Carolinas HealthCare CEO: Federal, State Healthcare Policy "Misguided"

Michael Tarwater, CEO of Charlotte, N.C.-based Carolinas HealthCare System, told his board the organization is facing significant challenges due to "misguided policy initiatives and reduced reimbursements" at the state and federal level, according to a Charlotte Observer report.

 

Mr. Tarwater said Carolinas is challenged to maintain its focus on quality and patient access while also coping with reduced payments and the possibility of additional cuts, according to the report. He also criticized state lawmakers: "We found during the recent legislative session that there are some who appear not to be taking seriously the gravity of the dilemma that's being faced in this industry," he said, according to the report.

Carolinas, a public, nonprofit system, has relied on the increased number of insured patients under the Patient Protection and Affordable Care Act as "the one avenue of relief," according to Mr. Tarwater. But that's undergone some change, as President Obama's administration delayed the employer mandate for a year.

Furthermore, North Carolina and South Carolina's legislatures each refused to expand Medicaid eligibility. Carolinas has hospitals and other facilities in both states.

For the first six months of 2013, Carolinas reported operating profit of $47 million. That's down from $94 million in the same period last year. The system also reported a total margin of $126 million, compared with $260 million last year. The system laid off 80 employees last fall. 

Mr. Tarwater said Carolinas is still making investments, however, such as a new behavioral health hospital and the creation of the region's first stem cell transplant program for adults with blood cancers, according to the report.

On another note, the system's board voted to modernize its employee retirement program earlier this week by discontinuing defined benefit pensions and offering a 401(k) savings plan only. The change will take effect in 2018.

More Articles on Hospital Responses to Budget Cuts:

AHA Opposes Post-Acute Care Pay Cuts
Sen. Chuck Grassley Probes Georgia Health System's Use of 340B Drug Program
Successfully Navigating Sequester Cuts: Q&A With Froedtert Health CEO Cathy Jacobson

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