Vidant Health CEO Under Attack

(Transparency: I live in North Carolina and follow the local healthcare industry with great interest. I don’t currently work with any hospitals or health systems in North Carolina; that includes Vidant Health. In the past, my firm has worked with a number of North Carolina Hospitals including Vidant Health, UNC Health Care, Rex Healthcare, Atrium Health, FirstHealth, and more. As always, I am not compensated for the blog posts I write.)

For the last several months, I have watched as Vidant Health’s CEO, Dr. Michael Waldrum, publicly advocated for his health system and the region it serves. His efforts have been commendable. Facing dramatic funding cuts from the state treasurer and legislature, and political pressures from the UNC System, Dr. Waldrum has worked to make all parties aware of the challenges these threats pose to his organization and to the health of his constituents within eastern North Carolina. According to Dr. Waldrum, these changes will make it more difficult for his organization to deliver care and expand outreach in eastern NC – the poorest and sickest region of the state.

To cut to the chase, Dale Folwell, the NC State Treasurer, is trying to save money (a good objective) by cutting reimbursements to providers who care for the nearly 727,000 current and retired state employees covered by the State Health Plan. It appears that the State Health Plan has been seriously mismanaged and is in trouble. According to the Carolina Journal, “[The Plan] has 3 percent of the funding it needs to cover projected future expenses, with $35 billion in unfunded liabilities.” Evidently, by 2023 the State Health Plan won’t have the funds needed to pay its bills. “The contracts, part of what Folwell is calling the Clear Pricing Project, rework the way that health care providers are reimbursed. Some providers, in particular hospitals, will feel the pinch under the plan, which pegs prices paid by the State Health Plan to those paid by the federal Medicare program for services.” (NC Health News, May 17, 2019) According to Vidant Health, under Folwell’s plan, it stands to lose $38 million annually with an overall impact of more than $70 million for eastern North Carolina. (Source: Stand Up For Eastern North Carolina website)

Here’s how the North Carolina Healthcare Association characterizes the situation:

“Treasurer Folwell has recommended changes to the State Health Plan that will impose huge payment cuts to hospitals and doctors. For many providers, these cuts would be so catastrophic that they would have to close their doors, cut back on life-saving research, shut off vital services, or lay off employees. The proposed “Clear Pricing Project” claims to be the solution that will reduce the costs of healthcare, but in reality, it would put hundreds of thousands of North Carolinians out of network with their trusted doctors and hospitals. This approach will threaten the availability of critical, life-saving healthcare for State Health Plan members and millions of other North Carolinians.” (NCHA.org)

The State Treasurer recently amended his proposal after it became clear that hospitals across the state were not willing to sign on as it was originally proposed. In conjunction with this amended plan came an escalation of rhetoric and a smear campaign. Last week, State Treasurer Dale Folwell and the State Employees Association of North Carolina launched a vicious personal attack on Vidant Health’s CEO, Dr. Waldrum. This smear campaign includes a new microsite, Twitter feed, and YouTube channel. According to an editorial by Capital Broadcasting Company (WRAL-TV),

“[t]he State Employees Association of North Carolina, a key Folwell ally in his effort, launched a mean-spirited personal attack on Michael Waldrum – the CEO of Vidant Health – the system that serves 29 counties in eastern North Carolina and operates the teaching hospital for Brody School of Medicine at East Carolina University.

This negotiation isn’t a political game. It is about the economic ability of hospital health care providers to remain economically viable to deliver services. They are showing that they won’t bend to bullying tactics.

Engaging in a bitter and personal attack campaign and issuing toothless take-it-or-leave-it ultimatums simply makes matters worse. Take down the “million-dollar-mike” website. Get rid of the mean-spirited attack video.”

The video at the heart of the smear campaign maligns Waldrum, calling him greedy and selfish. It also claims that he seeks a “profit” for the non-profit organization. The people behind this video are intentionally trying to mislead the public, failing to explain that every organization (for-profit or not-for-profit) needs a surplus at the end of the year if they are going to reinvest in aging infrastructure and keep up with advances in technology.  Here’s the hack video that attacks Dr. Waldrum:

By the way, this is the only video found on the “Affordable Health Care For North Carolina” YouTube Channel. Cowards at the State Employees Association and Treasurer Folwell are hiding behind this artifice.

We live in an age where hospital administrators will find it necessary to publicly advocate for public policy that enables them to effectively deliver care to the individuals and communities they serve. Vidant health serves 1.4 million people across a region the size of Maryland. It is disgusting that the State Employees Association would launch a smear campaign against a hospital CEO who refused to sign on to their health plan – a plan that would hurt his organization’s ability to deliver care across the region. If anyone is being selfish and greedy, it is the executives who run the State Employees Association of NC. They are pursuing their financial interest without any regard to the impact it will have on healthcare delivery and access to care in rural North Carolina.

It is hard for me to believe that an organization like the State Employees Association of North Carolina (SEANC) would have such a hostile tone in its communications and use such underhanded tactics. My guess is this is much more a reflection of the organization’s professional leadership, than its membership. Both my parents were state employees and they would have been appalled by SEANC’s tactics. When I read their Tweets (@ahcncnow), I am reminded of a petulant, spoiled child who is shouting and stomping his feet because he can’t get his way. To think that rather than invest time and energy working with NC hospitals to come up with a solution that works for everyone, they invested a ton of resources in developing this smear campaign. It’s unfortunate but this seems to be the new trend for political discourse in our country. It is an ugly situation and I can only hope that it ends well. For my part, as I tweeted in support of North Carolina’s hospitals over the last few days, the executive director of the State Employees Association of North Carolina (@RobBroomeNC – he needs some Twitter followers) called me a hack, troll, and ungrateful. I guess he likes me.