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Setting the Record Straight

January 23, 2012

In response to the testimony delivered by WakeMed CEO Bill Atkinson today before the House Select Committee on State-Owned Assets, UNC Health Care System released the following points:

Rex Hospital is a private, not-for-profit affiliate of UNC Health Care:
In 2000, UNC Health Care acquired control of Rex Healthcare, Inc. UNC Health Care used no State funds as a part of this transaction. In a formal opinion, the Attorney General concluded on March 8, 2000 that Rex would remain a private not-for-profit entity after acquisition by UNC Health Care. Today, Rex is an integral part of the UNC Health Care System. Because of this integration, our institutions are able to provide more uncompensated care and better support the UNC School of Medicine.

Rex and State funds:
Rex does not receive one dime of State funding. Rex helps provide financial security to UNC Health Care through negotiating size and strength, and offering a clinical application for UNC Health Care's research. UNC Health Care's State-appropriated funds are used to provide uncompensated care and to support our education mission through the UNC School of Medicine. Rex capital projects are paid for from Rex's operating funds. Rex adds considerable benefits to the UNC Health Care System and does not receive any State funding, either directly from the State or indirectly from UNC Health Care System.

Rex and Medicaid reimbursement:
At Rex, Medicaid and self-pay volume has grown by 76 percent over five years. Inpatient Medicaid and uninsured cases have doubled in recent years. In addition, UNC Hospitals treats 46 percent of the inpatient Medicaid and self-pay cases that leave Wake County.

Medicaid reimbursement rates for WakeMed and Rex are similar. WakeMed says its rates are 83 percent. Rex's combined reimbursement rate is 79 percent.

Rex's work to care for North Carolina's prison population:
Rex Healthcare is contributing to the care of State prisoners. Over the last five months, Rex has provided 8 percent of the State's inpatient prisoner care, 4 percent of ER visits and 1 percent of ancillary visits, similar to WakeMed's share of prisoner care.

 

Entity

Inpatient Visits

ER Visits

Ancillary Visits

WakeMed

8 percent

5 percent

1 percent

Rex Healthcare

8 percent

4 percent

1 percent

UNC Hospitals

13 percent

1 percent

51 percent

Rex Hospital's Heart Center for Excellence:
Rex has provided heart care services in Wake County for more than 100 years, and with Wake County's expected population growth, the need for more specialized services and capacity also will grow in the coming years. The State's certificate of need regulators have twice determined that the Rex Hospital Heart Center for Excellence will not duplicate existing heart services in Wake County and is needed to meet future demand.

Hospitals' role in training medical students:
UNC Health Care's relationship with Rex allows UNC to better train North Carolina's next generation of physicians. There are some medical schools that do not own hospitals, but those medical schools are in a difficult position to find funding and to adequately train physicians. By fully integrating the School of Medicine and UNC Health Care, the two entities can provide a platform for practical learning and exceptional care and can financially leverage their relationship. This integration of ownership is an important element of our successful performance.

Without this integration, the School of Medicine would have to rely on the year-to-year goodwill of donors for financial and educational support. A large part of UNC Health Care's success is due to our close relationship with the School of Medicine.

Teaching at Rex:
Teaching programs are taking root at Rex. Rotations for UNC residents in general surgery, pediatrics, cardiology and cardiac surgery, for example, are being developed at Rex. As the demand for community-based teaching sites increases, Rex will play a crucial role in educating North Carolina's next generation of physicians.

How we work with WakeMed to train physicians:
Our partnership with WakeMed spans a broad range of clinical services. Today, it includes more than 30 UNC faculty members who practice full time at WakeMed, and 57 resident full-time equivalents. In fact, UNC has academic responsibility for 95 percent of WakeMed's residents. Much of the administration for these residents, including program development and training, is housed at UNC Health Care. WakeMed receives federal reimbursements of $5.7 million a year above the amount it pays UNC Health Care for the direct medical education costs.

In addition, the UNC partnership enables WakeMed to broaden the specialized care it can provide. For example, WakeMed's status as a Level 1 trauma center is secured as a result of our partnership. In services such as obstetrics, pediatrics and ear, nose and throat, UNC faculty and residents provide the majority of WakeMed's care to charity and Medicaid populations. We are proud that our partnership helps to improve the health of those who most need it.

As we move forward:
UNC Health Care System values its partnership with WakeMed. We continue to work with its Board of Directors to determine ways we will be able to continue our partnership in the future. We remain hopeful that we will be able to move forward and partner in the future.