Protecting NC Taxpayers: State Treasurer Asks UNC Healthcare To Put Their Money Where Their Mouth Is
RALEIGH – Republican State Treasurer Dale Folwell keeps his sleeves rolled up when it comes to mitigating risks to N.C. taxpayers. The latest example of his commitment to fiscal conservatism is his asking UNC Healthcare for a $1 billion performance bond guaranteeing that any merger with the Carolinas HealthCare System would not increase medical costs for the State Health Plan and North Carolina taxpayers.
In August of last year, the two health care providers announced they were going to form a new organization. Combined, the two entities would operate more than 50 hospitals employing 90,000-plus people. If successful, the combined groups would represent one of the largest non-profit health care providers in the nation with profits of over $1 billion per year. However, many have questioned whether the new organization would have too much power, potentially driving up health care costs for all North Carolinians.
“I’ve spent my whole professional and personal life trying to do business with people where what they say is as important as what they sign their name to,” said Treasurer Folwell. “With a lack of details on this merger and little evidence that mergers like this have generated savings for the public, I feel I have a fiduciary responsibility to pursue this guarantee that will protect North Carolina taxpayers.”
Folwell asked if UNC Healthcare objected to pursuing a performance bond which is a written guarantee from a third party that ensures a certain result. The bond would be underwritten by a bank or insurance company. In this case, UNC Healthcare would purchase the bond guaranteeing healthcare costs would actually decrease as promised. If they do not, the bond would pay the state back any increased costs.
That is how you negotiate good terms for taxpayers, ladies and gentlemen.
“We have to cut $300 million in Plan expenses. We spend $450 million a year with these two hospitals. We have a $34 billion unfunded healthcare liability for retiree coverage that has been growing for 40 years. Given the fact that we are in a medical arms race, we just can’t take the chance that the combined organization will increase costs for the taxpayers of this state.”
Imagine if the whole state budget were approached in this way? This amount of dedication to protecting taxpayers is laudable and goes to show just how important electing Republicans like Folwell to the Council of State really is.
Mega-hospitals like these run billions in profits. Profits are not a bad thing, but when you’re industry is protected by state regulations that stifle competition, you deserve extra helpings of scrutiny and oversight.
To back Folwell up, the General Assembly should make an earnest attempt to reform or repeal Certificate of Need laws that give hospitals coercive monopoly powers at the expense of other healthcare providers. It is designed to keep competition away and results in higher prices and reduced healthcare access across the state.
The federal government (!) even recognized the harmful effects of these laws and repealed the national version decades ago, but North Carolina politicians have so far found the money and influence offered by the N.C. Hospital Association and their lobbyists too alluring to do the same.
I wonder how much such Big Government regulations raise costs in the State Health Plan?
For now, we’ll give credit where credit is due – Dale Folwell is the real deal, and he is just getting started.