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Experts weigh in on the state of North Carolina’s healthcare industry
North Carolina’s healthcare industry is a point of pride. From teaching hospitals to world-class health systems that keep growing, residents have access to some of the world’s best healthcare. That doesn’t mean everything is perfect. Federal and state policy changes have the potential to reduce care options and eliminate coverage for some residents. More healthcare workers are needed. And many North Carolinians need to see a primary care physician more often, a big step toward lowering healthcare costs. Business North Carolina recently gathered industry leaders to recount the state’s healthcare successes and discuss its challenges and their potential cures. Their conversation was moderated by David Woronoff, president of Old North State Publications, which owns BNC. The transcript was edited for brevity and clarity.
The discussion was sponsored by:
• Academy of Family Physicians
• CarolinaEast Health System
• Gallagher
• North Carolina Healthcare Association
• Poyner Spruill
WHAT’S THE STATE OF NORTH CAROLINA’S HEALTHCARE INDUSTRY?
BLAGG: Certain portions are seeing rapid growth. Over the years, health systems consolidated, but there are some physicians and mid-levels looking for something a bit different. There are more entrepreneurial physicians.
GRIGGS: There are many political unknowns at the federal and state levels, particularly with Medicaid and Medicare funding. I don’t think many North Carolinians understand the importance of Medicaid and Medicare funding. There are funding cuts to academic institutions through the National Institutes of Health. North Carolina has some of the world’s best healthcare institutions. They’re big drivers of the state’s economy. We need more family and primary care physicians to keep people healthy.
Medicaid expansion has benefited 670,000 North Carolinians. Their coverage is at risk. In the expansion’s first year, there were 27% fewer ER visits for opioid overdoses and 29% fewer for opioid overdose deaths, because these folks have healthcare. They’re receiving Suboxone, which controls opioid-use disorder. We must keep these people
in care.
PAULIN: I look at it from an employee benefits perspective. We keep our finger on the pulse of new and unique products that are being introduced. Health systems are becoming integral parts of different carrier solutions.
SMITH: I see healthcare in two pieces — urban and rural. Healthcare in Charlotte or the Triangle is different than in rural communities. Healthcare is fragile right now.
Medicare, Medicaid and TriCare are about 80% of our total. We depend on them. It’s going to be a struggle. Cut directed payments and others for systems like ours and it will be a hardship, not only for our 3,200 employees but for patients, too. If you have a heart attack in Carteret County, we’re your first stop. If we can’t provide that care, whether an interventional catheter lab or open-heart surgery, then you must go one more hour to Greenville. Time is important.
DOBSON: While we’re trying to drive down healthcare prices and address workforce challenges, there’s a lot of good when it comes to North Carolina healthcare. I represented three rural western North Carolina counties in the N.C. General Assembly. My mission was preserving and protecting the good things we have, including public education and healthcare.
Healthcare is many rural communities’ economic anchor. It provides jobs and benefits. It’s part of who we are as North Carolina. We have great hospitals and providers in rural and urban communities. That includes teaching institutions such as Duke, UNC and Atrium. When people across the country get sick, they come to North Carolina to access them.
The recently passed Medicaid cuts put a lot at risk. About 670,000 North Carolinians potentially could lose their healthcare coverage. About $6 billion is at stake for NCHA members. Many are already on the margins when it comes to reimbursement rates.
The Affordable Care Act’s enhanced subsidies expire at year’s end. I’ve been tasked to ask Congress to extend them, because individuals receiving them will lose their healthcare otherwise. So, it’s not only the Medicaid population that’s at risk. A lot needs to be preserved and protected.
HOW CAN BUSINESSES HELP THEIR EMPLOYEES BECOME HEALTHIER?
GRIGGS: It can seem like we have a sick-care system, not a healthcare system. We have the best places in the world to go if you get sick. But prevention deserves more investment. That’s where we’ve missed out. Most industrialized countries invest 12% to 15% of their healthcare dollars in primary care and prevention; the United States invests 5% to 6%. Healthcare costs are lower in most other countries. That isn’t the only factor, but it’s a factor.
If I have a heart attack, I want a great interventional cardiologist. But I’d rather skip the heart attack. The best heart-attack prevention is receiving care earlier and more frequently. Adults with a primary care physician have 33% lower healthcare costs than
those without.
Many North Carolinians have chronic diseases such as diabetes and hypertension. We must get that under control. The state’s Department of Health and Human Services Secretary, Dr. Devdutta Sangvai, previously led Duke Population Health Management Office. He said the best thing it did for high-cost patients was scheduling four primary care visits instead of three every year. That lowered costs. We can conquer healthcare costs if we get people into care early and regularly. If they don’t receive primary care, they’ll land in the ER, the most expensive place to receive care.
BLAGG: Value-based care is pushing us in that direction. The value-based safe harbors and their anti-kickback rules let us be creative about what kind of value-based enterprises we can create that will improve outcomes.
PAULIN: It starts with having conversations with employers. We need new and creative ways to get people to see a doctor, such as incentivizing wellness programs that encourage routine physicals and preventive care such as cancer screenings. That might mean bringing primary care to them.
