Local News

Prof: Hospital merger would lead to higher costs, lower quality

Posted May 13, 2011 6:01 p.m. EDT
Updated May 17, 2011 12:53 p.m. EDT

— WakeMed's $750 million bid to buy rival Rex Healthcare would be a bad deal for Raleigh patients, a health care industry expert said Friday.

"What we've seen in other markets is the hospitals will consolidate and increase their prices to the public (and) to the insurers and exert monopoly power," said Dr. Kevin Schulman of Duke University.

Schulman, a physician, is director of the Health Sector Management Program at the Fuqua School of Business and Duke's Center for the Study of Health Management.

WakeMed Chief Executive Dr. Bill Atkinson said Thursday in announcing the takeover bid that the combined health care system would lower costs for consumers by eliminating redundancies and would provide more access and better care.

"I don't see how or why they'll spend time improving the customer experience," Schulman said. "Consumers are going to have no other place to go, and they're going to have to go there irrespective of the quality of care provided."

Rex has been part of UNC Health Care for more than a decade, and both University of North Carolina system officials and hospital administrators have dismissed the takeover bid. They insist that UNC can best accomplish its health care mission with Rex in the fold.

Still, the UNC Health Care board will consider WakeMed's offer, which officials said would help erase a projected $2.4 billion state deficit in the fiscal year that starts in July.

Schulman said WakeMed should focus on using its assets to compete with Rex instead of taking it over.

"I'd love for them to take the $750 million and put it toward lowering the cost of care, making care more accessible and affordable and let them gain market share from Rex," he said.

Patients and their families said quality care should be the main priority in ultimately deciding Rex's fate.

"The most important thing is the patients. What type of well-being are they going to have?" said Mike Leach, who was visiting his mother at Rex Hospital on Friday. "A situation like this isn't even about money."