News: CJ Exclusives

War of words intensifies between hospitals, treasurer over SHP pricing

Roughly a week after State Treasurer Dale Folwell sweetened the State Health Plan, major hospitals don’t seem tempted by the treasurer’s latest carrot. 

As negotiations devolve into a struggle of wills that resembles nothing so much as an escalating game of chicken, hospitals are eyeing the newest deadline skeptically.

The State Health Plan is due to go broke in four years. Folwell hopes to save it with his Clear Pricing Project, which would tie reimbursements to Medicare prices. He describes the current system as a blank check, which he plans to rip up and replace with a transparent pricing system. 

Hospitals are panicking, and most of it comes down to the money. 

Vidant Health alone stands to lose $38 million each year from Folwell’s reimbursement rates, a loss the network says will damage its ability to provide care. Other hospitals worry about having to make cuts in rural areas and for expensive cancer treatments. 

“We cannot advocate for anything that would limit access to care,” Vidant Health spokesman Jason Lowry said. “Vidant is already having to make difficult decisions and an additional $38 million in annual cuts as a consequence of the treasurer’s plan will harm those who depend on quality health care in eastern North Carolina to include state employees.”

The hospital networks run by UNC, Atrium, Novant, and Vidant all said in various statements they’re weighing the new offer, sometimes adding they feel hopeful they can collaborate with the treasurer. But beneath the statements festers a growing bitterness. 

After the story broke revealing that UNC Health Care helped fund third-party attacks on Folwell, things have gotten increasingly personal. The hospitals’ latest beef is with the State Employees Association of North Carolina and its counterattacks — the most memorable to date is MillionDollarMike.com, a website dedicated to slamming Dr. Michael Waldrum, CEO of Vidant Health.

“It seems Treasurer Folwell wants to shift the responsibility onto the backs of hospitals, doctors and their patients through an outdated plan, which actually will threaten affordability and quality care for everyone in the state — not just for state employees,” Atrium Health spokesman Chris Berger said. 

Berger called the CPP a “step backwards,” and called for alternatives.

He points to House Bill 184, which would create a committee to study the State Health Plan and the CPP. In effect, the bill would push any changes back a year, delaying reference-based pricing and creating the opportunity to scuttle the reforms entirely. 

“We absolutely agree with transparency, and that the state health plan liabilities need to be resolved. That’s why we’ve been pushing H.B. 184,” Lowry said. “We want to bring all parties to the table to design the right solution for North Carolina. …The health care of state employees is too important for decisions to be made in silos. We need everyone working together.”

Along with eight legislators and the plan executive administrator, the committee would be staffed by four medical-industry figures and three representatives of state employees. The bill passed the House and is parked in the Senate Rules Committee.

Hospitals sell it as a chance to slow down and deliberate before dealing serious damage to the health-care system.

Folwell is more cynical. He points to the imbalance between the conglomerates of health providers and state employees, and all but laughs at the bill’s promise of reform. 

“They’re pouring you the same Kool-Aid that they’ve been serving for years,” Folwell said. “The only reason that they would lose money is that they’ve been using the State Health Plan for enormous profits for a long time. This is what they always say. The fact is that they are in favor of secret contracts and higher costs.”

While the war of words continues, CaroMont Health has joined the State Health Plan. CaroMont is a Gastonia-based network with practices in the southwestern Piedmont.

“The decision to participate in the State Health Plan Clear Pricing Project was driven by our commitment to the state employees who live and serve in our community,” CaroMont Regional Health said in a statement. “They are our friends, family and neighbors, and we felt an obligation to ensure they maintain access to care in-network.”

*Editor’s note: This story was corrected after publication to clarify a quote from Jason Lowry of Vidant Health.