As a taxpayer and leader of our region’s largest health system, I agree with our state treasurer about one thing. We both want the N.C. State Health Plan to provide value to state employees by covering their health care needs and staying on solid financial footing.
We disagree about how to get there.
State Treasurer Dale Folwell has proposed massive cuts — about $400 million worth — in what the state health plan pays health systems and hospitals across North Carolina. These cuts do nothing to address why health care costs are so high (more on that later). And for many communities, the cuts are so deep they threaten hospitals’ ability to stay open or to provide key services such as maternity care.
For Cone Health, the state treasurer’s cuts — $26 million a year to our bottom line — are just as significant. This would reduce our yearly operating margin by nearly half. That means Cone Health would have almost 50 percent fewer dollars to invest in facilities, employees and services that keep you healthy and well. Frankly, it would be a major challenge for our organization to weather such an extreme reduction.
We all know reform is needed. U.S. health care is costly and difficult to navigate — the present system is not sustainable. At Cone Health and other health networks, we have a better, proven solution that is already keeping people healthier and saving substantial health care costs. This way forward is called “value-based care.”
Here’s how it works: We agree to a budgeted amount of money to care for a certain number of people. If we provide high-quality care for less than budgeted, we share in the savings. If we spend more than budgeted, we cover the deficit. This model ensures we focus not only on those who are sick, but do all we can to keep people healthy and well. We focus on preventive care and work especially closely with people who are chronically ill to make sure they get the care they need, when and where they need it. These efforts help keep people well and reduce spending on more expensive care such as preventable visits to the emergency department and hospital stays. Value-based care is the model of care I believe all of us would prefer — a model focused on health and wellness instead of sickness.
For the last seven years, Cone Health has refined this model with more than 1,500 physicians and other providers in an accountable care organization (ACO) known as Triad HealthCare Network. Last year, this partnership saved more than $40 million while meeting stringent quality standards for the care of more than 60,000 participants. Imagine if we used this system for state employees and retirees. The state health plan would save money, plan members would enjoy better health, and health systems and doctors would be able to invest in our communities.
Blue Cross and Blue Shield of North Carolina just announced a huge initiative to bring this system to its policyholders. Cone Health and other health systems have offered to run a pilot for the state health insurance plan. Unfortunately, the state treasurer has not been willing to try our solution. I still hope he and lawmakers take us up on our offer.