NCMS, Other Health Care Groups, Meet With State Treasurer To Discuss Reducing Health Care Costs

Dr. Reeder speaks at today’s meeting with NC State Treasurer Dale Folwell.

NC State Treasurer Dale Folwell invited the North Carolina Medical Society (NCMS) and other health care stakeholder groups together today, Wednesday, July 18, to discuss reducing health care costs for State Health Plan beneficiaries.

“We have a $35 billion unfunded liability,” Folwell told the approximately 30 representatives from the NCMS, medical specialty groups like the NC Academy of Family Physicians, the NC Pediatric Society and the NC Healthcare Association. “It’s a huge problem and we need short-term and long-term solutions.”

In May, Folwell announced he was directing Blue Cross and Blue Shield of North Carolina to cut State Health Plan medical provider rates by 15 percent on “major competitive contacts” being re-negotiated this year in order to save $300 million in health care costs.

In today’s meeting Folwell called for ‘tangible solutions’ to bring costs down and told the group he wasn’t interested in ‘theoretical’ or ‘untested’ methods. He is seeking solutions to implement in ‘three weeks, three months and three years,’ he said.

NCMS President-elect Timothy Reeder, MD, the only physician who spoke during the meeting, stressed that the number one goal was improving the health of state health plan beneficiaries. He agreed that containing health care costs by reducing unnecessary testing and eliminating waste throughout the system is important. He also pointed out that current trends show moving to a value-based physician payment model results in healthier patients and lower costs. Good data is key to this model’s success since it can drive physician behavior to be more cost effective, he said. Dr. Reeder also noted that provider rate cuts have not proven a long-term cost-cutting solution for any health plan.

Folwell gave meeting participants one week to send him concrete solutions to save money for the State Health Plan, however, he did not discuss eliminating the planned rate cut. The NCMS appreciates the opportunity to be part of an ongoing conversation with the Treasurer on driving down health care costs.


More Posts in Bulletins


Share this Post



  • Kerry Allen Willis

    Challenge accepted. Better ideas that don’t require a breach in my contract with BCBS as suggested.

    Ideas much better than this:

    1. Move to reference-based fee schedule and pay hospitals max of 160% of Medicare including Graduate Medical allowance and disproportionate hospital increases.(Savings 5-10% of overall costs)

    2. Eliminate facility and non-facility fee schedules and have one fee schedule. Savings 5-10%

    3. Cap Specialty payments at 175% of Medicare with primary care at 150% of medicare

    4. Allow a DPC option where all state employees are allowed to move to a MSA option where the state funds and makes payment to DPC physicians. 30% lower overall costs with private practice physicians than hospital employed Docs. Eliminates BCBS Network fees of 30-40 PMPM on these funds and lowers admin costs in area of 4-7%.

    5.The state developing its own network and fee schedule and moving away from BCBS could generate the largest savings with the least pain to providers estimated $30 PMPM

  • Jane H. Simmons

    The knee jerk reaction to automatically reduce payment to providers of health care is indeed shortsighted. We are targeted because we remain the low-hanging fruit in the process. All the other alternatives are much, much more difficult to achieve, but should be addressed first. To name just a few…

    1. Overreaching influence of insurance and pharmaceutical companies in the political process
    2. Arbitrary price increases in drug costs by pharmaceutical companies
    3. Opiate abuse and the resulting exorbitant costs to treat overdose and infants born addicted, not to mention the cost of foster or kindship care that many of these children end up in
    4. Never ending and increasing administrative and staffing burden to physicians to meet regulatory and quality measures that may not always improve patient care and may actually take time away from patient care
    5. Adding additional administrative burden to physicians by adding more payors to provide Medicaid managed care, all with different fee schedules, contractual requirements, and no real data to prove that Medicaid managed care has saved the budget in other states.

    I could go on and on about ways to cut costs in health care, but none of them will be as easy as just telling docs to do more with less. Sadly, it’s a method that has worked every time so far.

  • The NCMS should point out that doctors will choose not to care for as many state employees if a rate cut occurs. How about the Treasurer telling BCBS to cut their premiums to the state by 15% and see what kind of response they get!