Paying for poor health

Maybe it was a sign of how poorly news outlets inform us or perhaps it was just because we get bombarded with so much noise, but a significant recent story failed to attract much attention. Blue Cross Blue Shield of North Carolina (BCBS), the state’s largest private health insurer reported it lost $497 million last year.

The 4.3 million BCBS customers in North Carolina, about one-third of the state’s population, know what this means: their health insurance premiums will increase.

Dr. Tunde Sotunde, CEO of BCBS, addressed the loss and spoke to the current state of our healthcare system. “Our system, as it currently exists today, practically is broken. It is too damn expensive. It is so complex, fragmented, and inefficient.”

He’s right. Almost 18 percent of this country’s gross domestic product, about one in every five dollars generated, goes towards medical goods and service. We spend 2 to 3 times what other countries spend. Even worse, the U.S. ranks last among our peer group countries in healthcare outcomes such as life expectancy, infant mortality and maternal mortality. Furthermore, our life expectancy has dropped to 76.1 years, the lowest since 1996.

The day after the Blue Cross announcement Wake Med, the private not-for-profit health provider and the one providing the most indigent care in Wake County, announced it was planning to form a “strategic combination” with Charlotte-based Atrium Health.

The reaction was loud and negative. Wake Med’s CEO, Donald Gintzig, wrote an op-ed in The News and Observer trying to justify the decision, saying Wake Med is facing “headwinds” and while it is currently in a fiscally sound operating position, “we cannot on our own fund what is needed in the long term, nor do we have the borrowing power over the next 10 to 15 years to rebuild, expand and grow to meet the evolving needs of the community,” adding that $1 billion would be needed to fund renovations to the Raleigh campus.

We’ve witnessed this consolidation trend for years. Smaller, rural community hospitals struggle to remain financially viable. According to the Sheps Center for Health Services Research at UNC, at least 11 N.C. rural hospitals have closed or converted to more restrictive services. Our state has reportedly one of the highest rates of hospital closures in the nation.

Others have opted to join larger networks. Some treasured hospitals like Mission in Asheville, Presbyterian in Charlotte, Baptist in Winston-Salem, Cone in Greensboro, and New Hanover in Wilmington have done so.

UNC, Duke and ECU’s Vidant have taken over some hospitals. Atrium, headquartered in Charlotte, operates more than 40 hospitals in North Carolina, South Carolina, Georgia and Alabama. And Novant Health, headquartered in Winston-Salem has19 hospitals and 850 healthcare providers in North and South Carolina.

What is a “strategic combination” like Atrium is proposing for Wake Med?  Is it a merger, a takeover, a sale or what? We understand that providing healthcare is expensive and growing more so all the time, but is bigger necessarily better?

Opponents of the Wake Med proposal wonder who will be making policy and operating decisions? They fear the loss of local decision-making and increased bureaucracy. The assumption is that larger entities can affect an economy of scale and operate more efficiently, but there are serious questions of this in actuality. The Atrium CEO earned more than $25 million last year. That money had to come from somewhere. Data confirms that patient costs increase and care for those without insurance suffers. And what about the quality of patient care?

Here’s my spin: We’ve watched community banks swallowed up by regional and then national financial systems. The same is true with the media, transportation and travel, retail, construction and other sectors. Experience demonstrates that bigger is not necessarily better. We lose the sense of community and local participation once enjoyed.

It’s time to call a time out! Our healthcare system is spiraling out of control and is well on the way to bankrupting insurance companies, care providers, and you and me. None of the players in this escalating healthcare Armageddon seem willing to sit and agree on needed changes - especially decisions which involve them conceding any of their piece of the pie.

Instead of losing our local hospital identities we should be exploring ways to strengthen them. For instance, insurance companies complain about dealing inflexible large care provider networks, yet they provide reimbursements to them greater than those given to independent hospitals. The same is true with other vendors and suppliers. If ALL hospitals had the same costs and the same reimbursements community hospitals could be more viable.

Until such time as the healthcare players can conclusively demonstrate how you and I benefit from proposals such as the Atrium-Wake Med combination it is time to pause further actions.

We need healthcare solutions, not necessarily larger and more complex entities.

We are tired of paying so much for poor health.

Tom Campbell is a Hall of Fame North Carolina broadcaster and columnist who has covered North Carolina public policy issues since 1965.  Contact him at tomcamp@ncspin.com