A proposal to revamp the state’s employee health care plan would have an adverse affect on access to health care and endanger the viability of hospitals, especially in rural North Carolina, said Cody Hand of the North Carolina Healthcare Association.
Hand and Wayne UNC Health Care President and CEO Janie Jaberg used their time during a Thursday afternoon program on health care issues to lobby against the change, as well as a proposal to eliminate certificates of need.
Chuck Stone, president of the State Employees Association, who was in the audience, challenged Hand’s assertions while state Sen. Jim Perry, R-District 7, said it was time for the barbs and darts from both sides to stop in order to focus on what needs to be done.
The program, held at the Goldsboro Event Center, was sponsored by the Wayne County Chamber of Commerce.
State Treasurer Dale Folwell oversees the State Health Plan that covers about 740,000 state employees and is funded by General Assembly, Hand said.
In about three or four years, if the plan remains funded at the same level, it will not be adequately funded to meet its needs, he said.
“We don’t dispute that,” he said. “We agree with the treasurer. What he has done to address it is where we start to fall away. He has decided that instead of paying the Blue Cross rate . . . he wants to set our prices based on Medicare rates with an adjustment up.
“Right now, we would be starting at Medicare plus 77 percent. It may sound lucrative to some that we won’t just get Medicare rates but that we will get an addition to that.”
The problem is that Medicare does not pay the cost of care, he said.
It is a rate that cannot be negotiated, Hand said.
The problem is the health plan continues to operate on a 1990s fee for services model, he said.
“Which means that every time you go to a doctor, every time you go to a hospital, it is a different bill and a different payment regardless of what has happened with that patient in the past,” Hand said.
Other plans, including Medicare and Medicaid, are moving to a system where they pay for an entire episode in one payment, he said.
“What that does is that it incentivizes us that if they are in our emergency department, to call them when they get out and say, ‘I have a doctor lined up for you to go see to make sure that you don’t wind up back and see us,’” he said. “It gets them into primary care. It gets them into preventative care and maintenance.”
Stone, a former member of the State Health Plan board of trustees, said he has studied the plan since it became self-funded in 1982.
Stone said he agrees with Hand about the importance of access to health care, which is an issue for everyone who lives in eastern North Carolina.
“Where we disagree and part company is that when you get down to the State Health Plan, on average, we pay 216 percent of the Medicare rates,” Stone said. “The State Health Plan has been overpaying the actual cost of treatment for those covered by the State Health Plan.
“Value-based and similar designs, which Cody has made reference to, has a one-payment model. Before you implement value-based incentive design, you need to do what the state treasurer and the State Health Plan board of trustees have proposed — that is pay the Medicare rate plus a very substantial profit margin that would probably guarantee a 60 to 70 percent profit margin to the hospitals.”
That keeps them in business until a further study can be completed, he said.
The plan proposed by the State Health Plan board of trustees would save taxpayers $257 million in the coming year, Stone said.
It also would save state employees and the health plan almost $52 million and ensure the state’s unfunded liability would not increase.
“So, there are two sides to this story,” he said.
Jaberg said the treasurer’s plan would mean a loss of $9.5 million in funding for the hospital and result in a greater lack of access to doctors.
The hospital has recruited 21 physicians over the past 19 months and is looking at another 22.
If the plan is approved, that will stop, she said.
It would also result in the potential reduction in key services, increase health risks and place a greater financial burden on already struggling families, Jaberg said.
The plan would, she said, have a negative affect on the local economy and its viability.
Jaberg also expressed concerns about discussions concerning the repeal of the Certificate of Need — the state law that prohibits health care providers from “acquiring, replacing or adding to their facilities and equipment, except in specified circumstances, without the prior approval of the Department of Health and Human Services.”
Repealing the Certificate of Need would focus health care resources and dollars in urban areas and increase health care costs, Jaberg said.
It also is a threat to access to already limited resources, providers and clinicians, and the hospital would need to evaluate the services it offers, she said.
Improvements can be made to the Certificate of Need process, but it needs to remain in place, Jaberg said.
“Your community hospital needs your voice to educate and advocate,” she said. “We need your voice, just like you need us. Share your stories of what Wayne UNC means to you and your community — access to health care, physicians, services, economic impact, jobs, supporting our local businesses, community stability, attracting new talent and growth.”