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WakeMed halts bid to acquire Rex

Posted May 22, 2012

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— WakeMed has withdrawn its takeover attempt of crosstown rival Rex Healthcare as part of an agreement brokered by state lawmakers, officials said Tuesday.

WakeMed made a $750 million bid for Rex last year, but UNC Healthcare, which has operated Rex for more than a decade, turned it down, saying Rex is an essential part of its hospital system and the University of North Carolina School of Medicine.

State Rep. Harold Brubaker, R-Randolph, and Sen. Tom Apodaca, R-Henderson, negotiated a pact that calls for more cooperation between the competing hospital systems.

“This agreement is good for North Carolina and good for both of these outstanding health care systems,” House Speaker Thom Tillis said in a statement. “We all know that our state has many pressing health care needs. In a time of limited resources, it is vital that we forge partnerships to get the maximum return on our resources.”

The agreement calls for UNC to spend $30 million to open a 28-bed inpatient psychiatric facility to lessen the load on area hospital emergency rooms, especially after the closing this summer of Dorothea Dix Hospital in Raleigh, the state's oldest psychiatric hospital. Also, UNC will commit another $10 million over five years to support local mental health services.

In addition to dropping its bid for Rex, WakeMed agrees to drop public records requests and other actions against UNC Health Care. 

Officials from both institutions thanked lawmakers for stepping into the breach and finding common ground between the two sides, which have waged high-profile wars over physicians and patients across Wake County in recent years.

WakeMed, Rex agree to collaborative future WakeMed, Rex agree to collaborative future

"We are grateful you have helped us settle our differences," UNC Healthcare Chief Executive Dr. William Roper said. "It's a great day for us, a great day to our two organizations."

"A collaborative relationship between Wake Med and UNC Healthcare is in the best interest of the institutions and in the best interest of the patients which we serve," UNC President Tom Ross said.

As part of the agreement, UNC will file publicly available federal tax forms for Rex and other private operations that it owns, including a physicians network, so that its financial operations will become more transparent.

WakeMed officials have argued that the state subsidizes Rex, putting WakeMed at a competitive disadvantage. UNC officials maintain that Rex generates money for the rest of the hospital system and hasn't been underwritten by state tax dollars.

Asked if the new agreement would have a bottom line impact on his company, WakeMed Chief Executive Dr. Bill Atkinson said he didn't think it would. 

"This is not really about cost savings, it's about service," Atkinson said.

The hospital systems also signed a new five-year contract for WakeMed to continue its role in training UNC medical students and residents.

28 Comments

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  • jrcone1 May 23, 2012

    Thoughts on the government owning private businesses??

  • SENCLand Son May 23, 2012

    I see lots of comments that show no knowledge of the true situation. It was a GOOD thing when WakeMed went private. Hospitals are run best when local politicians aren't allowed to meddle and interfere, and trustees don't generally have political agendas.

    Healthcare providers are better off as well- if you're a nurse at one and aren't happy you can go to another; not so if all the hospitals are all part of one entity. And pay scales remain competitive- when you have competition.

    I think both systems are well-run, and competition spurs excellence in both: Rex does a better job knowing people can go to Wake if they don't, and the reverse is also true.

    I did see one comment that was laughable that said the state has no place in healthcare; really? As if psychiatric and other mental health services weren't already strained, where would we be without state involvement? But the process to obtain certificates of need could be vastly improved by loosening requirements.

  • jrcone1 May 23, 2012

    I think Duke is a private research university and UNC is taxpayer supported part of the state governement. Wouldn't all of this go away if Rex became a branch of the state government UNC hospitals instead of a private business owned by UNC Hospitals?

  • soyousay May 23, 2012

    WakeMed choose to become a private company when bought by the doctors of WakeMed ..

    and just what blog said the docs bought it? because if they had, cardiology would not have walked. It was taken private, with a board of directors that includes community leaders and on an on.

  • soyousay May 23, 2012

    Why is UNC Healthcare running Rex as a private business ...the same reason Duke runs Duke Raleigh as a private hospital

  • bnorris6 May 23, 2012

    Great News! and Great for Rex. If Wakemed had taken over it would only been bad for Rex and the community it serves.

  • jrcone1 May 23, 2012

    To the point below, Rex WAS bought out already by UNC. I assume you go still go there anyway. The question is why isn't Rex now “UNC Healthcare Raleigh Campus” staffed with state employees? Why is UNC Healthcare running Rex as a private business staffed with private citizens competing with WakeMed and Duke? Does the state run other private businesses for profit?

  • veyor May 23, 2012

    I can't believe it! Something right has finally happened.

  • tech28 May 23, 2012

    I agree. I would stop going to Rex if they were bought out.

  • barbstillkickin May 23, 2012

    I am so glad to hear this. We need to have some competition between hospitals so our prices can not be gouged like the rest of the things in this state.

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