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State Health Plan insolvency must be addressed

Peter Robie

Peter Robie

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Sunday, March 24, 2019

As a member of the Board of Trustees of the North Carolina State Health Plan, I want to give a board-member perspective on some of the issues surrounding our proposed changes to medical provider reimbursements.

The board has devoted many hours to this problem and fully supports Treasurer Dale Folwell in his planned Medicare-based reimbursement plan. The members of the board have a fiduciary and moral duty to be the voice of the state workers in the funding of their health care. We need to financially fix what is now an unsustainable growth in costs that endangers the solvency of the health plan. We believe changing reimbursement to a Medicare based reimbursement program will keep the state health plan solvent by making charges not only predictable but reasonable.

We are all volunteers and receive no compensation from outside groups for our service. We have tried to take an objective and common-sense approach to keep the plan solvent as it is currently on an unsustainable financial path.

The State Health Plan is one of the largest items in the state budget, consuming 3.2 billion dollars annually. One of the economic challenges of the board is to prevent increases in premiums for state employees. In order to do this, the only options available are to change the payment of provider charges to a predictable system, or to have the state legislature increase their subsidy to the plan, an action that could lead to higher taxes to state residents.

Providers charge the State Health Plan vastly different rates that are usually much higher than what Medicare charges. In the initial discussions with the board, every provider has refused to discuss their charges, making it impossible to predict costs or project budgets for keeping the State Health Plan solvent. I am not confident that discussions with providers to control health care costs can proceed when we are not told how charges are determined. Implementing a Medicare based pricing plan would provide predictability in budgeting, which year after year, would enable solvency for the State Health Plan and stability for state workers.

There is a concern our new reimbursement plan would imperil rural hospitals. This is a complex subject that involves many more issues than the State Health Plan, and it deserves a special legislative meeting focused on the needs of rural providers. I am certainly sympathetic to their plight but do not feel it is the job of the State Health Plan to pay higher charges in order to keep these providers/hospitals solvent -that is a role that should be shared by everyone, not just the teachers, police, firefighters and other state workers. These people work long hours for low pay and cannot pay more for their health care as a result. Other sources to financially support rural providers/hospitals must be found.

I welcome discussions with the state hospital and medical associations to control health care costs, but we need to financially fix the solvency of the State Health Plan now. We do not have the luxury of trying untested cost saving measures that may not succeed. I hope our common-sense approach is supported by the majority of the state legislature, but especially supported by the citizens of North Carolina. The board will continue to be your voice, and the voice of state employees in controlling health care costs to your State Health Plan.

Peter Robie is a geriatrician in Winston Salem affiliated with Wake Forest Baptist Health and a member of the State Health Plan Board of Trustees.

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