DOBSON: We don’t always need to reinvent the wheel. We can double down on certain initiatives such as onsite workout centers, which offer employees the chance to get healthy, or programs, such as we have for the state of North Carolina, that reduce your insurance cost if you don’t smoke.
HOW IS ARTIFICIAL INTELLIGENCE IMPACTING HEALTHCARE?
BLAGG: AI’s long-term impact will be positive, though we’re a long way from that point. AI Scribes, for example, capture physician visits, freeing your physician to look you in the eye and not at a computer. It helps answer emails. It also has the potential to find anomalies within data and solve big problems.
But there’s a lack of trust in AI. What’s in that black box? How does it churn out answers? So, physicians still review and sign off on all AI-generated notes, and they review the communications it writes before they’re sent. Data-use restrictions create hurdles. So, AI is a tool that decreases the burden but not in total.
GRIGGS: Primary care physicians see many patients every day, so they often must finish their notes and documentation after hours. WAC — work after clinic — steals time from spouses, children and families. It’s causing burnout. AI Scribes can help with that, allowing physicians to finish work sooner, so they can go home and concentrate on something else.
We won’t educate our way out of the primary care doctor shortage quickly, so we must be creative about it. AI can improve access. Less paperwork can mean a physician is able to see one or two more patients each day. We lose physicians who’ve had it with the paperwork every day.
AI is a double-edged sword. We don’t want insurance companies using it to deny coverage. We already have issues with prior authorizations. We want human beings making clinical decisions. Legislation prohibiting insurance companies from using it solely to make those determinations was introduced
this year.
SMITH: If a radiologist is focused on one part of an image, AI can look at all of it indiscriminately. That has helped with table times, allowing more people to be scanned and get more of them treated.
PAULIN: If you were diagnosed with a chronic condition, for example, AI can monitor your treatment. We’re starting to see it identify and bring attention to missed medications and appointments, whether with a primary care doctor or specialist.
WHAT OTHER TECHNOLOGIES ARE SHAPING HEALTHCARE?
GRIGGS: Doctors will ask patients to bring their medications to their office visit. But how often is there follow through? Doctors can ask patients at home, especially older ones, to get their medications during telehealth visits. Then they can see where patients are at in their prescriptions, ensuring they’re following orders and keeping chronic conditions under control. Telehealth doesn’t replace in-person care, but it’s a great supplement.
PAULIN: Telehealth is here to stay. The mental health component has become critical over the past four or five years. It’s expanding as it’s added into existing health plans.
BLAGG: One challenge is wearables. Almost everyone has a fitness tracker or cardiology device. They bring them to their physician visits and turn over the data. What do physicians do with it? They don’t have 30 minutes to digest it. There’s a lack of training on what they can do with it and the applications that can help process it. If your patient presents it, you have to review it. If a problem goes undiagnosed, that’s
an issue.
HOW IS THE INDUSTRY DEALING WITH WORKFORCE SHORTAGES?
SMITH: We’re New Bern’s largest employer and Craven County’s second-largest behind Marine Corps Air Station Cherry Point. While workforce is always a challenge, things are improving. We have about a third of the travelers — temporary workers whose rate of pay is higher than permanent workers and don’t receive benefits — than three years ago. We have 10 traveling certified registered nurse anesthetists, for example, and pay them $250 to $300 an hour. That’s more than a family physician or anesthesiologist can make. Our government payers don’t care if we’re paying someone $50 an hour or $300 an hour. We must absorb that cost.
We built an alliance with Craven Community College. It has doubled the number of nurses that it’s able to train and graduate during the last three years. That has helped us, private practices and nearby health systems. We also helped set up hospital rooms and operating rooms, so the college can teach students interested in environmental services or housekeeping jobs. Those students are taught our standards, so they understand the job’s requirements. They can decide it isn’t for them before we invest in onboarding. The college also does that with food service and other hard to fill positions.
DOBSON: We must change the narrative around success, reassuring our middle and high school students that it’s OK if you don’t go to a four-year school. Does it make sense to attend a private school, racking up debt for a degree that may or may not be helpful in meeting that financial responsibility? Or does it make more sense to look at the trades, including healthcare? If we do that long term, then we’ll mitigate some of the state’s workforce challenges.
My daughter is starting her second year at McDowell Technical Community College. She’ll leave with a nursing degree, no debt and the possibility of a $75,000 a year job. She can work almost anywhere she wants because of demand and need.
BLAGG: Every New Hanover County seventh-grader attends career exploration class. They don’t think about being a radiology technician, for example, and that’s a workforce that’s needed. If we don’t start young, exposing them to all these wonderful careers, then we’re too late.
I’m a second-career attorney. I had 3-year-old twins when I went to law school, so I needed childcare. Some counties identify childcare as an obstacle to workforce training, especially for people in their 30s and 40s. Many community colleges are offering it in response. I love that they’re helping people return to the workforce in a different career.
