Local News

WakeMed pitches mental health expansion in bid for Rex

Posted May 19, 2011 4:20 p.m. EDT

— WakeMed has sweetened its bid for rival Rex Healthcare by offering to spend $50 million on mental health facilities if the deal goes through.

Chief Executive Dr. Bill Atkinson said in a letter sent Wednesday to Gov. Beverly Perdue and House and Senate leaders that WakeMed could add 40 to 60 beds for mental health treatment in Wake County if it were combined with Rex.

"There is a mental health crisis in Wake County, and there promises to be an even more urgent need if Dorothea Dix Hospital closes this year as scheduled," Atkinson said in the letter. "WakeMed has tried to work together with the county and other hospital systems to address this community issue. Unfortunately, no viable mental health care solution has been proposed to date, and given WakeMed’s current indigent care burden, we are not in a position to shoulder mental health care alone.”

Last week, WakeMed offered to buy Rex for $750 million, saying it would improve access and lower costs by eliminating duplication of services. Rex officials have called the bid a hostile takeover.

The offer is under consideration by the board of UNC Health Care, which has operated Rex Hospital and its affiliated operations since 2000. The board, however, passed a resolution Monday stating that a sale wouldn't be in the best interests of UNC, Wake County residents or the state.

Atkinson also said in his letter that WakeMed is one of North Carolina's top providers of care to low-income and uninsured patients and charged that Rex doesn't provide a fair share of charity care.

"WakeMed is ... increasingly concerned that a government-subsidized, unlevel competitive landscape will cripple WakeMed’s ability to deliver on its mission of caring for all, regardless of the ability to pay," he said.

WakeMed has facilities in Apex, Cary, Fuquay-Varina, Raleigh, Wendell, Zebulon and Clayton, while Rex provides medical services in Apex, Cary, Garner, Knightdale and Raleigh.