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Wednesday, May 22, 2024

Cone Health to appeal Atrium’s north Greensboro hospital

Cone Health says it plans to appeal a state regulators’ decision allowing Atrium Health Wake Forest Baptist to build a hospital in north Greensboro.

Earlier this year, Atrium proposed a $246.5 million plan to move 36 beds and two operating rooms from its 307-bed High Point Medical Center hospital to the new Greensboro site, which is in an affluent area, one of the wealthiest communities in Greensboro.

The state approved Atrium’s application on July 26. Atrium “adequately demonstrates the proposal would have a positive impact on cost-effectiveness, quality and access,” analysts Tanya Saporito and Lisa Pittman wrote in their 49-page review.

Cone Health CEO Mary Jo Cagle says the change will boost health care costs, add no new medical services and won’t serve needy people.

“This is a poor decision for everyone needing health care in this area,” she said in a press release. “This community doesn’t need a very expensive facility duplicating most of the same services offered by a Cone Health facility just two miles away.”

Atrium is pleased with the decision and “eager to move forward,” but had no other comment, spokesman Joe McCloskey says.

Greensboro-based Cone Health is the dominant hospital system in Guilford County, while Atrium has a big market share in adjoining Forysth County after acquiring the Wake Forest Baptist Health System in Winston-Salem. Both are not-for-profit institutions. Atrium’s parent company Advocate Health has annual revenue of about $27 billion, while Cone Health had about $2.5 billion in revenue last year.

North Carolina requires regulatory review of new hospital expansions through the certificate of need process. The goal is to avoid duplication and overspending, though critics say the regulations inhibit competition and innovation.

The average medium income in the area around Atrium’s proposed new site is 1.6 times more than the area around High Point Medical Center, according to Cone Health. It also contends the north Guilford location will lead to more referrals to the flagship Atrium hospital in Winston-Salem, where costs tend to be higher because it is an academic medical center.

Cagle told a Triad group yesterday that Atrium Wake Forest Baptist’s acute-care costs in Winston-Salem are 10% to 40% higher than Cone’s, Triad Business Journal reported.

Cone Health is expanding, also. It is adding a heart and vascular tower at its Moses Cone Hospital near downtown Greensboro, making an addition at Alamance Regional Medical Center and plans to open a cancer center in Asheboro next year.

Atrium estimates the Greensboro Medical Center will have gross revenue of $147 million and an operating loss of $16 million in its first year of operation, slated to be the 2027 fiscal year.

 

 

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at dmildenberg@businessnc.com.

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