PAULIN: When hiring is competitive and an edge is needed, the employee benefits offered usually cost the employer more. The name of the game is to attract and retain talent. You need to decide what to offer to target the workers you need.
GRIGGS: Every level of healthcare, from technicians to nurses to physicians, has a workforce challenge. We need more people to go into family medicine, general internal medicine and general pediatrics. Primary care should be a public utility in our state.
Medical schools need to enroll more rural students, who are more willing to work in rural communities. Give first-year med students primary care experience in rural and underserved communities, getting them excited about that work, and you buffer their desire to go for those higher-paying subspecialties. We’re doing a program that places about 15 medical students with primary care physicians working in rural communities. We partner with others, getting these students interested in family medicine and getting them to communities where they are
really needed.
North Carolina needs the right specialists in the right places. It’s an economic imperative, though it’s not seen that way. Apple comes to the Triangle, for example, and it gets incentives. Department of Commerce isn’t distributing them for putting a primary care office in a rural community. We must start thinking about it that way. One family physician brings $2 million worth of annual economic benefit to a rural community. And if you don’t have family medicine in your community, you won’t attract other businesses.
WHAT ARE HEALTHCARE CONSOLIDATION’S BENEFITS AND CHALLENGES?
SMITH: There are two types of consolidation: Physician groups join health systems, and health systems join larger systems. We were affiliated with UNC Health for about two years. It started with good intentions, but it didn’t end up working for either party. Consolidation can help, but it can pull, too. The perfect scenario is when
care is pushed to systems capable of handling it.
Shared services is where small hospitals and health systems get their shoes a little tight. While it’s designed to spread cost, it becomes a profit center for some bigger systems. So, when they profit, it means that the dollar is coming out of the systems, and there’s the push and pull.
Consolidation is about the only way to sustain rural healthcare. While some physician groups are beginning to understand that the private practice model works for them for autonomy and other reasons, they usually show up at the health system level for economic reasons. Health systems lose money on them. And it’s not a small amount when they absorb all that infrastructure.
BLAGG: Primary care physicians can do great things when acting as a patient’s quarterback within a health system. Referrals, for example, are usually faster. But there are challenges. Some patients feel choices are limited. And some healthcare workers complain about power dynamics, not getting enough say in the organization. Some health systems do it better than others.
It’s good to see some entrepreneurial physicians creating options such as direct primary care. It’s a balancing act. But healthcare in some communities, especially rural ones, needs consolidation to survive.
GRIGGS: More than 50% of my members work for a major health system. The balance works elsewhere such as a federally qualified health center, rural health clinic or a health department’s primary care. And there’s still a good infrastructure of independent practices.
One thing that hampers independent practices is electronic health records. Epic is becoming the preferred EHR with health systems, but independent practices either can’t afford it or get it. Some independent clinically integrated networks are helping by consolidating data, dealing with 40 or 50 different EHRs. If we can get the state’s health information exchange — NC HealthConnex — right, and it’s getting there, the flow of information will increase. Some health systems are allowing independent primary care more access to their EHRs. If they don’t have Epic, for example, they’re
offered logons.
Independents have a say in their practice. They have no say with an insurance company. They’re paid about a third less than a practice associated with a health system. If insurance companies don’t like consolidation, they should pay their independents.
WHICH STATE AND FEDERAL POLICY CHANGES IS THE INDUSTRY WATCHING?
DOBSON: Medicaid expansion included a certificate-of-need agreement. Now those laws, which regulate the placement of hospitals and other healthcare establishments and expansions, are being debated. I realize one General Assembly isn’t bound by a previous one’s actions, but we should honor the agreement. Let it play out, then move forward together, particularly with the volatility at the federal level. We don’t need one more challenge right now.
SMITH: Health systems don’t get to say no. They provide care to anyone, whether they have a payer or not. Without a certificate of need, ambulatory surgery centers and imaging centers will pop up, taking all the payers and leaving all the no-pays for the local health system. There’s this refrain from some elected officials that they believe in the free market. Healthcare is anything but a free market. We have 94% of our payers tell us what they’re going to pay for our service, and 6% of them don’t pay. Toyota, for example, doesn’t sell vehicles for 70% of the cost and give away 6% of them.
You don’t have to theorize about the importance of the certificate of need. Texas had about a dozen health systems close one year after it repealed its certificate of need. It’s critical to us. The House seems strong on that, but I’m not sure where the Senate stands.
BLAGG: When a certificate of need is awarded, oftentimes litigation kicks off. There’s a big fight for it. There’s still a need for it for some services.
GRIGGS: We’re pushing state legislation to continue a primary care payment task force, which has done good work. The bipartisan effort would require insurance companies to report that information. It’s in the House and Senate budgets. We need baseline data, so we can move toward value-based payments.
Rhode Island, for example, was able to increase the percentage that insurance companies were spending on primary care to 10% from about 5.5% over five years. It was about $27 million extra. Overall, healthcare expenses decreased $115 million during that same time. That’s about a 5-to-1 return on investment. I think you could really amplify that in North Carolina. ■
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