- Blue Cross Blue Shield of North Carolina has come out against a planned merger between Carolinas HealthCare System and UNC Health Care.
- In a letter to the two health systems, Blue Cross and Blue Shield CEO Dr. Patrick Conway said the insurer does not support the deal because it would increase patient costs, but is open to continued dialogue if the systems “can demonstrate how this combination will lower costs and improve quality over the long-term,” according to several news reports.
- In response, UNC Health Care said BCBS has "drawn premature and unfounded conclusions" about the partnership and Carolinas HealthCare noted that while the payer is not supporting the deal, "we are pleased they are also not opposing our plan."
Carolinas HealthCare, the state’s largest health system, and UNC Health, which includes an academic medical center and several affiliate hospitals, signed a letter of intent to merge in September. The combined entity would be one of the largest nonprofit health systems in the country, with more than 50 hospitals and more than 90,000 employees.
While price hikes are a concern when competition is eliminated, both health systems have pledged to take this into account as they work out the details of the agreement. They say the partnership would expand access to health services, particularly in rural areas of the state.
It’s certainly a growing trend. A number of hospitals and health systems are looking at horizontal integration as a way to survive financial pressures like fewer inpatient admissions and lower reimbursements. Last month, Advocate Health Care and Auroral Health announced a merger plan that would create the 10th largest nonprofit system in the country. Days later, Catholic Health Initiatives and Dignity Health finalized a merger more than a year in the making and reports surfaced that hospital operators Ascension and Providence St. Joseph Health were also discussing a deal.
To go through, the North Carolina merger must survive the scrutiny of a number of oversight groups. UNC’s Board of Governors is reviewing the deal, along with the state’s attorney general and possibly the Federal Trade Commission. The major question for all of these groups is whether a merger would drive up costs for patients.
Two health systems last year avoided federal review using a process to bypass the FTC that left the decision up to the two states involved. Virginia and Tennessee approved that merger by agreeing it was in the public interest. That was after the FTC rejected a merger between Advocate Health Care and Northshore University Health System in Illinois.