Carolinas HealthCare System And UNC Health Care Plan To Merge Operations

Aug 31, 2017

Carolinas HealthCare System and UNC Health Care want to join forces to create a network of hospitals and clinics that would span the state. The organizations announced they are in negotiations to create a joint operating company. 

Carolinas Medical Center Main Complex, Charlotte.
Credit Google Street View

If the deal goes through, the health care systems would operate more than 50 hospitals across the state.  The CEO’s of the two organizations say a combined network would expand health care in rural areas and provide more access mental health providers. The head of Carolinas HealthCare System Gene Woods says they would also combine medical education and research resources.

“Together, we believe we can drive research opportunities that advance new discoveries in innovation to find cures and really fundamentally change the way care is delivered.”

Woods and William Roper CEO of UNC Health Care System say a joint company would give them more leverage in the health care market to negotiate thinks like pharmaceutical and medical device prices. The two CEO's point out they don’t have many facilities in the same market. That’s a factor the Federal Trade Commission will weigh when considering the deals approval.

Leemore Dafny, an economist with Harvard University, says historically hospital mergers have increased prices for consumers.

“They increase prices without measurable improvement in the quality of the care they are providing. There is very limited evidence for cost savings as well. In terms of benefits to your pocketbook that is not typically found.”

The health care systems hope to have a final agreement by the end of the year and start the new joint entity in 2018 pending regulatory approval.

Carolinas HealthCare System employees learned of the merger with this email from CEO Gene Woods: 

August 31, 2017

Teammates,

Today, I am incredibly proud and excited to share that our Destination 2020 strategy is already beginning to take shape and we are starting a new chapter in the Carolinas HealthCare System history book. 

Within the hour, we will publicly announce that we have signed a Letter of Intent with UNC Health Care to join our clinical, medical education and research resources to create one of the most exceptional and comprehensive academic community healthcare systems in the nation.

Why? First and foremost, this partnership is about extending our mission to improve health, elevate hope and advance healing to millions more in North Carolina. We will bring a new level of expertise and capabilities to the citizens and communities of this great state, accomplishing far more together than what either of us ever could alone.

Through our new organization, we have the opportunity to be a national model for how to positively impact many of our state’s most pressing issues and to bring North Carolinians even closer to the world-class care they deserve. For example:

  • Rural Care: Since our organizations already serve almost 50 percent of all patients who visit rural hospitals in our state, we are perfectly positioned to participate in the reinvention of rural healthcare in partnership with others. Ensuring there is great healthcare in rural counties is not only important to physical well-being, but is also vital to the economic well-being of those communities as well.
  • Medicaid: As we continue to expand our Medicaid model, our combined organization will serve one out of three Medicaid patients in North Carolina, making us the best equipped to tackle this significant issue within our state.
  • Behavioral Health: 44 counties in North Carolina have been designated with a shortage of mental health professionals. Collectively, we can address this shortage in 29 counties, or among 65 percent of the area with an identified need.
  • Cancer: At Levine Cancer Institute, we care for more than 10,000 new patients every year, and over 1,000 participate in clinical trials through a ‘care-close-to-home’ model in over 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.
  • Pediatrics: CHS is nationally-ranked in six pediatric clinical service lines. UNC Health Care is nationally-ranked in seven pediatric clinical service lines. Together, we look forward to being one of the most recognized systems in the country for pediatric care.

 

An exciting part of this opportunity is how complementary our cultures are to one another. CHS and UNC Health Care come from the same humble beginnings as single "memorial hospitals," we share common roots as public, not-for-profit institutions and we maintain the same level of commitment to the patients and the communities we serve. While we have grown separately into nationally-renowned healthcare systems, we will come together now to advance better care and better health outcomes for the citizens of North Carolina and beyond.

There is still much work to be done over the next several months as we solidify the specifics of our new organization. Later today, I invite you to join me and other CHS leaders for a town hall to share more information about this exciting announcement. This event will be streamed at 4 p.m. today, and will also be available to view later if you are unable to join during this time.

I look forward to sharing more details with you as our work of joining together progresses.

Thank you for all you do,