Published: 22 September 2000
Analyst(s): Jon Galvin
Management Summary The healthcare market in the Triangle region -- a six-county area of central North Carolina that includes the cities of Raleigh, Durham and Chapel Hill -- is beginning to return to financial health after a few years of serious economic difficulties. Several local managed care organizations (MCOs) earned a profit during the first six months of 2000, primarily as a result of two years of double-digit premium hikes. The area's two integrated delivery systems (IDSs), Duke University Health System (Duke) and University of North Carolina (UNC) Health Care System, continue to cut costs while investing in new and updated facilities. The overall economy of the Triangle region is experiencing significant growth, and its population is increasing at approximately 3 percent per year. Duke and UNC Health Care System are the only IDSs in the Triangle region. Duke was once the dominant IDS, but UNC Health Care System, after its purchase of Rex Healthcare, has reached parity with Duke in terms of inpatient admissions. In 1999, UNC Health Care System and Duke each accounted for 40 percent of inpatient admissions in the Triangle region. WakeMed, the sole independent acute-care hospital in the area, accounted for the remaining 20 percent. Duke, UNC Health Care System and WakeMed are competing vigorously for market share, particularly in Wake County, one of the fastest growing counties in the Triangle region. Duke conducts a large amount of medical research, and commands a reputation as a center for top quality medical care. During the last two years, Duke added Durham Regional Hospital and Raleigh Community Hospital to its provider network. Duke is expanding its hospital network to compete with nearby UNC Health Care System and WakeMed. UNC Health Care System, an academic IDS in Chapel Hill, includes five hospitals and offers a full range of inpatient and outpatient healthcare services. In 1999, UNC Health Care System purchased Rex Healthcare, which...
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