Debate over health care costs in North Carolina

Dale Folwell puts it very bluntly.

“No one in North Carolina consumes health care, it consumes them,” he says.

Folwell is the state treasurer in North Carolina, which makes him responsible for paying for the health care for the 730,000 or so state employees – something that eats up more than $3 billion, which Folwell says is more than the state spends on its entire, 17-campus university system each year.

“We are unsustainable, currently, as a state health plan if we keep paying the rates that we've been paying,” says Folwell.

That’s why he wants to bring the power of being the biggest negotiator in the state to cost negotiations for health care.

“The number of people in the state plan is as large as all the folks that work for JP Morgan, Berkshire-Hathaway and Amazon combined in the United States,” Folwell says. “We are the largest purchaser of health care and pharmaceutical benefits in the state of North Carolina and we have not been taking advantage of the buying power associated with that.”

But to do so, he needs to know not just what he is being billed for health care, but what that health care really costs.

“I'm the state treasurer, I sent a request to the state hospital which is otherwise known as UNC Health Care and I said, 'I know what you’re charging me, what am I supposed to pay?' And I received a response back from them where they gave me no information about what I was supposed to pay and said I wasn't entitled to that,” Folwell says.

In response, Folwell says he’ll begin paying providers what Medicare pays plus a 77 percent mark-up to make sure they can cover all of their responsibilities.

The state hospitals association says that doesn’t take into account caring for the tens of thousands of people who either can’t or won’t pay their bills.

“I think the reality, at least in North Carolina and our country, is that there's this compact, whether it's written or not, that individuals who are insured are helping to support those people that don't have insurance. So it's happened for years,” says Steve Lawler, the president of the North Carolina Hospital Association. “We've had what we call cost shifting, where those folks that are insured through private insurance or through an employer participate in this compact to help support all people's access to care.”

And Lawler believes Folwell’s compensation plan will do grave damage to that compact.

“If it moves almost half a billion dollars in support to hospitals, health systems and physicians then I would say that is an unacceptable strategy for those that are caring for patients,” says Lawler.

Folwell says it is more likely to reduce taxpayers’ burden by $300 million. See more on the debate in this edition of the Buckley Report.

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