Wake Forest Baptist to take over High Point Regional from UNC Health Care
Wake Forest Baptist Medical Center said Thursday it has signed a binding agreement to acquire High Point Regional Health System with a closing date targeted for early fall.
Wake Forest Baptist is taking over the system from UNC Health Care of Chapel Hill.
UNC Health Care recently purchased Morehead Memorial Hospital in Eden.
The systems announced Oct. 25 that Wake Forest Baptist had signed a letter of intent for High Point Regional, marking the Winston-Salem system’s first major entrance into the Guilford County health care marketplace. At that time, the plan was to close the transaction this summer.
The systems underwent about 4½ months of due diligence before reaching the agreement, which allows the integration process to begin in earnest.
The systems said the agreement is aimed at “enhancing coordination of care for the many patients served” by both Triad hospitals “and to help Triad patients receive care close to home.”
“This next phase brings together our teams to determine mutual areas of strength and opportunity for growth,” Dr. Julie Ann Freischlag, chief executive of Wake Forest Baptist and dean of Wake Forest School of Medicine, said in a statement.
“The energy, collaboration and dedication the teams bring to this very important work are amazing.”
Their statement did not disclose a potential capital investment by Wake Forest Baptist into High Point Regional, an element Wake Forest Baptist committed to as part of taking over hospitals in Davidson, Davie and Wilkes counties.
Ernie Bovio, president and chief executive of High Point Regional, has said the systems have not progressed in their talks to discussing potential impacts on their work forces.
Wake Forest Baptist has 14,600 employees and 1,159 hospital beds systemwide; High Point Regional has 2,500 employees and 351 beds.
“The intent is to create clinical jobs in High Point through adding services here,” Bovio said.
Terry Williams, Wake Forest Baptist’s chief strategy officer, said that “while we don’t have all plans together yet, High Point Regional has the capacity to grow and Wake Forest Baptist needs capacity.”
“We believe the merger will be positive for jobs at High Point Regional.”
Williams said there should be limited impact on administrative and other internal jobs with the two systems given “High Point Regional is going from one large system in North Carolina to another.”
Williams said the system conversion should be relatively smooth given both use a variation of Epic for electronic health records.
Williams said “discussions are progressing” about ways to “help High Point Regional grow and aid its community foundation.”
Dr. William Roper, chief executive of UNC Health Care, said “we believe High Point Regional’s new affiliation with Wake Forest Baptist will serve patients well, and we look forward to collaboration opportunities.”
The announcement also comes six days after UNC Health Care and Atrium Health, formerly known as Carolinas Healthcare, formally acknowledged the end of their merger attempt.
David Meyer, senior partner with Keystone Planning Group of Durham, said in October the Wake Forest Baptist-High Point Regional transition “perhaps is influenced” by the Atrium-UNC Health Care combination, which also includes Carolinas’ management contract with Cone Health of Greensboro.
“Divesting in High Point could be a mechanism for obtaining Federal Trade Commission approval for UNC/CHS combination,” Meyer said.
Williams said that while there was a possibility that UNC Health Care could have chosen to retain High Point Regional following the collapse of the Atrium merger, “the continuity and core logic of our deal were still intact and carried the day.”
In May 2016, Wake Forest Baptist acquired Cornerstone Health Care of H
igh Point, a multidisciplinary practice with a presence in 12 counties.
High Point Regional, like Cornerstone, is expected to operate as a wholly owned separate business unit in its affiliation with Wake Forest Baptist.
High Point Regional joined UNC Health Care in early 2013, with both systems saying the realities of the increasing cost of providing health care made the merger economically sensible.
At that time, High Point Regional officials spent seven months pursuing proposals from health care systems in the state. Wake Forest Baptist confirmed at that time it did not submit a proposal.
UNC Health Care provided $150 million for capital improvements to High Point Regional and $50 million for the establishment of a community health fund.
Bovio stressed that UNC Health Care fulfilled its financial and health care services commitment to High Point Regional, in particular helping it gain financial stability following the ending of the Great Recession, as well as offering the cost-saving benefits of being part of a larger system.
The High Point system serves more than 300,000 individuals annually. That total in
cludes the system’s presence in Kernersville — a market shared by the Triad’s four hospitals (Cone Health, High Point Regional, Novant Health Inc. and Wake Forest Baptist).
“There have been plenty of inquiries from employers and patients in High Point, in Guilford County, to gain additional access to more advanced Wake Forest Baptist services, and for those services to be closer to where they are,” Williams said.
N.C. Rep. Donny Lambeth, R-Forsyth, served as president of N.C. Baptist Hospital from 2008 to 2011. Expanding in the Triad was on his plate for consideration, including looking at acquiring High Point Regional.
“The addition of High Point Regional, along with their previous acquisition of Cornerstone, makes this perhaps one of the critical ingredients to Wake Forest Baptist solidifying their system as a serious player in the integration of health care in North Carolina,” Lambeth said.