Hearts and Minds, Part 3

Hospital CEOs argue, spur fight over WakeMed and Rex

With different styles, leaders of Rex and WakeMed find it difficult to make peace

mlocke@newsobserver.comDecember 13, 2011 

  • Health care reform brought swift and dizzying changes to the medical landscape in the Triangle: Hospitals raced to get bigger; doctors rushed to join hospital systems. All this changed the relative harmony between Wake County's largest hospitals: WakeMed and Rex, part of UNC Health Care.WakeMed leaders began to fear that UNC Health Care's expansion plans included buying them. Last summer,WakeMed suffered a major blow when a premier cardiology practice that helped offset other losses aligned with cross-town rival Rex.
  • To re-create the critical meetings and moments that led to WakeMed's efforts to buy Rex Healthcare, reporter Mandy Locke spent nearly two months interviewing dozens of physicians, hospital administrators, hospital board members, state officials and community members.

    Locke reviewed notes taken during and after many meetings, letters between key players, financial documents and personal calendars to try to re-create events. Locke occasionally constructed quotes offered during key meetings. In those instances, she quotes the people as they remember speaking and confirmed the meaning of the comments with others who attended.

Third of four parts

After a big cardiology practice long associated with WakeMed aligned with Rex Hospital, Bill Atkinson refused to sit quietly.

The WakeMed CEO told reporters that UNC, through its ownership of Rex, was creating an unfair playing field in Wake County. He complained that public subsidies allowed UNC and Rex to make deals such as the one with Wake Heart, the cardiology practice that drove much of WakeMed's heart business.

Dale Jenkins, the Rex board chairman, figured board members could step in and ease tensions. He and Billie Redmond, chairwoman of WakeMed's board, invited leaders of both boards to a meeting days before Christmas in 2010.

Redmond invited Atkinson. Jenkins brought Bill Roper, CEO of UNC Health Care.

With minutes, Atkinson accused Roper of letting UNC be predatory. Roper told Atkinson he was out of bounds.

As the two seasoned executives quarreled, board leaders caught a glimpse of the rocky road these hospital systems were navigating under the leadership of two CEOs who typically got their way.

"These are two men who are accustomed to being in charge and being right ...," Redmond said. "To run an organization of that size you have to be strong and confident."

Atkinson and Roper lead staffs as large as a small town and broker multimillion-dollar deals in the course of a business day. Both have a track record of bringing innovation to the institutions they lead, largely because of their stamina and resolve. They rarely back down.

But their strengths would become burdens as Wake County leaders tried to untangle a disruption in the health care market that WakeMed feared would threaten its stability.

WakeMed and Rex had competed in relative harmony for decades. But UNC's purchase of Rex in 2000 brought a dynamic that WakeMed leaders struggled to fully comprehend and manage in the years that followed.

The defection of 23 heart doctors to Rex and UNC in October 2010 brought all those tensions to the surface.

Atkinson and Roper had interacted for more than a decade at professional meetings, but mostly, they lived in two different worlds.

Roper is a Republican and methodical bureaucrat with years of backroom Washington negotiations under his belt. Atkinson is an activist who often supports Democrats. He does not care much for the niceties and sluggishness of bureaucracy.

Roper speaks slowly and softly and wears a bowtie. Atkinson talks passionately and with the fervor of a Southern Baptist pastor.

Neither minces words.

As they argued at the December meeting, WakeMed and Rex's board members wondered how the two of them would lead the hospitals through this tumult.

Enjoying emergencies

Atkinson, 57, doesn't sleep much. He tries to cram two days of work into one. His career moved at a similar breakneck pace.

A Greensboro native, Atkinson spent his high school years at Oak Ridge Military Academy, studying tactics and strategy. He fell in love with emergencies and all the complications they brought.

"I couldn't imagine being involved in something that didn't have problems," Atkinson said.

As a teenager in the 1970s, he trained to be an emergency technician. During college at UNC-Greensboro, he worked 48-hour weekend shifts for a local rescue squad.

Atkinson ended up in health care administration during an internship while earning a master's degree in public health.

At age 29, he became executive director of a Humana hospital in South Carolina. Since then, he has hop scotched the country, managing hospitals large and small. While in Colorado in the 1990s, he earned a doctorate in public policy.

Though Atkinson has studied public policy and has watched politics for years, he forgoes the unspoken rules. He ruffles feathers, speaking with unusual bluntness in public.

"You can't be one thing on Monday and another on Tuesday," Atkinson said of UNC wanting to compete and collaborate with WakeMed. "Will the real UNC please stand up?"

When a headhunter called to ask him whether he'd be interested in becoming CEO of WakeMed in 2003, Atkinson hesitated.

The hospital seemed to be in great shape, and Atkinson preferred disasters.

Atkinson quickly spotted a major problem after he arrived at WakeMed. The hospital lost millions on services such as caring for trauma patients in the emergency department and delivering babies to low-income mothers. Still, Atkinson reveled in addressing such a critical mission.

