North Carolina Treasurer Dale Folwell took another swipe at the state's largest hospitals recently, this time turning his attention specifically on hospital executives, which he says have been paid millions not to improve care, but to "enrich themselves while fueling a crisis of health care affordability."
This is now the fifth reportissued by the treasurer's office critical of hospital finances. Folwell has called the state's hospitals a "cartel," and accused them of driving up health care costs.
Hospital leaders have grown increasingly annoyed with the treasurer.
"All he does is recycle tired rhetoric and vilify hospital leaders who are devoting their lives and careers to serving the people of our state," according to a statement released by the N.C. Healthcare Association, which represents hospitals.
Most North Carolina hospitals are nonprofits, and therefore enjoy significant tax benefits. In return, they are expected to provide community benefit, including free or low-cost care to those who can't afford to pay. Folwell has argued that hospitals have disregarded that compact. Specifically, in this latest report, he says executives have been compensated not to lower costs, but to execute mergers and increase revenue for their hospitals.
What's more, Folwell's report shows that only three health system leaders — those for Duke Health, Novant, and Cone Health — cut CEO compensation during the pandemic, even as systems took $1.5 billion in coronavirus relief to help struggling hospitals.
"But in stark contrast," the treasurer's report notes, "CEOs took home an average $3.4 million across North Carolina's largest nonprofit hospital systems in 2020. The majority of top executives also accepted pay increases."
In defending hospital executives, NCHA President Steve Lawler says these hospital leaders "direct an array of care services … in a constantly shifting state and federal regulatory environment."
He added that Folwell could use his time to focus on things like expanding Medicaid, which would reduce health costs across the state.
