Atrium's acquisition of WakeMed receives significant pushback

• The deal was announced last Friday afternoon and the Wake County Board of Commissioners were scheduled to vote on it Monday evening.
• But that vote has been delayed for at least 90 days, after commissioners voted to remove it from Monday night's consent agenda.

State of play: Local and state officials have pushed back on the potential deal, saying that the move has been rushed without public comment and transparency, and could create higher prices for residents.

• Officials ranging from state Treasurer Brad Briner, state Auditor Dave Boliek, state Rep. Mike Schietzelt and Raleigh Mayor Janet Cowell have all objected to the speed and scope of the deal.

Driving the news: The county commissioners were set to consider amending WakeMed's articles of incorporation on Monday to allow for Atrium and WakeMed to begin the regulatory process of merging.

• Wake County does not have the legal authority to approve the merger, but the delay will give the public more time to engage on a potential merger.
• "While the joining of these hospitals may be positive for Wake County, we want to be fully open and transparent about the process, and that includes allowing ample time for public feedback," Don Mial, chair of the Wake County Board of Commissioners, said in statement.

Zoom in: WakeMed has served Wake County since 1961 and was originally built with tax payer money. The county owned the hospital network until 1997 when it became a nonprofit.

• It is a significant health care provider in the Triangle with three hospitals and several outpatient facilities. WakeMed offers a significant amount of charity care and is an important player in mental health services.
• The deal between Atrium does not include a purchase price, but instead a commitment to invest $2 billion into WakeMed.
• Cowell, a former state treasurer, said she did not believe that was a fair price for WakeMed, especially considering similar community-founded hospitals in Buncombe and New Hanover counties were acquired for much more.
• Those sales also created trusts that invest in the health of Buncombe County and New Hanover County.

What they're saying: "Why does Buncombe get $1.5 billion and New Hanover get a billion-plus when their hospitals changed hands?" Cowell said. "What is it that makes this situation so different, after all of these decades of local investment into this institution, that Wake County gets nada?"

• "I think people think of me as a fairly calm, level-headed person, and this just makes me really angry," Cowell said.

• Atrium and WakeMed have not responded to a request for comment, but the two are expected to hold a press briefing Tuesday.

State of play: Briner agreed that he does not believe this was a fair price to acquire WakeMed.

• But his concern, as the steward of the State Health Plan, is that the merger would lead to higher prices for patients, especially since Atrium has much more bargaining power with insurers.
• Studies have shown that hospital mergers raise health care costs. But at the same time, hospital networks are facing financial pressures to expand their footprints.

What they're saying: "The State Health Plan is a major purchaser of WakeMed services. I don't think we've publicly said exactly how much that is, but you'd be right to guess it's a nine-digit number," Briner told Axios. "And if you assume, as you see in all the academic research, that prices go up 10%, that's an eight-digit number that we simply can't afford."

• Briner said he thinks it's important to maintain the competitive mix that exists in the Triangle between Duke Health, UNC Health and WakeMed.
• "We probably will have three providers [here] until we change something about certificate of need [laws]," Briner said. "And I think it's really important that we keep those three who they are, and not allow the kind of cross-jurisdictional leverage that would apply in Atrium's case."