[ad_1]
Top North Carolina officials are closely watching contract negotiations between Duke Health and health insurance company Aetna — which are now heating up, with barely a month left to salvage a deal — over fears the outcome could lead to higher insurance costs for state employees or upend existing care.
The state government doesn’t typically pay much attention to contract disputes between private companies. But Aetna administers the North Carolina State Health Plan and provides insurance for over 750,00 state employees, retirees and their families. Aetna also insures hundreds of thousands more North Carolinians through other private companies. Duke Health, meanwhile, is one of the Triangle’s biggest health care providers.
If Duke gets its way, State Treasurer Brad Briner said in an interview with WRAL, premiums will soon be going up — again — for everyone on the State Health Plan. The health plan’s board in August voted to raise premiums to cover a budget shortfall.
“We can’t just give Duke whatever it wants,” Briner said. “We’ll be raising premiums on everybody already. And if we give Duke what it wants, then we’re going to have to raise them even more. And that’s just not fair.”
About 70,000 state employees use Duke Health. Since that’s only about 10% of the entire state health plan, some at Duke question whether it’s accurate to say their request will actually require the State Health Plan to raise premiums. The hospital’s executive vice president, Dr. Thomas Owens, told WRAL in an interview that it’s been years since Duke has gotten an increase from Aetna. And in that time, inflation has spiked.
“For Duke Health, we’ve not had a rate increase from Aetna in four years despite remarkably challenging economic times for health systems with inflation for supplies, materials, goods and labor being remarkably high in the last four years,” Owens said. “So we’ve sought, with Aetna, to again have modest, reasonable reimbursement increases. Frankly, less than inflation over the last four years.”
A spokeswoman for CVS Health, which owns Aetna, told WRAL that North Carolina health providers already charge more than most other states, and it’s pushing back against further hikes.
“North Carolina has among the highest health care costs in the country and Aetna is unwavering in our effort to protect our North Carolina members from additional escalations in costs,” spokeswoman Shelly Bendit said. “Our discussions are ongoing and our intent is to reach a mutually agreeable outcome with Duke Health.”
The State Health Plan isn’t a party to the negotiations. But as Aetna’s largest customer in the state, responsible for about half of its customer base, it holds some sway. Briner said he’s hoping for the two sides to reach a compromise. While he opposes Duke’s current request, he also doesn’t want to see Aetna respond by dropping Duke entirely and forcing thousands of state employees to lose their doctors.
The plan was facing a $500 million shortfall when Briner took office this January, and in response he has pushed to raise its premiums as well as to renegotiate with local hospitals to lower costs. Briner said after so many hospitals have cooperated, he opposes Duke seeking to go in the other direction and ask for higher payments.
“We can’t reward one provider, who’s playing a very public game of chicken with our patients, at the expense of all the other providers who have been good citizens — that have understood the position the state health plan finds itself in,” Briner said.
Duke Health previously said it’s only asking Aetna to pay enough to cover the ever-rising costs of health care, to help ensure that Duke can continue serving patients.
“Unfortunately, Aetna has not agreed to updated reimbursement rates that keep pace with rising health care costs and reflect the actual cost of providing patient care,” Duke wrote earlier this year. “Their current proposal would limit Duke Health’s ability to invest in technology, staffing, and essential patient services, which puts our community’s continued access to high-quality care at risk.”
Duke University is the second-largest private employer in North Carolina, behind only Walmart, in large part because of its large network of hospitals and health clinics. But it has also recently begun laying people off, facing large budget cuts due to President Donald Trump’s efforts to eliminate medical and scientific research grants.
As it seeks to get a win in the contract fight with Aetna, Duke has taken on an approach that industry insiders say is not unheard of but is more aggressive than normal — paying for radio ads targeting Aetna, sending letters to state employees about the fight and setting up a website dedicated to its position.
Owens, the Duke Health VP, said the financial strain from federal government cuts is real — but also isn’t why Duke is asking for Aetna to increase its reimbursements.
“We’re all trying to find ways to navigate these difficult times, where there have been cuts to reimbursement for health systems that will phase in over the next four years,” Owens said. “But even that is not directly affecting these negotiations. This is about no rate increases for the last four years. Rising costs of care, team members, supplies, materials, drugs. And patients who need to receive the high quality care that only Duke can offer.”
Premium hikes
State workers are about to be hit with higher health costs regardless of what happens with Duke and Aetna, due to a vote last month by State Health Plan leadership to hike premiums and deductibles for most people on the plan. They approved a sliding scale based on income, so that higher-paid state employees would take the brunt of the hit and lower-income workers would see smaller premium hikes.
The move angered state workers at all income levels, particularly since the North Carolina General Assembly has also failed so far to pass a new state budget, meaning no pay increases for state workers. The combination of higher health costs, rising prices for all kinds of goods, and no new raises could essentially amount to a pay cut for many state employees.
Briner said he wasn’t able to put an exact dollar amount on the premium hike that would be required if Duke wins the negotiations, in part because Duke and Aetna keep trading offers back and forth and not all of them are made available to the state.
But he expressed skepticism regarding Duke’s main argument, that health care costs are rising so much that it has no choice but to ask Aetna for larger payments going forward.
“Duke is ostensibly a nonprofit hospital,” Briner said, noting that the hospital system regularly reports hundreds of millions of dollars in profits and several billion dollars in investments.
“Don’t get me wrong, we want our provider community to be healthy and financially successful,” Briner said. “But there’s a difference between successful and greedy. And I think we’re crossing that line here.”
Duke says its request isn’t based on greed, and that it’s negotiating in good faith.
“Duke Health’s primary mission is to provide hope, health and healing to all patients and communities we serve,” a group of Duke officials wrote in a statement to WRAL. “We are actively engaged in good faith negotiations with Aetna, and we are hopeful we will reach a sustainable agreement.”
[ad_2]