UNC, ECU Health changes would improve rural care, leaders say

UNC Health Southeastern hospital in Lumberton, NC. Sept. 8, 2021.

Leaders of the UNC System on Thursday praised legislative proposals that would expand the reach of the state’s two major public university-affiliated health care systems, saying the changes offer a rare chance to vastly improve medical care for people across the state — especially in rural areas.

The state Senate this session has passed legislation — both Senate Bill 743 and a budget proposal that included the same language — that supporters say would increase Chapel Hill-based UNC Health’s and Greenville-based ECU Health’s capacity to provide health care in under-served areas of the state, starting in Eastern North Carolina.

“On just about any map tracking health challenges in North Carolina — from infant mortality to insurance eligibility to food insecurity — there are dark patches across significant portions of our state,” UNC System President Peter Hans said during a meeting of the system Board of Governors Thursday. “These are the places our statewide health systems must serve.”

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The Senate’s budget proposal would provide tens of millions of dollars to the UNC System over the next two fiscal years for initiatives focused on rural health care, including training and education at each of the system’s medical schools and financial support of the system’s hospitals.

The proposals have been criticized, including by state Treasurer Dale Folwell, for provisions that would make the university health care organizations immune from state and federal antitrust laws and allow changes to their involvement in state employee benefits plans.

Health systems would be immune from antitrust laws

The proposals, as written in the legislation, would allow the two health care organizations to acquire or merge with “hospitals or any other health care facilities or health care provider, without regard to their effect on market competition.”

“Over the last five years, we have seen more consolidation of health care in the hands of fewer and fewer of these multibillion dollar corporations that disguise themselves as nonprofit,” Folwell, who has been an outspoken critic of large hospitals, told The News & Observer Thursday.

“The result of that is that it leads to lower quality, lower access and higher cost of health care,” he said.

Folwell said the proposed changes would result “in more monopolistic activity in North Carolina.”

Speaking to The N&O at Thursday’s Board of Governors meeting, UNC Health CEO Wesley Burks said the systems being immune from antitrust laws would help them “be able to serve a region of the state rather than county by county.”

“The way the laws are set up now, is that it precludes us, either individually or working together across a region, because of the antitrust issues,” Burks said.

Asked by The N&O if the health systems had plans to use the immunity to antitrust laws, Burks said the power would eventually help the systems “go into rural areas that we couldn’t right now.”

The systems will “work with the local communities to really do a needs assessment, and find out where are the right places that we want to partner, they want to partner with us to help provide that high quality care,” Burks said.

Antitrust laws are generally viewed as a way to protect competition and prevent the formation of monopolies.

ECU Health CEO Michael Waldrum told The N&O that competition in health care services and providers isn’t a large concern in Eastern North Carolina or other rural areas of the state, because access to any medical care is generally more limited than it is in more urban areas.

“People aren’t rushing in to provide health care,” Waldrum said. “This is the state’s problem.”

UNC, ECU Health would collaborate under NC Care

Under the Senate’s proposals, the two university health care systems would also “collaborate” to create a new initiative, NC Care, meant “to improve access to high quality health care for citizens and communities located in rural areas of North Carolina by establishing outcome driven regional systems of care, beginning in eastern North Carolina.”

Burks of UNC Health said NC Care would allow the health care systems to use their respective strengths to ensure “that regardless of where people live, they really get high quality health care.”

The initiative’s efforts could include creating new facilities and recruiting additional physicians and nurses to provide training in rural areas, Burks said.

Board of Governors Chair Randy Ramsey during Thursday’s board meeting called the proposed collaboration and partnership between the systems “a move in the right direction” and “a common sense solution to an enormous challenge.”

“I’m grateful for our state lawmakers working to improve access to care for all of North Carolina,” Ramsey said.

For the NC Care initiative, the Senate’s budget would give the UNC System $10 million in one-time funds in the upcoming fiscal year to allow the university health organizations to form “a clinically integrated network,” as well as $10 million in recurring funds in the 2024-2025 year to support the organizations’ community hospitals.

The Senate would also allocate the system money for additional programs meant to support and improve rural health care in the state, including $23.5 million over two years to establish a “Rural Residency Medical Education and Training Fund.” Hans said in his remarks to the board Thursday that those funds are “designed to place more doctors in high-need areas.”

Hans compared the Senate’s proposals to the “visionary” efforts that created the medical schools at UNC-Chapel Hill and ECU decades ago, as well as the larger health care organizations they later became part of, which were “much-needed efforts to bring North Carolina into the modern age of health care.”

“We have a once-in-a-generation window of opportunity to improve the health and well-being of North Carolinians on a grand scale,” Hans said, “and we must take it.”

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