Peeling the healthcare onion

by Tom Campbell, Producer and Moderator of NC SPIN, September 6, 2018.

State Treasurer Dale Folwell administers the State Health Plan, the largest in our state. Folwell believes his office should know what various procedures cost his 700,000 present and retired state employees, so he sent a request to UNC Health Care, the largest healthcare provider to the plan, asking them to outline their charges in their 13 hospitals, various clinics and medical practices. He told us the state plan spends almost $270 million each year with UNC and his intent was to make sure participants were paying what they were supposed to be charged.  

Folwell got back about 100 pages outlining the contract UNC has with Blue Cross, the third-party payer the state plan employs. The document was so heavily redacted as to be completely unusable in ascertaining healthcare costs. UNC explained this is proprietary information between insurance companies and care providers and is confidential. Folwell’s press office immediately responded by composing a fake news release to UNC that itself was so heavily redacted as to be virtually unintelligible. Who says accountants have no sense of humor?

But Treasurer Folwell is correct both in requesting and expecting to know what UNC and all other providers charge the State Health Plan. Transparency in pricing is important in making informed choices. But as anyone who has ever studied our complicated public-private healthcare system has learned, finding healthcare solutions is like peeling an onion. One layer reveals another that needs unwrapping.

In 2014, the latest year for which we found figures, North Carolina spent $72 billion or 15 percent of our state’s GDP on healthcare. The $7,300 per person is a lot, but the really bad news is that the personal finance website, WalletHub, ranks North Carolina the 5^thworst state in the nation for healthcare.

We certainly don’t want to start price wars that might result in shortcuts to quality care, but there are some steps we can take to improve our health and reduce healthcare costs. North Carolina should significantly reduce or eliminate our certificate of need (CON) laws that restrict competition. As we said, each peeling can reveal another layer. Higher cost providers are generally hospitals, required by law to treat anyone who comes to their door regardless of whether they can afford treatment. While reforming CON we need to take care to prevent hospitals, especially in smaller communities, from going broke.

We can make health insurance premiums more competitive by removing barriers to out of state competition, reducing mandates to insurers and introducing reasonable tort reforms that could reduce unnecessary testing and lower malpractice insurance rates.  We could also insist on generic prescription drugs and shop for lowest prices.

But the biggest step is for each of us to consciously work on getting healthier. Obesity, high blood pressure and diabetes rates are extraordinarily high in our state and one in five still smoke. Better eating choices and more exercise not only save money but also results in healthier, happier and longer lives.

Back to Treasurer Folwell, he makes a valid point. Each of us should become more proactive by always asking the costs of procedures and tests, additionally inquiring as to whether each test is necessary. Healthcare is the one sector of our lives where we never know what something costs until we get the bill.

We’ve got to be willing to peel a few onions.