Wake Forest Baptist Medical Center has signed a letter-of-intent agreement to acquire High Point Regional Health System and affiliates from UNC Health Care of Chapel Hill.
The systems announced Wednesday that Wake Forest Baptist expects to complete taking ownership of High Point Regional by next summer. The goal is to begin the integration process in January.
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.”
No financial disclosures or commitments were announced by the hospitals, although Terry Williams, Wake Forest Baptist’s chief strategy officer, said “discussions are progressing” about ways to “help High Point Regional grow and aid its community foundation.”
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UNC Health Care’s decision to hand off High Point Regional comes nearly two months after UNC announced Aug. 31 it would form one of the nation’s largest health care systems with Carolinas HealthCare System of Charlotte. The two hospital systems plan to create a joint operating company that would allow them to work together in myriad ways, from building new hospitals to negotiating with insurance companies.
David Meyer, senior partner with Keystone Planning Group of Durham. said the transition “perhaps is influenced” by the Carolinas-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.
High Point Regional becomes the fourth community hospital to be affiliated with Wake Forest Baptist, along with Davie, Lexington and Wilkes medical centers.
The acquisition gives Wake Forest Baptist a more prominent presence in Guilford County. In May 2016, Wake Forest Baptist acquired Cornerstone Health Care of High 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.
“Wake Forest Baptist and High Point Regional Health have a long history of working together to provide high quality care to patients in our Triad communities,” Dr. Julie Ann Freischlag, chief executive of Wake Forest Baptist, said in a statement.
“We are very glad to unite with our neighbors and colleagues at High Point Regional Health to bring our collaboration — to improve the health of all in the Triad — to the next level.”
Ernie Bovio, president and chief executive of High Point Regional, 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.
Bovio called the ownership change “an important step for the long-term growth and future of High Point Regional.”
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 particularly 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.
In recent months, however, as Wake Forest Baptist and High Point Regional collaborated successfully on small projects, Bovio said it began to make sense for the hospitals to consider a larger relationship.
“There is a difference in terms of geography and proximity between High Point and Winston-Salem, and High Point and Chapel Hill,” Bovio said.
Dr. Bill Roper, chief executive of UNC Health Care, said “we have been proud to have High Point Regional as an integral part of the UNC Health Care System.”
“After careful consideration, we found this opportunity to bring High Point Regional and Wake Forest Baptist Medical Center together to be in the very best interest of the communities they serve.”
Roper will chair the board that will oversee the combined Carolinas-UNC Health Care system.
Bovio said High Point Regional’s referral patterns “never really changed with High Point Regional being part of UNC Health Care just for the sake of the partnership.”
“Together, we can have a stronger overall presence being part of the Big 3 hospitals in Triad, rather than being a viable and relevant, but still smaller No. 4,” Bovio said.
The High Point system serves more than 300,000 individuals annually. That total includes 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).
The future High Point Regional board will include representatives from the High Point community, Wake Forest Baptist and UNC Health Care during the transitional period.