Many health care systems talk about three main pillars of care for treating cancer patients: medical, surgical and radiation oncology. It turns out that having state-of-the-art radiation technology can not only help heal patients, it can also be beneficial to a hospital system’s bottom line.
A high-stakes dispute among three major hospital systems in the Triangle — Duke Health, UNC Health/Rex and WakeMed — has revealed just how financially advantageous such equipment can be.
The clash also gives a glimpse into how certificate of need, or CON, laws can be used to try to stifle competition — and provides insight into the lengths major health care systems will go to try to maintain a competitive edge in the specialized care market.
Fight over pricey machines
The conflict, which has unfurled over the past several years, started with WakeMed trying to add a linear accelerator, or LINAC, to its cancer treatment options.
LINACs deliver high-energy, targeted radiation beams to destroy tumors while sparing much of the healthy surrounding tissue.
Under North Carolina law, the machines are classified as a “new institutional health service” that is subject to state regulations that cap the kinds of medical facilities, services and equipment that can be offered in geographic regions of the state.
WakeMed submitted a petition to the North Carolina State Health Coordinating Council in 2022 to adjust the State Medical Facilities Plan to show a need for the specialized radiation service in Wake and Franklin counties. The state Department of Health and Human Services develops the plan each year with guidance from the council to measure the health care and treatment needs in each area of the state so resources can be appropriately targeted. It’s intended to ensure patients’ access to care while also preventing too much replication that could hurt providers’ revenue.
In the service area that WakeMed was interested in, Duke Health and UNC Health/Rex Hospital operated a total of nine LINACs. Additionally, each system had already received approval to acquire another device.
WakeMed is a private, not-for-profit health care system based in Raleigh. It has been serving its community since 1961 and had declared assets totaling about $1.9 billion in 2024. To develop a fully integrated and comprehensive cancer treatment program, WakeMed wanted to add the specialized radiation treatment that a LINAC provides.
Part of the reason WakeMed developed its own cancer program in the shadows of the much larger Duke Health, with total assets of around $8 billion in 2023, and UNC Health was because WakeMed’s patients were having difficulty accessing care elsewhere.
Because they don’t have a LINAC, WakeMed has had to refer its patients outside its system, costing it potential revenue and adding a financial burden for many patients.
“Without its own LINAC, WakeMed refers 80-85 percent of its cancer patients who need radiation therapy to Duke, providing a significant revenue stream for Duke,” Marcus Hewitt, an attorney for WakeMed wrote in a court document filed Aug. 13 at the state Court of Appeals. “Since 2020, patients referred from WakeMed have represented nearly a quarter of Duke’s radiation consultations and up to $30 million of Duke’s gross revenue annually.”
As part of its pitch to win the necessary certificate from the state, WakeMed noted that it had provided surgical and medical oncology to thousands of cancer patients since 2022. “Obtaining a LINAC would provide WakeMed the missing third pillar of cancer care: radiation oncology,” Hewitt’s court filing stated.
In 2023, the state Department of Health and Human Services awarded WakeMed a certificate that would have helped the system gain that pillar.
Pushback
Almost immediately after the state granted WakeMed the needed permission, Duke Health and UNC Health/Rex filed challenges.
Eventually, UNC Health/Rex dropped out of the fray, but Duke Health persisted.
In February 2025, a state administrative law judge overturned the health and human service department’s decision to award the certificate to WakeMed after he presided over state regulatory appeal process proceedings.
WakeMed then challenged that decision at the state Court of Appeals.
On Jan. 20, WakeMed and Duke Health filed a joint motion to dismiss the appeal, saying they had reached an agreement in undisclosed settlement discussions.
“Since the settlement agreement resolved all claims, there is no reason for this appeal to continue,” the joint motion states.
Because the administrative law judge’s 2025 decision invalidated WakeMed’s certificate of need for a linear accelerator, it is not yet clear what happens next and whether the Raleigh-based hospital will get the equipment.
Under dispute
The dispute between the health care systems comes amid a sharper focus in North Carolina and nationally on certificate of need laws.
The laws came out of an effort initiated nearly 50 years ago to control costs and ensure equitable access to health care. Opposition to the laws has existed for almost as long. That debate has raged off and on in the state’s General Assembly for years, as well as in the courts.
Most recently, New Bern eye doctor Jay Singleton has been challenging the constitutionality of North Carolina’s certificate of need law since April 2020. His case has been from Superior Court to the state Supreme Court and back down again to Superior Court.
His attorney told NC Health News last month that his case could be en route to the state Supreme Court again if he gets his way.
Singleton and free-market advocates contend that the state’s certificate of need laws stifle competition that could make a wider array of services available and help bring down the rising costs of health care.
They argue that more facilities could give patients more options, cut down on care wait times and dismantle hospital monopolies that have kept a vise-like grip on who can provide and ultimately get care.
Hospital systems have long been proponents of the laws. System advocates say not only do they help ensure quality care, but the caps on services and facilities are necessary for them to meet their mandated missions of providing emergency access and treatment around the clock for patients regardless of their ability to pay — and regardless of the profitability of the service rendered.
The North Carolina Heathcare Association, a lobbying organization for hospitals, stated in a 2024 legislative brief that hospitals don’t operate in a traditional free market environment, given that so much of their work is mandated and heavily regulated. Because of that they “rely on certain procedures, such as elective surgical procedures and high-end imaging, to balance losses from many other acute care services,” such as pediatrics and labor and delivery.
The dispute between Duke Health, Wake Med and UNC Health/Rex provided a glimpse of how important those procedures are.
In WakeMed’s court filings, Hewitt described Duke Health’s challenge of the state granting the certificate of need as “Duke’s consistent efforts to block competition and prevent WakeMed from developing the full range of cancer care.”
Ultimately, though, WakeMed said its fight for the certificate was about its patients. WakeMed’s patients wait more than three times longer than the average patient in the service area to begin radiation therapy, Hewitt wrote in a court document filed with the state Court of Appeals.
By having the technology in its system, Hewitt added, WakeMed cancer patients could avoid significant barriers posed by having to travel to another system for radiation treatment.
“[R]eferring radiation therapy patients to other providers is inadequate — dividing cancer care between multiple health systems … hinders communication and leads to delays in care, higher cost, poor outcomes and poor patient and family experience, as WakeMed has encountered,” Hewitt wrote.
This article first appeared on North Carolina Health News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
North Carolina Health News is an independent, non-partisan, not-for-profit, statewide news organization dedicated to covering all things health care in North Carolina. Visit NCHN at northcarolinahealthnews.org.
