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The Charlotte Observer had an article yesterday about the nonprofit public hospital system Carolinas Health Care cutting $110 million from its budget next year, largely in management positions that are currently vacant.

The large hospital system cited the need for cuts as stemming from decisions by both North Carolina and South Carolina politicians to turn down federal Medicaid expansion dollars, as well as other decisions made at the state and federal level related to Medicaid and Medicare. The $4 billion hospital system — which operates 40 hospitals in the Carolinas and Georgia — says it’s been left treating large numbers of poor patients unable to access health insurance or pay their health bills.

North Carolina is one of 21 states to opt out of the Medicaid expansion, which would provide health care for an estimated 400,000 low-income North Carolinians who are currently uninsured. (Click here for updated list of where different states stand on expansion).

From the Observer article:

[Carolinas HealthCare CEO Michael} Tarwater blamed much of the financial stress on cutbacks in state and federal programs. For example, he said North Carolina legislators have for a second year declined to accept federal funds to expand Medicaid. That contributed to the system’s unreimbursed charges, which rose to $668 million in the first half of this year, an increase of 9.4 percent over last year.

“We’re not treating this as a crisis … but it is a challenge,” Tarwater said. “I can assure you we have a solid plan, and we have the team in place to carry it out. I’m certain that we’ll emerge stronger and more competitive.”

 

You can read the entire article here.

News

The head of North Carolina’s troubled health and human services department told lawmakers Tuesday that moving the Medicaid program out from under her purview to a stand-alone agency would “be against common sense.”

“Absolutely not,” said N.C. Health and Human Services Secretary Aldona Wos in a response to a question about whether moving the $13 billion Medicaid outside of her domain would make things easier on the agency.

“To separate parts of [DHHS functions] out to the department will actually go backwards,” she said.

DHHS Sec. Aldona Wos

DHHS Sec. Aldona Wos

Wos made her comments Tuesday at a legislative oversight committee hearing. It also comes as lawmakers consider whether to embark next year on an ambitious plan by Senate Republicans to move the state’s Medicaid program to a standalone agency reporting jointly to the governor and state lawmakers.

A special program evaluation committee recently formed to consider different scenarios for Medicaid, an entitlement program that provides health care for the poor seniors, children and disabled residents, is funded through a mix of federal and state dollars.

Lawmakers have for years voiced frustration with faulty budget forecasts and unexpected cost overruns within the Medicaid program. Several Republican politicians — including legislative leaders and Gov. Pat McCrory — have held up the forecasting roblems as reason why North Carolina should not expand its Medicaid program, a move that would tap federal money to provide healthcare for an estimated 400,000 North Carolinians unable to afford their own insurance.

Wos, a Greensboro physician and wealthy Republican fundraiser appointed by McCrory to lead the state’s largest agency in January 2013, had plenty of other tough topics to cover with Tuesday’s legislative oversight committee. The tense reception has become a routine scenario for Wos as she’s grappled with negative coverage over high-dollar personal contracts and raises for close associates, as well as major disruptions in the state’s Medicaid billing and food stamp dispersal systems.

On Tuesday, Wos and her staff faced questions about a $6.8 million no-bid contract given to a consulting firm Alvarez & Marshal to advise and manage the Medicaid program.

Wos told lawmakers that she needed to hire the firm because she didn’t have any staff able to manage the program properly as she and other agency staff were developing a comprehensive Medicaid reform plan.

“We had an emergency,” Wos said. “We had to figure out how to get our daily work done.”

State law requires most contracts to go through a bidding process, in order to keep costs down and to allow for competition in lucrative contracts. Wos credited the consulting firm’s work with allowing the Medicaid program to meet its budget this year, and return $63 million to the state’s general fund.

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Commentary
Cover me

Image: NC AIDS Action Network – www.ncaan.org

A new report from the Pew Charitable Trusts makes clearer than ever just how mean-spirited and morally bankrupt the decision of state lawmakers and Governor McCrory to turn down federally-funded Medicaid coverage for hundreds of thousands of  low-income North Carolinians is turning out to be. The report, “Southern States Are Now Epicenter of HIV/AIDS in the U.S.” tells the story of a woman from New York named Deadra Malloy who had successfully managed her HIV infection for decades while living in New York where public subsidies made medication affordable. When she moved to North Carolina and then South Carolina, however, all that changed. Soon she was skimping on necessary drugs and quickly wound up in the hospital with pneumonia.

As the story notes, the woman’s case is sadly typical:  Read More

Commentary

Medicaid expansionOur old NC Policy Watch colleague Adam Searing had a great post last week on the Georgetown University Health Policy Institute blog, Say Ahhh! that explains why Medicaid expansion is fast reaching the tipping point as states that once said “no” are now seeing the light. Let’s hope North Carolina come to their sense soon.

It’s getting harder and harder for Governors to say no to the great deal being offered to them through the Medicaid expansion option.  Just last week Pennsylvania reached agreement with the federal government on a Medicaid expansion waiver and news stories show possible movement in Wyoming, Utah and Tennessee.

This new momentum forward shows that more state leaders are willing to stand up to those with intransigent ideological views to find a common sense approach towards managing their state’s finances and health care system.  Three factors are driving the change:

Hard Numbers

Before January 1, 2014 – the first day states that accepted the federal Medicaid expansion could open their programs – the costs of not doing so were largely theoretical.  Now that a growing majority of states have expanded coverage, the choice on Medicaid is no longer a hazy public policy debate but one where hard numbers on the cost of not expanding coverage are now available between the states that expanded coverage and those that have not. Read More

Commentary

Medicaid expansionIn case you missed it, be sure to check out this story in the Charlotte Observer by Ann Doss Helms and Tony Pugh about North Carolina’s ongoing and self-destructive refusal to accept federal dollars to expand Medicaid to hundreds of thousands of North Carolinians in need. As the Helms and Pugh report:

North Carolina taxpayers could spend more than $10 billion by 2022 to provide medical care for low-income residents of other states while getting nothing in return, a McClatchy Newspapers analysis shows.

The Affordable Care Act tried to expand Medicaid to millions of low-income, uninsured adults. But many Republican-led states, including both Carolinas, opted out of the plan championed by President Barack Obama.

If the 23 states still rejecting Medicaid expansion stick with that decision, they’ll contribute $152 billion over 10 years to states that take the federal money, the analysis shows. North Carolina would be one of the top five contributors.

In other words, because of the refusal by Gov. McCrory, House Speaker Tillis and Senate President Pro Tem Berger to expand Medicaid, North Carolina is contributing to the utterly nonsensical situation in which it and other poorer states are subsidizing the provision of health care to low income people in wealthier states that have already expanded Medicaid.

The article also cites a pair of business economy experts for the proposition that the failure to expand is holding back the state’s economy: Read More