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North Carolina leading the charge to ‘buy health’ for its citizens 

CEOs are making their business models work to embrace the state’s forward-looking agenda to invest $650 million in social determinants and other new ways of driving down costs. 

Key takeaways: North Carolina’s emerging systematic approach to aligning various public and private health organizations to change business models is a great example of how social determinants are starting to reshape not just care delivery but also ways the system interacts with other industries, in this case housing, education, food and nutrition.

By Tom Sullivan

Private and public health care executives in North Carolina are putting forward an agenda to move quickly toward value-based care.

With $650 in federal and state funding, later this year the state’s Health and Human Services department will transition its entire Medicaid population to managed care plans. That involves 18 percent of the state’s 10 million people, and 40 percent of its children.

The initiative includes Medicaid, Medicare and commercial health care organizations that are beginning to align around the broad notion that they can allocate resources to essentially purchase better health for state residents by incorporating social determinants into its overall strategy to both improve value and drive down costs.

Cohen explained in an interview with Health Evolution that Patrick Conway, CEO of Blue Cross Blue Shield North Carolina is moving the commercial space in the same direction. Cohen and Conway, it’s worth noting, are former CMS colleagues. She served as chief operating officer and he was deputy administrator.

“We want to buy health and that means doing things differently, putting different programs in place,” said Dr. Mandy Cohen, the state’s Health and Human Services Secretary. “We’re starting that work. This is a sea change, not an overnight process.”

But what precisely does it mean to buy health?

For starters, the people in healthcare have to be in what Cohen described as “a bit of a different business,” that factors in various aspects of people’s lives, including jobs, housing, community violence, and other social determinants.

“When really thinking about driving toward value you kind of have to know: What do we value?” Cohen explained in the below interview, conducted earlier this year at the Health Evolution Summit. “In North Carolina we value health — and not just health care.”

It’s not as simple as paying for more care services and, instead, state officials have to be very specific about aligning resource allocation closely with what they want to accomplish. That’s why North Carolina HHS considers various levers at its disposal, notably economic benefits, early childhood education services, food and nutrition to drive better population health.

“We’re going to use up to $650 million not just to buy more health care, but to buy some of those things underlying health,” Cohen said.

[Read Health Evolution’s in-depth interview with Dr. Mandy Cohen about the state’s work with social determinants of health.]

Among many social determinants, Cohen learned that providing new carpets and air filters to asthmatic children, as just one example, could keep them out of the emergency department.

“I don’t want to pay for an emergency room visit,” Cohen said. “I want to pay for a new carpet.”

Getting to that future state of value-based care that keeps North Carolinians healthy instead of in the hospital, however, will take considerable investments by hospitals, insurers and the state itself.

“There’s investment needed to help folks change. You can’t just expect it. Hopefully we can overcome those barriers together,” Cohen said. “It’s hard so let us help invest in that infrastructure change that’s needed.”

Watch more episodes of the Health Evolution Interview Series. The next Health Evolution Summit is scheduled for April 1-3, 2020 in Laguna Niguel, California.  

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Secretary Mandy Cohen, MD

Secretary, North Carolina Department of Health and Human Services

Since being appointed as Secretary of the N.C. Department of Health and Human Services in January 2017, Mandy Cohen, MD, MPH, and her team have worked tirelessly to improve the health safety and well-being of North Carolinians. DHHS is a cabinet-level agency with approximately 16,000 employees and an annual budget of $20 billion. Among her top priorities are combating the opioid crisis, building a strong, efficient Medicaid pr Full bio ›

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