did not satisfy concerns voiced by North Carolina Treasurer Dale Folwell, who last week called on UNC Health Care to issue a $1 billion performance bond to guarantee cost savings from the proposed deal.

Mr. Folwell said Tuesday Dr. Roper’s update did not provide assurance healthcare costs would decrease and that the update underscores the huge stakes involved in the negotiations, according to the report.

Carolinas HealthCare is changing its name — here’s why

https://www.beckershospitalreview.com/hospital-management-administration/carolinas-healthcare-is-changing-its-name-here-s-why.html

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Carolinas HealthCare System, a 40-hospital system based in Charlotte, N.C., has changed it name to Atrium Health.

Officials said the new name reflects the system’s evolution from a single hospital to a health system with a strong regional footprint.

“It’s quite remarkable to think back to our humble beginnings in 1940, when a group of ambitious, young clinicians answered the call to serve everyone and opened our doors as Charlotte Memorial Hospital,” said Atrium Health President and CEO Gene Woods. “Now, nearly 80 years later, our doors remain open, and we’ve helped our community thrive. As we have maintained our mission to serve all, we have also evolved. Our new name reflects our organization today and where we are going in the future to make a greater impact for the people we will serve.”

The health system evaluated more than 100 names and conducted consumer research on a few of them before making a decision. The system said Atrium was selected because of its meaning: a place filled with light; the chamber of the heart where every heartbeat begins; and a gathering ground where diverse thinkers come together and connections are made.

Although the system is changing its name, the organization will keep elements associated with the Carolinas HealthCare System brand, including an updated “Tree of Life” icon.

“Our Tree of Life is strong and our mission to provide care for all will not change,” Mr. Woods said. “Atrium Health will allow the organization to grow and impact as many lives as possible and deliver solutions that will help even more communities thrive.”

The system said full implementation of the new name would take about two years, and changes to signage at hospitals and other care locations will begin at the end of 2018. Advertisements will immediately begin to carry the new name.

The name change comes as Atrium Health is pursuing a merger with Chapel Hill, N.C.-based UNC Health Care. The two systems signed a letter of intent to merge in August 2017. The combined entity would control more than 50 hospitals.