By Taft Wireback
The North Carolina Department of Justice has given the public an additional two weeks to comment on the proposed merger of Greensboro-based Cone Health and Virginia-based Sentara Healthcare, hoping to hear from a wider range of community voices.
The planned merger would create a 17-hospital nonprofit system headquartered in Norfolk, Virginia, generating about $11.5 billion in annual receipts and with North Carolina facilities in the Triad and Pasquotank County, where Sentara already provides services.
N.C. Attorney General Josh Stein initially sought public comment on the proposed merger late last month with a deadline of April 14.
But state DOJ spokeswoman Laura Brewer said this week that the window will remain open through Wednesday, April 28.
Comments can be submitted by email to email@example.com with the subject line “Cone” and/or “Sentara.”
“We are extending the deadline for comments to make sure we hear from as many community voices as possible,” Brewer said. “The next step is that our office is reviewing the transaction.”
Cone and Sentara announced plans to merge in August 2020 with an unspecified target date of “mid-2021.” They need to pass varying levels of scrutiny by the Federal Trade Commission, the Virginia Department of Health and Stein’s office.
Virginia has a law requiring such hospital mergers to undergo a review that, under certain conditions, could include a “certificate of public advantage” overseen by state officials. When North Carolina repealed its “certificate of public advantage” regulation in 2015, the law gave the attorney general’s office the power of review to examine transactions in which charitable corporations such as Cone Health sell a majority of their assets. But that power is limited.
The FTC generally frowns on health system mergers that reduce competition and can result in higher costs for consumers. But the lack of geographic overlap between the Cone and Sentara networks should make FTC opposition less likely.
Time for more comments
Formal approval from Stein’s office is not required for the merger to move forward. But he could file a lawsuit to stop the proposed merger if he and other Department of Justice officials determine it would harm consumers.
“There’s no set time for how long the review will take,” Brewer said of Stein’s decision-making process.
She said earlier this week that the department so far had received a total of 33 comments about the merger from 32 people. Before releasing those comments to the public, her staff is reviewing them to redact privileged or other non-public information, said Brewer.
When the planned merger was announced last summer, it envisioned Sentara CEO Howard Kern taking the reins as chief executive of the newly combined organization with the overall corporation’s headquarters in Norfolk. Greensboro would be a regional hub of the newly formed organization with current Cone CEO Terry Akin remaining in place to oversee that sector.
Since then, Akin and former Cone Health chief financial officer Jeff Jones decided to leave, both saying that their decisions were personal and not triggered by any dissatisfaction with the proposed merger.
Akin said he would remain until the merger was complete. Cone’s current chief operating officer, Mary Jo Cagle, has been tapped to succeed Akin and become both the first woman and the first physician to lead the organization.