Atrium Health and UNC Health Care announced on Friday that negations between the two healthcare systems have been suspended, but the proposed merger raised questions of state official oversight when it comes to the state-owned healthcare system.
Questions remain as to why the merger fell through, though the planned merger, announced in a letter of intent in August, has drawn sharp criticism from many about the possible increase in medical costs from the formation of what would have been a healthcare juggernaut including more than 90,000 employees and more than 50 hospitals, as well as encompassing more than $14 billion in assets.
The proposed merger was called off in a letter from Atrium CEO Gene Woods and the chairman of Atrium’s Board of Commissioners, Ed Brown, to UNC Health Care’s leadership on Friday.
Issuing its own press release, UNC Health Care CEO William Roper and Board Chairman Dale Jenkins said UNC Health Care and Atrium both agreed that the best path forward is to identify specific opportunities to collaborate rather than form a joint operating company.
Though the deal is dead the question brought forth by the intention for the two to merge is what role does the Council of State have in deals of this nature.
In the wake of the news State Treasurer Dale Folwell called for all deals involving state property to come before the Council of State for review.
The Council of state is comprised of nine elected leaders in the state, including the lieutenant governor, secretary of state, attorney general, commissioner of agriculture, commissioner of insurance, commissioner of labor, superintendent of public instruction, state treasurer and the state auditor.
“This proposal involved one of the state’s most valued assets worth billions of dollars,” Folwell said. “And yet it was never discussed by the Council of State nor do I think it was ever expected to come before us. I look to all members of the Council of State and the legislature to help clarify the role, if any, we currently have in deals like the UNC Health and Atrium merger. However, not having clear authority shouldn’t prevent us from asking tough questions about transactions that have the potential of affecting North Carolina taxpayers.”
Folwell said that generally the council has a statutory requirement to approve all state property transactions, but the now-cancelled merger never came before the council.
North Carolina Attorney General Josh Stein was also suspect of the merger, requesting more information from the executives from each organization before the merger fell through.
Stein shared Folwell’s concern that the merger would be a burden on the public more so than a benefit.
Folwell, in February, called on UNC Healthcare to provide the State Health Plan, which is under the purview of the office of the State Treasurer, with a $1 billion performance bond guaranteeing that the claims of decreased healthcare costs for consumers coming from the merger would be realized.
UNC Health Care declined.
Folwell wanted the bond as a protection for taxpayers against a possible increase in costs to the plan, which would be born by the taxpayers.
With merger talks suspended the question going forward is what role do the state’s top elected officials have in major matters of state property.