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Novant hits snag in bid to build Holly Springs surgery center

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Novant Health, a Winston-Salem hospital chain eager to expand into the Triangle, has suffered a setback in that effort.

Novant last year won permission from state regulators to build a surgery center in Holly Springs, its first major foothold in this region. But Raleigh hospitals WakeMed and Rex Healthcare appealed the decision, contending that Novant used inaccurate information in its application.

An administrative law judge recently agreed. The judge, Donald Overby, recommended that Novant's project should be denied, in part because Novant's "financial projections are not credible, reliable or reasonable."

He also determined that WakeMed's proposal to add operating rooms at its Cary campus was superior and should be approved.

The judge's recommendation sends the case back to the Division of Health Service Regulation, an arm of the N.C. Department of Health and Human Services. The state regulates medical projects using patient volume, projected need and other factors, mostly to control health costs.

"We strongly believe the [division] made the right decision originally for Novant to serve the people of the Holly Springs community," said Novant spokeswoman Kati Everett. "We will appeal this process until we are able to bring operating rooms to Holly Springs."

Rex had also applied to add three operating rooms in Holly Springs, but Overby determined that WakeMed's proposal was better. WakeMed proposed adding three operating rooms in Cary at a cost of about $1.96 million per room, which was cheaper than Rex's bid of $2.91 million per room.

Novant has been trying for several years to build a hospital in Holly Springs. Leaders of the Southwestern Wake County town also have lobbied to get a hospital, which they say is needed to serve Holly Springs' fast-growing population.


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Croony capitalism at it's

Croony capitalism at it's worst. Our governemnt restricts supply and protects the incumbents. This keeps prices artificially high and patients and insurance companies pay the price.

It's time to end the Certificate of Needs process and allow companies to build what they think the market will bear. If there is an over supply and a price war ensues, something tells me that prices will start falling.

To restrict supply to keep prices high is beyond stupid, imo.

Government, once again

Government, once again preventing competition, patient access, and expansion of medical care.

Upset with ever rising costs of healthcare?  Government is why.  And it certainly is not the solution.

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About the blogger

Assistant Business Editor Alan M. Wolf joined the N&O in 1999 covering the business of health care. He became an editor in 2001, and helps oversee the paper's daily business coverage and Sunday Work&Money section. He lives in Clayton with his wife and two children. Reach him at 919-829-4572 or e-mail him.