Folwell, VECU inch ahead on state employees' transition issues
By Michael Abramowitz
The Daily Reflector
Thursday, July 12, 2018
As the deadline to complete a merger between ECU Physicians and the Vidant Health medical group draws closer, officials still are working out employee benefit details.
To help them, officials have enlisted the advice of a Washington, D.C., tax law firm.
Right now, employees of ECU Physicians work for the state and participate in a government pension plan but the Vidant Health medical group is privately operated. So leaders must determine the future of state employees’ long-term health care and other benefits, including the state pension plan, in which they have become vested during their years of employment.
In pursuit of some answers and best options, Vidant and ECU leadership earlier this year drafted a letter of agreement with State Treasurer Dale Folwell to jointly seek assistance from outside tax counsel — Groom Law Group in Washington, D.C.
It took some time, however, before the letter was signed.
When leaders of VECU — the combined Vidant Health and ECU Physicians — met on June 6, Folwell asked ECU’s representatives on the board why they had not yet signed the letter they drafted months earlier.
Dr. Mark Stacy, dean of the Brody School of Medicine and chairman of the VECU board, apologized about the hesitation and time lapse, saying the matter needed careful review which took more time than had been anticipated. Folwell said that ECU signed the letter following his call.
This week, Folwell informed participants that the tax counsel has been reviewing the matter.
“We’re in touch weekly with the tax counsel, with our counsel, VECU’s counsel and the N.C. Attorney General’s Office to make sure that whatever the tax counsel gives its opinion on is accurate,” Folwell said.
In addition, the Treasurer’s Office is examining the potential effect of the merger on tens of millions of dollars in bonds it has issued over multiple decades in support of ECU Physicians and related entities.
“We want to know the impact on bond holders who thought these were issued on the full faith and credit of the state of North Carolina,” he said.
Folwell reported that the bond counsel, with whom his office communicates weekly, is “in the final innings” of forming its opinion on the bonds.
“We expect a response sometime between now and Labor Day,” he said.
Folwell said he continues to work with the ECU employees on the issues of their retirement and health care benefits. He did not announce any resolution of those issues.
VECU board members, including Stacy and Vidant Health CEO Dr. Michael Waldrum have reiterated their commitment to have the Project Unify transition process completed and operational by Jan.1. Folwell, however, is unconstrained by that deadline.
“Quite frankly, all of these deadlines and all of these issues should have been resolved long before I was sworn in as State Treasurer,” he said. “This has been going on since Treasurer (Janet) Cowell was in office. We need to have a big goal and a short deadline. This is an asset the taxpayers have paid for.”
In a 2017 interview, Waldrum and ECU Chancellor Cecil Staton talked about why the two institutions are making the change and acknowledged the two institutions' responsibility to grow and manage the system that delivers health care to most of eastern North Carolina, a region sorely in need of the best they can offer.
“We are in unprecedented times in health care and health education,” Waldrum said. “Rural medicine is under great threat (nationwide). More hospitals in rural communities are closing and people do not have the access to care that they need ... and the nation needs answers to these serious problems.”
Staton argued that unification of the two institutions’ missions and strengths will improve the quality of health care, operational efficiency, the health care experience for patients, staff and physicians and improve education and research capabilities.
“When you think about the unique resources and the strengths of having Vidant and a medical school at ECU and all our commitments to the health sciences, shame on us if we don’t find ways to strengthen that partnership and find ways to leverage our assets to make an even more significant impact across eastern North Carolina,” Staton said.
Contact Michael Abramowitz at email@example.com or 252-329-9507.