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By Thomas Goldsmith and Rose Hoban

The heart and vascular hospital opened today by UNC Rex Healthcare will not only provide high levels of care for its targeted patients, but will also free up some 100,000 square feet of space at its neighboring facility, officials said at a recent opening ceremony.

The new five-story building contains 306,000 square feet of space and has 114 patient rooms. It will be booked solid from day one, said Dr. James P. Zidar, physician in chief at UNC Health Care heart and vascular services.

During the opening ceremonies Thursday, Zidar was one of several speakers who recounted the hospital’s long planning period, which started when David Strong was president of Rex, before he joined Orland Health in 2015.

“Perhaps, David, we didn’t think big enough,” Zidar joked during the event, which Strong attended.

Bob Thomas, chairman of the UNC Rex Healthcare Board of Trustees, said the opening of the heart and vascular building marked a new chapter for Rex, which dates its beginnings to 1894 in downtown Raleigh. A new behavioral health clinic, the result of a $2.5 million gift from an anonymous donor, was described as one of the first beneficiaries of the “repurposing” of space made available by the move of heart and vascular services into the new building.

“It will make the emergency department more efficient and safer,” Thomas said.

Emergency departments across the state have seen behavioral health patients piling up for hours and sometimes days while in need of specialized treatment.

Competition for hearts heats up

In a development in the same sphere, Duke Health announced on Valentine’s Day a collaboration in heart care services with WakeMed Hospital. The effective date for the joint effort, called called Heart Care Plus+, was March 1.

“This is not a merger between the two organizations,” Duke officials said in a press statement at the time of announcement. “Duke Health and WakeMed will continue to operate independently apart from the collaboration and maintain their own identities.”

The confluence of events is reminiscent of the 2010 tug-of-war between WakeMed and Rex largely over who controlled the profitable cardiac care market in Raleigh. A large group of cardiac doctors defected to Rex soon after WakeMed created specialty clinics and operating rooms to house them, spurring the public conflict between the two Raleigh institutions.

Eventually, members of the General Assembly mediated a resolution to the dispute. 

That episode, and this, illustrate the high stakes for attracting cardiac patients.

“These are services that are very high margin,” said Harvard health economist Ashish Jha. He noted cardiac care is among the mostly highly reimbursed by private insurance and by Medicare, the federal program which provides insurance for seniors.

Both Rex and their competitors across town have ramped up cardiac services to take advantage of that robust reimbursement.

“The way hospitals make the margins that they need, to compensate for taking care of Medicaid patients or taking care of uninsured patients is through their private payers,” Jha said.  “In general, hospitals will do well on their private payers and that’s how they recover costs and manage to stay afloat.”

Thomas Goldsmith

Thomas Goldsmith worked in daily newspapers for 33 years before joining North Carolina Health News. Goldsmith is a native Tar Heel who attended the UNC-Chapel Hill, and worked at newspapers in Tennessee...