Dale Folwell, North Carolina’s Treasurer, recently commissioned and endorsed the findings of a one-sided, short-sighted report. Its title, ‘North Carolina Hospital Systems Enjoyed Record Profits During Pandemic,’ smells of click-bait.
It’s curious that Folwell — who claims to be a neutral party without an agenda, by the way — is so strongly against health systems. It becomes less curious when you realize just how much of the Treasurer’s campaign contributions come from BCBSNC, the state’s largest insurance company.
In true Un-covered fashion, we’ve outlined some of Folwell’s boldest claims, along with some our own counterpoints. Because his report is not only factually flawed, but also biased against the health systems that sacrifice more than just their finances to shepherd North Carolinians to brighter, healthier days.
Point #1: Large North Carolina health systems accepted a combined $3.1 billion in provider relief funds (PRF) and Medicare Accelerated and Advanced payments (MAAP) to line their pockets.
Yes, and: Health systems shouldered a significant responsibility for protecting and treating their communities in a time of rampant misinformation regarding the virus. While doing so, hospitals also had to halt normal daily clinical procedures and faced significant staffing and supply chain challenges (both of which they continue to face). Need we also add that over the last several years, health insurance companies made access to COVID-related services anything but easy. Insurers are becoming increasingly aggressive, and their aggression limits access to care.
The Provider Relief Funds (PRF) were necessary to ensure continued access to care for North Carolinians. Importantly, unused relief funds, including Medicare Accelerated and Advanced payments must be paid back; therefore, they are not profit.
Point #2: Health systems think lower operating costs are an indicator of needing PRF, yet they have millions in reserves.
Not exactly. For health systems, reserves are critical to weather financial downturns like we saw in 2022. It allows systems to maintain access and services when the cost of supplies and labor increase (just like we’ve seen these last few months). Remember that hospitals must stay fully staffed for any patient or prognosis that walks through their door, 24/7.
BCBSNC, the dominant insurer in North Carolina with well over half the market share, reported profits of nearly $570 million in 2021, and yet Folwell’s report does nothing to hold them accountable to the same standards it sets for providers.
Point #3: The misalignment of COVID relief dollars caused mass consolidation of small hospitals and independent providers by large health systems.
Payors left no other option. Even well before the pandemic, eight rural hospitals in North Carolina were forced to close their doors between 2012 and 2019. We’ve been saying it for a while now: Hospital consolidation is a result of unsustainable payor rates. There’s no “hidden agenda.” They couldn’t sustain unfair reimbursement rates from both commercial and government payors. If anything, COVID relief dollars allowed some rural facilities to stay open to serve their community — even if only a while longer than they otherwise would have.
Because of this, larger health systems have stepped in to help underperforming, financially unstable hospitals — all while mitigating insufficient supplies, burnout, and delayed care to ensure people living in rural areas continue to receive the care they need, when they need it.
We could keep going.
As companies like BCBSNC continue to raise premiums, they are, simultaneously, demanding sharp rate cuts to North Carolina health systems and providers, which are exploring every option to keep doors open for patients. Folwell’s claims are not just erroneous but are directly harming North Carolinian’s ability to access care by not holding payors accountable.