Few details are known about a possible new venture between UNC Health Care and the organization formerly known as Carolinas HealthCare System. Now North Carolina’s Republican Treasurer Dale Folwell is asking UNC Health Care leadership for a guarantee that health care costs in the Tar Heel State will not go up under any proposed partnership.
Folwell announced Tuesday that he is asking UNC Health Care to provide the State Health Plan with a $1 billion performance bond “guaranteeing that any merger with the organization and Carolinas HealthCare System would not increase medical costs for the Plan and North Carolina taxpayers.”
UNC Health Care and Carolinas HealthCare announced last summer the intention to form a new venture. With the rollout of the proposal, leadership said they hoped a final deal would be in place by December 2017, but that date came and went with no agreed upon plan.
The UNC System Board of Governors has formed a special committee to oversee any possible deal, but members have expressed frustration at the lack of details that committee has seen. Folwell spoke about the impact of a possible merger with the Board of Governors in late January.
The overall concern has been that if the systems merge, forming one of the largest systems in the country, health care prices may go up in North Carolina. Blue Cross and Blue Shield of North Carolina, the state’s largest insurer, came out against any possible partnership.
UNC leaders have maintained that a new partnership would work toward lowering the cost of health care for North Carolinians. Margaret Spellings is the UNC System president and a member of the UNC Health Care board. She said last month that this deal would be good for North Carolinians, pointing to the distinct markets each system serves.
UNC Health Care has primarily worked in the Triangle, while Carolinas has been focused in Charlotte and points south.
Carolinas HealthCare made headlines last week when it was announced the system would change its name to Atrium Health. Atrium then announced intentions to merge with a Georgia-based health care system.
UNC Health Care said at the time discussions were ongoing with the newly named Atrium Health. After Tuesday’s announcement from Folwell, UNC Health Care released a statement:
“UNC Health Care’s goals in pursuing a proposed partnership with Atrium Health are to improve health care for all North Carolinians, increase access to care and reduce medical costs — for state employees, the underserved and all of our patients.
We are open to working with the State Treasurer on ideas to serve the health care needs of state employees at the lowest possible cost; however, we are not an insurance company. Our No. 1 job is taking care of patients. We do not control inflation or other variables associated with the cost of care.
Through our partnership, we believe we can capitalize on the strength of our two organizations to better control costs and benefit the public accordingly.”
Folwell said in a release on Tuesday:
“I’ve spent my whole professional and personal life trying to do business with people where what they say is as important as what they sign their name to. With a lack of details on this merger and little evidence that mergers like this have generated savings for the public, I feel I have a fiduciary responsibility to pursue this guarantee that will protect North Carolina taxpayers.”
Under Folwell’s proposal, UNC Health Care would take out a $1 billion performance bond to be underwritten by a bank or insurance provider. That bond would in turn pay back any cost increases incurred on behalf of the state health plan. Folwell has no authority to require UNC Health Care officials to take out the performance bond.
The state health plan, administered by Folwell’s office, provides health coverage to more than 750,000 individuals, according to a release, and spends approximately $450 million between the two hospitals.
There is no timeline for when any proposed partnership between UNC Health Care and Atrium could be finalized.
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