Carolinas-UNC merger under state review

A special committee formed by the University of North Carolina’s board of governors has until Dec. 20 to review the proposed joint venture between the UNC Health Care System and Carolinas HealthCare System.

According to the Charlotte Observer, a special committee formed by the board has the authority to review UNC Health’s consideration of the deal because of the system is owned by the state and is governed as an affiliate of the university system. Its first meeting was held the day before Thanksgiving, with several more meetings planned before it reports its findings to the UNC board.

“We look forward to answering any questions from this committee, welcome their review, and are confident it will conclude that the collaboration between our two organizations is in the best interest of the people of our state as it fosters our common goal of improving the health of North Carolinians,” Carolinas HealthCare said in a statement.

The combination is not without controversy. Carolinas is already the state’s largest health system and has been accused of abusing its market power with restrictions in insurer contracts designed to keep customers away from lower-priced competitors. Additionally, the promises merging hospitals make about cost and quality benefits can take years to materialize, with other stakeholders doubting those savings are ever passed onto patients.

“I’m not aware where two systems combined and costs went down,” Patrick Conway, MD, CEO of Blue Cross and Blue Shield of North Carolina, the state’s largest health insurer, said to the Observer. “Historically the larger systems charge a higher price per unit.”

The combined entity would operate more than 50 hospitals and have a workforce of 90,000 employees, though according to the Raleigh News-Observer, the organizations insist the deal isn’t a “merger,” as the two systems would form a joint operating company overseen by an independent board.

When asked about the timeline for reviewing the deal, special committee member R. Doyle Parrish said “time is of the essence,” while promising the committee’s report and recommendations will be released to the public.

“It’s a changing world,” Parrish said. “What we’re being told from the hospital board is we need to have certain things in our set of how we operate to effectively compete in the new world, and to provide the outcomes that you—the state of North Carolina—and the system is expecting.”