WakeMed, Rex take buyout bid before legislators
Posted January 23, 2012
Raleigh, N.C. — The debate between Triangle hospitals continued Monday with WakeMed asking state lawmakers to take a second look at its offer to buy Rex Hospital from UNC Health Care.
WakeMed made a bid for Rex last year for $750 million, but UNC turned it down, saying Rex is an essential part of its hospital system and medical school.
Rex directly competes with WakeMed in Wake County, and WakeMed CEO Bill Atkinson told lawmakers Monday that that competition is unfair. He said UNC as a state institution is subsidized by taxpayers and gets better reimbursement for Medicaid patients than WakeMed does.
"We don't mind competition as long as it's a level playing field. But when you're competing against the government, it's not a level playing field," Atkinson said.
The state has a law, the Umstead Act, that prohibits the government from competing with private businesses, but it doesn't apply to the UNC system.
UNC officials say taxpayers aren't subsidizing the hospital system and that it's the other way around. The hospital system contributed $105 million last year to help offset the cost of the UNC School of Medicine.
They say WakeMed is just trying to slow down competition from Rex, especially in profitable areas like cardiology. A group of cardiologists left WakeMed and moved to Rex in 2010.