WILMINGTON — This week the Save Our Hospital organization held a public meeting, which packed the Northeast Branch of the New Hanover County Library.
The event featured an introduction by Save Our Hospital founder Gene Merritt, an outspoken critic of the sale exploration process undertaken by New Hanover County and New Hanover Regional Medical Center (NHRMC). The three main speakers were North Carolina State Treasurer Dale Folwell, Duke University business professor Barak Richman, and Renaissance Wilmington Foundation President and CEO William P. Graham.
NC Treasurer Dale Folwell
Folwell has been critical of the sale exploration, but also of NHRMC’s decision not to participate in his ‘Clear Pricing’ program. The program would set public pricing based on the current Medicare reimbursement rates for over 700,000 people covered by the State Employees Health Plan (SHP). Folwell said he met with the NHRMC Board of Trustees and felt the hospital was “on board with the idea,” of what SHP calls “reference-based pricing” but later backed out — despite what Folwell claimed would have been “millions in dollars in increased revenue” for NHRMC.
NHRMC spokesperson Carolyn Fisher said the hospital could not discuss the current rates negotiated with Blue Cross Blue Shield North Carolina (BCBSNC) for SEHP members because the contract is confidential as part of BCBSNC’s contract. However, she noted that Folwell’s claim “could only be true if NHRMC’s reimbursement rates were lower than the rates being paid to other health systems under the State Employees Health Plan.”
It’s also worth noting that a recent commercial paid for by the State Employees Association of North Carolina (SEANC), which has backed Folwell’s bid for reelection as State Treasurer, alleged that “non-profit hospitals like New Hanover use secret contracts to bill [SHP members] up to 900 percent more than Medicare.” (The commercial first ran on Facebook from December 23, 2019 to January 17, 2020, according to Facebook’s ad library resource — a more recent version adds the claim that NHRMC makes “five times” the national average profit margin.)
A spokesperson for SEANC identified several sources for the claim, which all led back to conversations with Folwell or an October 22, 2018 meeting of the SHP Board of Trustees. During that meeting, a discussion of what would become Folwell’s Clear Pricing Project noted “provider reimbursement rates currently range from below Medicare to over 1000% of Medicare rates.” However, NHRMC is not specifically mentioned in the meeting minutes or materials.
The claim seems to run directly contrary to Folwell’s statement that NRHMC could be making more under his plan, which would reimburse NHRMC at around 177 percent of Medicare. Without a clear look at what NHRMC actually charges and is reimbursed for services, information that is largely protected by confidential contracts with insurance companies, it remains difficult to fully analyze.
Fisher said NHRMC chose not to join Falwell’s plan because of long-term uncertainties.
“NHRMC chose not to participate in the plan because it is based on reference-pricing, which ties directly to Medicare rates. In the short-term, it may not have been a problem for us financially, but there was no way to determine how that reference point would be changed or impact us longer term. Instead, we support value-based contracts which tie reimbursements to specific goals for reducing costs while improving outcomes,” she said.
Barak Richman
In an interview in late August, Richman told Port City Daily it was his experience that hospital mergers and acquisitions did not lead to decreased costs.
“The mergers always begin with these grand promises — and there is virtually no evidence that those promises are kept with any certainty,” Richman said.
Richman added that the county’s ability to steer the fate of the hospital after a deal would depend largely on which entity bought or partnered with NHRMC — and how the county handled the RFP process. Richman noted that mergers or acquisitions can stabilize a failing hospital, but the benefits for a thriving hospital were unclear.
“That said, it’s my understanding that your hospital is a good hospital, and financially successful. If the hospital and the county and the people are happy with the way things are — then I think it’s hard to imagine a scenario in which they are happier after a sale,” Richman said.
Bill Graham
President and CEO of Renaissance Wilmington Foundation also spoke about his concerns about the sale process and the current state of healthcare.
More info
You can find more information about this week’s Save Our Hospital event, including the Facebook Live feed, which featured questions from the audience here. The page also has links to other materials from the organization.
Information on Partnership Advisory Group (PAG), which is guiding the sale process, including past meetings, including presentations, documents, minutes, and streamable meeting audio can be found here. Future meeting locations, times, and dates can be found here.
Information about the PAG members can be found here, and the group as a whole can be contacted at PAGcomments@NHgov.com.
Send comments and tips to Benjamin Schachtman at ben@localvoicemedia.com, @pcdben on Twitter, and (910) 538-2001
