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WakeMed offers to buy rival Rex for $750M

Posted May 12, 2011
Updated May 17, 2011

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— One of Wake County's largest health care providers, WakeMed Health & Hospitals, has offered to buy its cross-town rival, Rex Healthcare in Raleigh, for $750 million.

Wake Med Chief Executive Dr. Bill Atkinson made the announcement Thursday morning at a news conference, saying the health care system submitted a formal offer to Tom Ross, president of the University of North Carolina system, which has run Rex since it merged with UNC Health Care in 2000.

Atkinson said a merger would offer significant benefits to patients, doctors, taxpayers, the community and North Carolina, which is struggling to close a $2.4 billion gap in the state budget.

"We think that Rex is a part of government, so it is a viable idea to consider, even if this is something we're not eventually approved," Atkinson said. "To dismiss the idea of consideration, we think, is a mistake for anyone at this point."

Dale Jenkins, chairman of Rex's Board of Trustees, said the offer "came out of the blue" and that he views it as "hostile."

"Rex is not for sale and has not been for sale," said Jenkins, who was still reviewing details of the offer Thursday morning.

Ross, in a statement late Thursday afternoon, said the offer letter had few specifics and left many unanswered questions but that it would be carefully considered at a Board of Directors meeting next week.

"I do not believe that divesting UNC Health Care of Rex in order to generate one-time revenue for the state is in the long-term best interests of the people of North Carolina," he said. "It would damage our ability to fully carry out our (health care) mission."

"Given its fiduciary responsibility to the people of North Carolina, the UNC Health Care board will consider the offer carefully and conduct extensive due diligence," he added.

Rex Healthcare flag WakeMed offers to buy rival Rex for $750M

Rex spokeswoman Melody Hunter-Pillion said Rex is self-sustaining and doesn’t receive any money from UNC Health Care. Over the past two years, she said, it has also contributed $6 million to UNC's coffers.

A merger would likely add several facilities to the WakeMed system, which has facilities in Apex, Cary, Fuquay-Varina, Raleigh, Wendell, Zebulon and Clayton. Rex provides medical services in Apex, Cary, Garner, Knightdale, Raleigh and Wakefield.

Atkinson said he didn't anticipate any layoffs as a result of a merger, since health care is an expanding field.

"We strongly believe that the movement of Rex to the WakeMed system will greatly facilitate WakeMed's mission of service to the citizens of our area while also decreasing costs and providing efficiencies that would further support UNC's mission of providing academic-based patient care, research and teaching," he said.

Rex is willing to discuss collaborating with WakeMed in some areas, such as mental health care, Jenkins said, but UNC Health Care is "a better partner for Rex," adding that UNC is better equipped to help Rex develop innovative services in the future.

Although the decision rests with the UNC Health Care board, state lawmakers could also get involved by passing a bill that overrides any decision by the board.

The potential takeover raises debate about the role of government in health care and the impact on patients.

"For us, it's a very serious question about what is the purpose of government and what is its role," Atkinson said.

He and his lobbyist, Tom Fetzer, met with House Speaker Thom Tillis, R-Mecklenburg, late Thursday morning. Tillis said he has not analyzed the offer but believes it is worth looking at.

"It's always worthwhile to take a look at opportunities that – where a service can be provided to the citizens of North Carolina – may or may not need to involve the government," Tillis said.

Some state lawmakers have said that it's worth exploring whether Rex could be sold at an economic time when the state might need to sell some of its assets.

Rep. Joe Hackney, D-Orange, though, said the sale would be just a one-time shot in the arm.

"I don't think it's a fix for any budget problems. I think the proposed acquisition has a long way to go to get anywhere," he said.

Republican lawmakers, however, said the sale wouldn't fund recurring expenses.

Gov. Bev Perdue's office issued a statement saying she is reviewing the proposal and wants to be sure any decision is in the best interests of both Rex and WakeMed patients and that state's investments.

