New loan program for rural hospitals clears Senate

Senate President Pro Tem Phil Berger has pitched it as a way for hospitals with oversized and outdated facilities to right-size.

Posted 5:26 p.m. Jul 2, 2019 — Updated 6:29 p.m. Jul 2, 2019

Travis Fain

, WRAL statehouse reporter

RALEIGH, N.C. — A state-funded loan program for struggling rural hospitals easily passed the state Senate Tuesday.

Senate Bill 681 sets up a revolving fund of low-interest loans to help rural hospitals overhaul their operations, in part to make them more attractive to larger hospital groups that might want to buy them.

The measure comes from Senate President Pro Tem Phil Berger, who has pitched it as a way for hospitals with oversized and outdated facilities to right-size. The first candidate for one of these loans is likely to be Randolph Hospital in Asheboro.

The bill cleared the Senate on a unanimous vote, and it heads to the House for more discussion.

Democrats voting for the Senate Republican leader's bill said they feared it was just a Band-Aid for a much larger problem. They favor Medicaid expansion, which would give taxpayer-funded health insurance to hundreds of thousands of the state's working poor, providing new paying customers for hospitals across the state.

The proposed state budget – held up for now over a disagreement on Medicaid expansion between Gov. Roy Cooper and the GOP's legislative majority – includes $20 million for the loan program over the next two years.

Five rural North Carolina hospitals have closed since 2010, according to a staff summary attached to this legislation. Loans would be decided by the state's Local Government Commission, which already approves local government borrowing, on recommendations by UNC Health Care.

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