Academic Medicine Mergers and Consolidation Trends

Mergers Continue and This One Is Big: UNC Health Care & Carolinas HealthCare System

For nearly 12 years (1995 – 2007), my colleagues and I worked to help build the UNC Health Care brand. In fact, my relationship with that organization goes back farther than that. While I was in college, I got my first experience in healthcare as an intern in the nurse recruitment office at UNC Hospitals – long before the UNC Health Care brand was conceived. I believe it was still called North Carolina Memorial Hospital when I worked there. While attending the University of North Carolina, I worked nights as a nursing assistant on a cardiology floor in one of the bed towers. That was an intense job for an immature college student.

It goes without saying that I have a long history with UNC Health Care and an affinity for the brand, even though they are no longer a client. Yesterday, I read with interest the many articles (and shared them on Twitter) announcing UNC Health Care’s new partnership with Carolinas HealthCare System (another former client). This is a huge “joint venture.” The new entity will include more than 50 hospitals with more than 90,000 employees, making it one of the nation’s largest healthcare systems.

One of the hot topics being debated in the media is whether or not the new partnership will help to reduce healthcare costs within the region – North and South Carolina. In my experience, the monster healthcare systems (think Partners Healthcare in Massachusetts) have more negotiating power with health insurance companies, and therefore are able to charge higher rates than their competitors. I don’t think there’s any confusion around that point. Of course, there are other ways to reduce overall costs of healthcare, particularly by addressing population and community health. Addressing health and wellness outside the hospital walls is a far more cost effective solution. Think: social determinants of health. Hopefully, a mega system like the one that is being created in the Carolinas will have the resources and know-how to address population and community health in a meaningful way.

To help explain the new affiliation, the two partners set up a small microsite that provides details about the relationship:  Feel free to check it out. Here’s an excerpt from press release that went out yesterday:

“Together, Carolinas HealthCare System and UNC Health Care will provide clear solutions for healthcare’s most pressing challenges by focusing on four strategic areas: increasing access and affordability, advancing clinical care expertise, growing their renowned academic enterprise and contributing to the region’s economic vibrancy.

“Together with UNC Health Care, we believe that the opportunities to be a national model and to elevate health in North Carolina are nearly limitless,” said Gene Woods, current president and CEO of Carolinas HealthCare System, and future CEO of the new entity. “For example, 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 our patients’ physical wellbeing, but is also vital to the economic wellbeing of those communities as well. At the same time, we are also inspired by what our two organizations will be able to do together to transform cancer treatment. At Levine Cancer Institute, we care for over 10,000 new patients every year, and over 1,000 participate in clinical trials through a ‘care-close-to-home’ model in more than 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. In short, this partnership is an example of one of those truly ‘big ideas’ that this state is known for.”

Carolinas HealthCare System and UNC Health Care will improve access to care in underserved and rural geographies, jointly addressing behavioral health needs, designing new models of care and further developing virtual care platforms. The joint organization also will work to expand medical education, serving as the platform for training future healthcare providers. The new organization also will further the development of clinical care destination centers and centers of excellence as well as differentiated care in pediatrics, cancer, transplant services, among others.”

If you’d like to learn more about the joint venture, check out these articles:

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