Folwell: UNCHealth-Carolinas merger will jack up health care costs

We expressed our reservations earlier about the proposed merger between Charlottes’ Carolinas HealthCare and UNC Health Care.  Now, state treasurer Dale Folwell is getting in on the act:

Officials who represent about 800,000 state retirees and employees say they are worried those workers could end up paying more for medical services if UNC Health Care joins forces with Atrium Health, the Charlotte company that last week rebranded itself from Carolinas HealthCare.

NC Treasurer Dale Folwell and Robert Broome, executive director of the State Employees Association of North Carolina, met with UNC Health Care CEO William Roper and his executive team last week. Folwell oversees the State Health Plan, which provides health benefits to 750,000 state employees, retirees and teachers.

Folwell said he has a constitutional and fiduciary duty to bring down the health plan’s annual costs, hence his keen interest in any clues UNC Health Care offers about how their partnership with Atrium would work. The State Health Plan is administered by Blue Cross and Blue Shield of North Carolina which has come out against the deal, saying it would lead to higher health care costs. […]

Folwell said last week’s meeting gave him few answers.

“I don’t know whether to take their subdued demeanor as a rope-a-dope, or if they’re concerned and frustrated about where they are,” Folwell said. “When we kept asking questions, they said those details hadn’t been worked out. And, you know, when you say that often enough, I guess you start thinking about where you are.” […]

Folwell said UNC Health Care owes about $2.5 billion in tax-exempt bonds and other debt, and the institutional investors who lent the money will demand updates about the status of their loans.

“We have endorsed this debt with the full faith and credit of the state,” Folwell said. “And if somebody else is going to be responsible for this debt – New Co., or whatever you’re calling this thing – then we need to know how it impacts the things we gave our thumbs up to.”

Health care cost increases also trouble Folwell. He said the State Health Plan is UNC’s single biggest customer, and health care costs have been rising for years. Despite promises that the deal will benefit North Carolina, Folwell remains unconvinced that a UNC partnership with Atrium will drive down costs.

“These entities are already of the size that they’re not going to get increased economies of scale on sheets, sutures, syringes or anything else that starts with a S, or A through Z,” Folwell said. “I know what they’ve said, but the fact is this is not a situation where I can rely on what somebody tells me as being more important than what they sign their name to.”