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.

North Carolina treasurer asks UNC Health Care for $1B bond to ensure cost savings from pending merger

https://www.beckershospitalreview.com/finance/north-carolina-treasurer-asks-unc-health-care-for-1b-bond-to-ensure-cost-savings-from-pending-merger.html

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North Carolina Treasurer Dale Folwell is calling for Chapel Hill, N.C.-based UNC Health Care to issue a $1 billion performance bond to guarantee cost savings from the health system’s pending merger with Charlotte, N.C.-based Atrium Health, according to The News & Observer.

UNC Health Care and Atrium Health, previously named Carolinas HealthCare, signed a letter of intent to merge in August 2017, but the systems have released few details about the proposed deal.

“With a lack of details on this merger and little evidence that mergers like this have generated savings for the public, I feel I have a fiduciary responsibility to pursue this guarantee that will protect North Carolina taxpayers,” Mr. Folwell said in a statement to The News & Observer.

UNC said it will work with the state treasurer to develop ways to meet state employees’ healthcare needs at the lowest cost. However, cutting costs is not the system’s top priority. “Our No. 1 job is taking care of patients. We do not control inflation or other variables associated with the cost of care,” UNC said in a statement to The News & Observer.