"She clearly understands the challenges faced by WakeMed and UNC in providing indigent care, as well as treatment for the state's prisoners and mental health patients," Perdue's office said. "The most important consideration is preserving access to quality health care regardless of whose name is on the office door."

176 Comments

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  • tambo888 May 17, 2011

    Patient care is great at both places. Nothing would change with a possible merger.

    It doesn't matter what "name" is on the door. Wake has a level 1 trauma center, top rated heart and stroke centers, and level 4 neonatal intensive care units at Wake. Rex has great heart, stroke and cancer care and more. A merger would make both stronger. I agree with another post - if Rex didn't "cap" their indigent care this wouldn't be an issue. I take issue with the person who commented on having to wait so long in Wake ER's - try an urgent care or a primary doc! ED's are for Emergencies! If you or a family member is having a heart attack or stroke then you would be first in line. You need a primary heart physician to pin point the problem with your heart palpitations.

  • Vietnam Vet May 13, 2011

    All this cryin' and whining about monopolies... Most of you folks don't remember when there was only ONE phone company do you? And it's going back to that. Monopolies are not necessarily a bad thing!

  • bluesportxls May 13, 2011

    It is ironic that most of the people who are so adamant about voicing their opinion tend to be the most ignorant and uninformed.

  • vivianvarela1 May 13, 2011

    first of all I have been a patient at unc,rex,wake,and duke. Their patient care sucks. That is why I stay with Alamance Regional. They take time with their patients and don't treat them like a piece to a puzzle. I have been misdiagnosed by unc,rex,wake and duke. It's a shame they call unc best leading practice with residents that fall asleep while trying to take care of patients. I had to offer a resident a soda during an er visit to help their them stay awake with me in the room. Having had cp, sob, and all the above I didn't even get an ekg i was sent home. UNC ,Rex, Duke, And Wake suck.............!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
    !!!!!!!!!!!!!!!

  • keneds May 13, 2011

    @ OGE so you think Wake would not want you to pay the bill, think of it this way, would it be better if in wake and all the other joining counties had only one car dealership?? how would the service be and would there be any deals....NOT... Wake is a great place but rex also is. we are lucky to have both

  • 2headstrong May 13, 2011

    Having been through both ERs for the same problem, I can say Rex wins, hands down. WakeMed had me sitting in the waiting room for five hours while I endured a resting heart rate in the 140s (which is NOT restful!), palpitations, feeling sick as a dog, etc. By the time I saw a doctor, the episode had finally finished and they couldn't find the problem (and didn't seem to care).

    When I went to Rex a couple weeks later with the same thing, I was seen right away and they were able to catch it happening and actually help me. I was treated with respect and dignity, unlike at WakeMed where the doctor all but told me it was in my head (my condition had been quite obviously bad - others in the waiting room there at WM that night were looking at me like they were afraid I was going to drop dead any minute).

    I will NEVER set foot in a WakeMed ER again by choice. Take me to Rex or just bury me.

  • OGE May 13, 2011

    Maybe Rex would actually be run with some compassion is Wake Med bought them. When we had our daughter there @ checkout they acted like we could not take her home unless we paid all we owed. While we did have the cash to pay for it we paid $50 a month until it was paid off.

    They also put my wife who has a blood clot in her leg in acute care when she went to the ER liek there was nothing wrong with her.

  • FromClayton May 13, 2011

    wake stay away from Rex. I have always had good experiences at Rex, and I have always had bad experiences at Wake. If you are having a baby Rex is the place to be! So wonderful.

    WAKE DONT SCREW UP THE ONLY HOSPITAL AROUND HERE I LIKE!!!!

  • foxhunter May 13, 2011

    It is so irritating to see all these negative remarks about the ER. Fact is a lot of people go to ERs because they don't have insurance. People come in for earaches or headaches...sometimes even a toothache. People should get jobs and get insurance and stop the influx of visits to the ER. Also, teach your children how to behave so the ER stays clean. Learn what a family doctor is....not the ER.

  • Wake1 May 12, 2011

    Atkinson & his lobbyist should run for public office in NC!

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