Two of the largest health systems in North Carolina, UNC Health Care and Carolinas HealthCare System, have signed a letter of intent to merge into one of the nation’s largest nonprofit providers.
The merger will allow both systems to negotiate better deals with payers, saving both millions of dollars, and increase access in rural areas, the organizations announced. Carolinas and UNC intend to form a joint operating company that would offer a network of primary, specialty and urgent care.
"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, CEO of Carolinas HealthCare System and who will become CEO of the new entity, in the announcement. “In short, this partnership is an example of one of those truly ‘big ideas’ that this state is known for.”
The goal is to complete negotiations and officially operate as a joint entity by the end of the year, according to the announcement. The UNC Medical School will also be integrated into the joint venture, broadening the reach of UNC's medical education in the state as well.
Other goals for the partnership include:
- Increased collaboration with regional providers
- Be the “cornerstone” of the state’s Medicaid program
- Offer more than 1,400 active clinical trials
- Drive further research into new treatments and cures
“Merger-mania” has been ongoing in the healthcare industry. A Kaufman Hall analysis found that M&A activity had increased by 15% in the second quarter of 2017 compared to the second quarter of 2016.
The first half of 2017 included a number of big-ticket transactions, with six mergers featuring healthcare organizations in the $1 billion range, including the blockbuster merger between Steward Health Care and IASIS Healthcare LLC, which in May produced the single largest private for-profit hospital operation in the country.
Other big-name health systems have made moves, too; Partners HealthCare System, for example, announced plans to acquire Care New England Health System, the second-largest system in Rhode Island, and Ascension Health, the nation’s largest Catholic health system, revealed its intent to purchase Presence Health, the largest Catholic system in Illinois.