State Health Plan cuts would hurt rural care

North Carolina Treasurer Dale Folwell says the State Health Plan needs to change the way it reimburses health care providers to reduce costs.
North Carolina Treasurer Dale Folwell says the State Health Plan needs to change the way it reimburses health care providers to reduce costs. tlong@newsobserver.com

Recently, State Treasurer Dale Folwell made a series of remarks regarding the State Health Plan, as he reviews options for covering the cost of health insurance for state employees. His solution would be to enforce massive cuts — to the tune of $400 million — to health systems and hospitals across North Carolina.

While the treasurer talks about the “average” impact these cuts would have across the state, it’s important to note that rural communities are not average. The treasurer’s proposal would have a disproportionate impact on these communities, including eastern North Carolina.

North Carolina has the second largest rural population in the United States with over 3 million people living in rural communities. Communities that also have lower incomes, lower job growth, higher poverty rates and higher health disparities with higher mortality than urban communities. Communities that need access to quality care—care which would be limited should the treasurer’s proposal go through.

Vidant Health understands this all too well. As a system comprised of eight hospitals with more than 500 providers in more than 90 locations, we serve 1.4 million people in 29 largely-rural eastern North Carolina counties, one of the most difficult health care markets in the country.

Vidant stands to lose $40 million as a result of treasurer’s proposal. Given we are a not-for-profit organization that reinvests our profits back into the communities we serve, this will have a detrimental impact.

Health systems have a duty to care for every patient. As an elected official, the treasurer has a duty to serve every citizen of North Carolina. If his proposal is enacted, it will compromise our ability to provide essential services—and people who live in rural markets will be impacted most.

Look at fees first

Past performance audits show the State Health Plan issues are not new. I believe examining the long-standing, 25-year relationship between the State Health Plan and Blue Cross Blue Shield of North Carolina (BCBSNC) should be part of finding the best solution to these complex problems.

To date, there has been no public disclosure of what has driven the liabilities for the State Health Plan, nor the fees paid over those 25 years to BCBSNC to administer it. This doesn’t happen in other states — a recent American Medical Association study found North Carolinians are in one of the least competitive health insurance markets in the country.

This is a problem.

While we don’t know if the treasurer’s plan will solve the state’s liabilities, we do know it will hurt rural communities.

Whether you serve—or are served—by North Carolina health systems and hospitals, I urge you to tell your elected officials these arbitrary cuts are not the right solution. Our representatives need to know you will not stand for changes that are in the best interest of a select few and hurt a majority of our state’s residents, especially those living in rural North Carolina. There are better solutions for all North Carolinians—we need the treasurer and Blue Cross Blue Shield of North Carolina working with hospitals and providers to find them.

Mike Waldrum, MD, is the chief executive officer of Vidant Health.