by Brenée Goforth
Communications Associate, John Locke Foundation
This week, Julie Havlak reported on the latest update from N.C. Treasurer Dale Folwell on the State Health Plan. According to Havlak’s story published in Carolina Journal, Folwell has officially ended his efforts to pull large hospital conglomerates into his Clear Pricing Project:
Under the new version of the State Health Plan, hospitals will remain in the status quo, under their previous Blue Cross Blue Shield contracts. The 28,000 providers who signed onto the Clear Pricing Project will remain on it. Folwell promises to work to bring transparency to the health plan in other ways, namely bundling and lowering the cost of prescription drugs.
Over the past year, Treasurer Folwell has attempted to establish transparent pricing from hospitals for state employees by tying reimbursement rates to Medicare (most recently offering 196% of Medicare’s payments). Large hospital networks refused to sign on as network providers under the Clear Pricing Project. Havlak explains:
While the end of the year approached, state employees were left in the lurch. Many expressed concerns about paying out-of-network costs for hospital visits.
Folwell’s decision to yield to the hospitals saved the employees from these short-term concerns. But without the reforms of the Clear Pricing Project, the future of the State Health Plan remains uncertain. The plan is due to go broke in four years, and it has $35 billion in unfunded liabilities.
What comes next? Havlak writes:
[Treasurer Folwell said,] “We have learned so much about what is really going on, about the inefficiencies of the health-care system in N.C. We’re going to approach this like we approach everything else in the treasurer’s office: it’s about pennies and paperclips, and we’re going to track every one of them down.”
…Plan administrators look to the proposed advisory subcommittee of experts for guidance. But administrators say they have only three main “levers” they can use to keep the plan solvent: transparent prices, spending more taxpayer dollars, or raising premiums. Without the full Clear Pricing Project, they’ll probably rely on the last two levers.