Vidant head: Compromise with Folwell possible
Treasurer wants to save taxes; hospitals get less
The Chowan Herald
Monday, March 4, 2019
EDENTON — The head of Greenville-based Vidant Health told state and local officials meeting here last week that he agrees some compromise is possible in Vidant and other hospitals’ ongoing fight with the state treasurer over reforming the State Health Plan for Teachers and State Employees.
Vidant Health CEO Michael Waldrum suggested the possibility of compromise with state Treasurer Dale Folwell the same week state lawmakers introduced legislation designed to delay Fowell’s efforts to reform the plan that covers most health insurance costs for teachers and state employees.
Under Folwell’s reform plan, the state would reduce reimbursement rates to health care providers by 14 percent on average, a move he claims would create annual savings of $300 million for taxpayers and $65 million for health plan members. According to Folwell, the state health plan, starting in 2020, would begin paying providers a rate based on what Medicare pays with an additional reimbursement averaging 77 percent more.
Folwell has said the changes are necessary because North Carolina taxpayers currently pay $3.4 billion annually to keep premiums and other costs manageable for the 727,000 people insured by the plan. Even then, Folwell’s office estimates the plan has $30 billion in unfunded liabilities.
Vidant Health officials actively have opposed the plan, saying it would cut the health care system’s annual revenues by $40 million, forcing it to curtail services, particularly in the rural communities it serves.
Meeting in Edenton with both state and local officials on Thursday, Vidant CEO Waldrum reiterated that position. He said if Vidant is forced to curtail services, the result will be less access to crucial care for tens of thousands of people in eastern North Carolina. Among those affected, he said, would be the state employees who are supposed to benefit from the cuts Folwell has proposed.
“If these cuts go through, our choices are to decrease services, lay off people, close hospitals or shift the cost to other businesses or a combination of all of those,” Waldrum said.
Vidant won’t make those drastic choices because it wants to, he said. It will make them to stay in business.
“At the end of the day, we have to make a profit, we have to pay the banks, we have to be in business — and we will do those things, not because we want to, but because we think that doing anything and being here in some capacity is better than not being here at all,” he said.
Waldrum condemned Folwell’s reform plan, saying its promise to slash costs for taxpayers and State Health Plan members could actually have the opposite effect, particularly if it leads to the closure of more hospitals.
“It could actually worsen health care costs and drive costs up and quality down,” he said. “Because if you think about it, if you slice the prices, won’t hospitals close? It will be harder to get there, so the few (hospitals) that are there can jack their prices up.”
Waldrum said it’s only common sense that when there are across-the-board cuts, those businesses resourced the thinnest, including hospitals, feel it the most.
“My message to all of our elected officials, our state treasurer and the head of Blue Cross/Blue Shield, is that ... they have a responsibility to our communities to help us deal with that reality,” he said. “Hospitals are closing and that’s the issue.”
Among those listening to Waldrum’s presentation Thursday were state Sen. Bob Steinburg, R-Chowan, and state Rep. Ed Goodwin, R-Chowan.
Steinburg, who said he’s been a friend of Folwell’s a long time, told Waldrum that if the State Health Plan isn’t reformed to reduce its liabilities, it will no longer be solvent in 2023.
“So instead of waiting until that happens, Treasurer Folwell is taking the initiative to do things that, in his view, he thinks will help correct this problem and ensure that the State Health Plan, which insures 750,000 North Carolinians, remains solvent,” he said.
However, Steinburg also suggested Folwell may be too unyielding in his approach to reforming the State Health Plan.
“It seems that at this juncture, the treasurer has put himself in a position where he’s just got his heels dug in and he’s not going to move,” he said. “That’s not really a great place to be.”
Steinburg suggested there’s room for compromise between the hospitals and Folwell that can produce a better result for rural health care.
“What needs to be done and what I have pledged to do for President Waldrum, as well as all of you here this evening, is do everything that can be done to get these folks back at the table with the understanding that the hospitals are unlikely to get every single thing they want,” he said. “That’s just a fact. That’s what happens when you go into negotiations — everybody has got to give a little bit. The treasurer is not going to get everything he wants, we hope.”
Waldrum also indicated there’s room for compromise.
“We think this train needs to slow down,” he said. “We need a collaborative process that taxpayers and us have clarity on ... (that leads to a solution that) helps deal with the liability issue but doesn’t decimate rural health care in North Carolina.”
Goodwin added, “We the people of the state have an obligation to take care of the health care plan for the people that we promised it to — both while they were working and while they are retired.”
Reflecting on the war of words between Folwell and health care systems over his reform plan, Goodwin shared a story about what his father used to do to punish him and his older brother when they fought as kids: kiss each other. Goodwin noted the approach worked for his dad and might work in Raleigh, too.
“The issue has really driven a wedge in the Legislature,” he said. “We’re bumping heads — we’re wasting a lot of time on this when we should not be doing that. But I think a solution is in the works, we just got to get it together and always be reminded that if we do not fix it, you all are going to make us kiss.”
Waldrum’s meeting in Edenton came the same week 25 state legislators signed onto House Bill 184, legislation that would effectively delay Folwell’s efforts by creating a joint committee to study reforms to the state employee health plan.
After its study is complete, the committee will “redesign the State Health Plan in a way that adopts new practices and payment methodologies that promote health while incentivizing participation from both enrollees and providers,” the legislation states. The legislation also mandates the state health plan remain with Blue Cross and Blue Shield of North Carolina Blue Options plans through Dec. 31, 2021.
Folwell said the legislation “locks in a failed and bankrupt system” if it passes.
Daily Reflector editor Bobby Burns and staff writer Ginger Livingston contributed to this report.