UNC Board of Governors member Tom Fetzer, a health care lobbyist, ought not be questioning a proposed partnership between UNC Health Care and Charlotte-based Carolinas HealthCare System. Fetzer lobbies for Blue Cross of North Carolina and WakeMed hospital in Raleigh, both of which could be adversely affected by the partnership. He has a conflict of interest.
But having a conflict doesn’t necessarily make Fetzer wrong. The former Raleigh mayor has raised a valid question about why the discussion of the partnership is happening almost entirely in the dark. And Blue Cross now has come out against the partnership, saying it would drive up health care costs.
In an email to BOG Chairman Louis Bissette, Fetzer noted that state law requires that UNC Health Care’s board keep the Board of Governors “fully informed” about major changes in the health care system’s operations, but so far there has been virtually no information shared with the board. In particular, he cited the silence of UNC system President Margaret Spellings, a BOG employee who also sits on UNC Health Care’s board.
“This is, in my opinion, perhaps the most important health care development in the history of the state of North Carolina,” Fetzer said in an interview with The News & Observer. “If you kept this deal secret for a year, does that fall within the definition of ‘fully informed?’
“The Manhattan Project wasn’t as well-kept a secret as this was,” he said.
Bissette and BOG vice chairman Harry Smith responded to Fetzer by noting his conflict and requesting that he “refrain” from challenging the way the negotiations are being handled. They also asked the state Ethics Commission staff to advise them on what role, if any, Fetzer can have in discussions of the partnership.
While they’re at it, the Ethics Commission staff might take a look at the secrecy surrounding this matter. As a partnership, the two hospital systems would control half the health care market in North Carolina. Experts on hospital mergers say such dominance almost always leads to higher costs to consumers and insurers, which drives up premiums.
So far, leaders of the systems have not demonstrated how this partnership would help consumers. The silence surrounding the negotiations suggests there aren’t many consumer benefits to advertise.
Barak D. Richman, a Duke law professor with expertise in health economics, said more interests, including insurers and large employers, should be able to know and respond to how this partnership might affect them.
“It’s hard to imagine it really doing anything other than increasing the cost of health care,” Richman said. “I don’t understand why large employers are not more vocal about it. They will feel the higher expenses.”
Hospital buy pleases Berger
It’s also curious that in the midst of the negotiations, UNC Health Care decided to buy bankrupt Morehead Memorial Hospital in Eden, home of Senate leader Phil Berger. UNC Health Care paid $11.5 million for the hospital and agreed to invest another $20 million in improvements, N.C. Health News reported.
Berger is the state’s most powerful Republican politician and controls half of the appointments to UNC Board of Governors. Berger’s spokeswoman, Shelly Carver, told N.C. Health News that the Senate leader is “pleased Morehead Hospital has a buyer that will ensure it continues to provide access to care and employ many Rockingham County residents.”
Carver added that Berger was “supportive” of UNC and Carolinas “having discussions about ways they can partner in the future to deliver better, more affordable care to North Carolinians.”
This proposal to create one of the nation’s largest health care systems in North Carolina needs a lot more sunlight. The UNC Board of Governors should hold an open meeting in which Spellings and others explain what is under discussion and what the benefits and costs to consumers would be.