UNC Health Care Merger Talks Break Down

After months and secretive, and at times frustrating, negotiations, UNC Health Care will not be merging with another hospital system.

UNC Health Care and Atrium Health – formerly known as Carolinas HealthCare System, based in Charlotte – have been discussing a new partnership that would have formed one of the largest hospital systems in the country.

The plans for that new venture were announced last August. But they came to an end on Friday when the two systems announced they would not be moving forward.

It appears the negotiations were at a standstill over who would have the ultimate control of the operations.

The potential merger had drawn attention from the UNC System Board of Governors, which formed a special committee to review any potential deal, the North Carolina treasurer and the state attorney general’s office.

Members of that BOG special committee had expressed frustration over the secretive nature of the negotiations and the lack of information they had received about the partnership. Those frustrations were expressed when North Carolina Treasurer Dale Folwell spoke to the board earlier this year. Folwell was hesitant about whether the merger would actually lower health care costs for North Carolinians, and Folwell had requested that UNC Health Care take out a $1 billion performance bond guaranteeing that cost reduction.

Folwell said on Friday, “We never acquired enough information to ensure that the combination of these two health care entities would not have a negative impact on the taxpayers of North Carolina.”

Any potential deal would also have had to receive approval from Attorney General Josh Stein, who had requested additional information about the negotiations.

Stein said in a statement issued Friday afternoon that health care system mergers “often don’t benefit patients and businesses.”

When announcing the end of negotiations, UNC Health Care said that the systems “cannot satisfy our mutual organizational goals through a proposed partnership and joint operating company.”

While they will not be forming a new company, the two systems are expected to continue to look for areas to collaborate. UNC Health Care cited rural health care and expanding medical education as possibilities.

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