State Treasurer Dale Folwell has clashed with Vidant Health in the past over state resources and State Health Plan reforms, but isn’t involved in the current battle between the hospital chain and the UNC Board of Governors over control of Vidant Medical Center.

“I was as shocked as your readers were, and the rest of North Carolina, when I first read that this had happened,” Folwell told Carolina Journal during his monthly Ask Me Anything teleconference with reporters Tuesday, June 4. “The only way I can characterize it is it’s bizarre.”

Pitt County stripped the UNC BOG of appointment powers to Vidant Medical Center’s board. VMC is the teaching hospital for East Carolina University’s Brody School of Medicine. The county had appointed 11 members to the hospital’s board of directors under a long-running agreement. The BOG appointed nine. The parties are in mediation to resolve a lawsuit.

Folwell previously was in the middle of Vidant’s push to merge with ECU Physicians, and a separate affiliation initiative between UNC HealthCare and Carolinas HealthCare. In those instances he said he had a financial responsibility to protect state resources and investments. Neither of those proposals went through.

“Our relationship with the Vidant chief executive officer can be characterized as soiled,” Folwell said. The Treasurer’s Office is in an ongoing fray with CEO Michael Waldrum, who also serves as chairman of the N.C. Healthcare Association. That group lobbies for hospitals and health systems, and has attacked Folwell’s Clear Pricing Project.

That reference-based pricing reform pegs State Health Plan payments to a set percentage above government-set Medicare rates. Taxpayers could save $258 million, and plan members $57 million annually.

Folwell pushed back on Vidant’s contention it will lose $38 million annually under the change. He said the potential reimbursement reduction “had everything to do with the fact that they were charging us a lot more than we ever realized. Period.” Conversely, many physicians and hospitals — including those in eastern North Carolina — will see a bump in pay.

Responding to reports of a resolution circulating among county boards of commissioners in Vidant’s 29-county service area to support health care in eastern North Carolina, Folwell said elected officials should be eager to back the Clear Pricing Project. It is designed to increase medical accessibility and billing transparency, while lowering costs.

He hand-delivered a contract to Waldrum, he said, and it is now up to Vidant to decide if it wants to provide health care to state employees. Contracts to join the Clear Pricing Project network must be returned by the end of June.

Folwell said he is encouraged by the response to date, and momentum is building.

In other matters, Folwell said:

  • “May was a horrible month for the pension plan even though we’re up for the year” on investment returns. He didn’t have final audited numbers to present. The retirement system and State Health Plan continue to carry huge unfunded liabilities. Folwell cautioned that the credit rating agency Moody’s downgraded Vermont’s AAA creditworthiness in large part due to unfunded liabilities for pension and other post-retirement benefits.
  • He hopes to have a $300 million bond finalized by the end of the year as part of the $2 billion Connect NC bond referendum passed in 2016. Connect NC was set up for projects involving the UNC system, community colleges, state and local parks, water and sewer infrastructure, agriculture, and public safety.
  • His office issued $600 million in GARVEE bonds to accelerate construction of N.C. Department of Transportation projects. The bonds pledge future federal highway funds for payment of the bonds.