3 keys to fixing healthcare in North Carolina

This article was provided by our sponsor, NC Center for Health and Democracy

On Wednesday, April 26, the North Carolina Center for Health and Democracy hosted an in-person and livestream discussion panel about the state of healthcare in North Carolina. Wendell Potter, former health insurance executive, New York Times bestselling author, and advocate for payor reform, released his new white paper, "How Do We Fix Healthcare in North Carolina?" and led a panel discussion with Dr. David McLennan, director of the Meredith Poll. The discussion took place at Meredith College and covered topics including consumer sentiments around healthcare in North Carolina, current proposals in the state legislature, and potential solutions.

A recording of the event is available to stream at nchealthanddemocracy.org

The United States healthcare system is facing significant challenges, including lack of insurance competition, a lack of governmental accountability for health insurers, and the increasing practice of regulatory capture from insurers. In the panel discussion, Dr. McLennan and Potter shared some solutions to these persistent problems facing not only North Carolina, but the rest of the country.

North Carolina needs more health insurance competition.

One of the first steps to help fix healthcare in North Carolina is diversifying health insurance options. One of four companies offering small group health insurance in North Carolina, Blue Cross Blue Shield of North Carolina (BCBSNC) is the largest health insurer in the state. According to data from Healthcare Insider, BCBSNC holds a 97% market share for private insurance. Each year, the competition keeps shrinking: Since 2011, North Carolina health insurers decreased 35%, from 31 to 11.

Dr. McLennan’s fall 2022 Meredith Poll found that more than 42% of those surveyed said their current private health insurance provider was the only option provided by their employer. In the panel discussion, Dr. McLennan encouraged employers to diversify the number of health insurance options they offer employees. The fewer the number of options, the more dissatisfaction there is among consumers over their health insurance plan, he shared. Therefore, giving employees more options could increase employee retention and satisfaction

According to Potter, a lack of competition among health insurers is one of the major reasons for high prices. Although BCBSNC and Wellcare of North Carolina are both available in over 100 counties across North Carolina, they are some of the most expensive, with BCBSNC costing $628 a month and Wellcare running $925.21. Increasing competition among health insurers, he posits, should help reduce health care prices. During the panel discussion, Potter said that the impact of competition is where state lawmakers should be looking, in terms of reforms and changes to the current model, to benefit patients, not just health insurers. "You need to look at not what is best for Blue Cross, but what is best for patients here in North Carolina. Lawmakers should be looking at what can be done to increase [competition]," said Potter.

The North Carolina Legislature and governor need to put parameters on health insurers.

BCBSNC has filed a bill with the legislature in North Carolina to transfer its assets to a new nonprofit holding company that would operate without regulatory constraints that are normally imposed by state law. According to an article by NC Health News, BCBSNC currently has $7.7 billion in asset, including $4.5 billion in reserves. The bill would allow health insurer executives to move a portion of the $4.5 billion in policyholder reserves to the holding company.

The bill is an attempt to work around North Carolina regulations by moving BCBSNC from a hospital service company designation to a holding company with fewer regulatory burdens. At the same time, the bill appears to allow the health insurer to continue its marketplace dominance in North Carolina.

Some state lawmakers are speaking out against the bill. North Carolina Insurance Commissioner Mike Causey, for instance, recently said the bill was a bad idea because the company would be deregulated. After a recent news event, Causey stood in front of a screen that read: "This bill is about corporate greed."

In the panel discussion, Potter and Dr. McLennan shared that the BCBSNC bill shows that the state legislature priorities need to be refocused on patients and access to care in North Carolina, not on maintaining market share and shuffling money around. More transparency, not less, is needed to ensure health insurer premiums and revenues are helping people—not profits.

Health insurers must undergo lobbying reform.

During the panel discussion, Potter talked about a term he called "regulatory capture," which is the revolving door between health insurers and regulatory agencies. It isn’t uncommon for health insurance leaders to leave the industry and become a state insurance commissioner or serve as a representative to insurance commissioner associations.

While this kind of movement is not unique to the healthcare industry, it should be something that state legislatures or state governors look at when it comes to the appointment of health insurance commissioners. Potter also shared that most health insurers are very aggressive when it comes to donating to political campaigns, political action committees, and helping promote lawmakers they feel should be in power. This in turn, he said, increases their influence within the market.

Consolidation as it relates to competition is also a key concern. Potter noted during the event horizontal consolidation, large insurers buying up smaller health insurers and pushing into the healthcare service space, is more common. In fact, the largest employer of physicians isn’t a hospital or health system, but Optum, a subsidiary of UnitedHealth Group, with over 80,000 physicians. With health insurers playing a bigger role as an employer and provider for out-patient services, more should be done to determine if insurers are trying to push patients toward a designated preferred provider over those of a hospital.

This article was provided by our sponsor, NC Center for Health and Democracy