He decided WakeMed should do more. He proposed building a children's hospital, a place that could offer the specialty care for children previously offered only in Chapel Hill and Durham, even though he knew that in-patient stays for children at the new hospital would lose money each year.

In Chapel Hill, the project caught Bill Roper's attention. In 2008, Roper reached out to Atkinson to talk about UNC or Rex partnering on the children's hospital.

In the big leagues

As a pediatrician, Roper, 63, knew much about caring for children.

Though he logged long hours in hospitals treating sick children, Roper spent his career working in the field of public health, thinking about system changes that could keep people from getting sick or hurt. He thought of it as practicing medicine for an entire population.

Roper's public health experience, and his training as a doctor, rocketed him into national service.

In 1982, Roper became a White House fellow, a prestigious program that grooms a dozen or so promising young men and women to be leaders.

Roper stayed in Washington, landing a job as a health policy adviser for President Ronald Reagan. He was then tapped to become administrator of the organization that administers Medicaid and Medicare funding.

Roper soon became a fixture in Republican policy circles, and when George H.W. Bush became president in 1989, he tapped Roper to head his domestic policy team.

From there, Roper was sent to Atlanta, to head the Centers for Disease Control and Prevention.

When his party lost control of the White House in 1992, Roper veered into the private sector, researching health care for Prudential.

Roper found academia by happenstance. In 1997, an administrator from UNC-Chapel Hill asked whether he would lead the university's public health school. His family took easily to Chapel Hill and its vibrancy.

In 2004, the UNC Board of Governors selected him to lead UNC Health Care, a post that would require him to pull on every bit of his experience. He would navigate complicated health care financial reports, manage teams that treated the most complex of cases and sort through the shifting policies coming out of Washington.

He was responsible for an annual budget of $2.2 billion and 8,000 employees, not including roughly 5,000 at Rex.

Roper is meticulous. He arranges binders full of notes along his desk. When he sees a smudge on a family photo in his office, he immediately wipes it clean.

Roper can be seen as aloof, and in 2007, he faced sharp criticism for millions in bonuses paid to executives while poor families faced aggressive bill collections.

For Roper, most everything seems possible. When someone tells him no, he hears an invitation to come up with another proposal.

When he called Atkinson in 2008 to offer to lend a hand with the children's hospital, Roper assumed Atkinson would accept his help. Instead, Atkinson said he'd think about it.

Then, Atkinson asked Roper for something: designate WakeMed a teaching hospital, a title that would heighten its status. Roper said he'd think about it.

A blunt discussion

Atkinson eventually declined Roper's help with the in-patient children's hospital, a 25-bed operation that opened in 2010.

And Roper declined to award WakeMed the teaching status, even though 30 UNC doctors practice and teach residents at WakeMed each day.

When the two exchanged words at the December 2010 meeting, Roper thought they might still find a way to get past their differences over Wake Heart.

In March of this year, he asked Atkinson for a meeting.

In a room at the N.C. Hospital Association, Roper told Atkinson to lay it out for him, to tell him everything that bothered him about UNC and Rex.

Atkinson told Roper that the spirit of UNC didn't permeate through Rex and that WakeMed was being forced to fight a hospital that carries little of the charity care burden.

Then, Atkinson told him that Roper's refusal to designate WakeMed a teaching hospital had stung. He explained that he and his staff wanted a mere acknowledgment of the work already going on at the hospital.

Roper wrote in his notebook: "nuances missed."

Roper told Atkinson that he wanted the same relationship that he has with Duke University Hospital's CEO: civility despite competition.

Roper was taken aback by Atkinson's level of frustration. After the meeting, he sat in his car and wrote some notes.

He reminded himself to talk to Rex CEO David Strong about Rex's behavior, to consider making WakeMed a teaching hospital, and to figure out some way to repair the rift opened by the Wake Heart move.

Then, he wrote a single word: "Respect."

Vision of merger

Atkinson and Roper met again on April 5.

Roper suggested some small projects the hospitals could tackle together to restore trust: a joint venture hospital in Holly Springs, a Hispanic health initiative, a branch school of medicine at WakeMed.

Then, Roper brought up Wake Heart, the cardiology practice that chose Rex over WakeMed. Roper said he couldn't undo the deal. He suggested a meeting to discuss how the group could continue work at both Rex and WakeMed.

Roper then shared with Atkinson his vision for the future: One day, WakeMed and UNC, similar in mission and history, would merge.

Roper told Atkinson that work to this end could be the crowning achievement of both their careers. Roper told Atkinson he'd rather do that than spend the next five years of his career trying to grindWakeMed into the dirt.

Atkinson response was simple and direct. He asked Roper to sell Rex to WakeMed.

In jest, Roper replied: "We'll sell you half of Rex if you sell us half of WakeMed."

Both men laughed.

Tomorrow: An unwelcome offer renews the fight.

Locke: 919-829-8927

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