(upbeat music) - [Speaker] This is Carolina Business Review.

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- So, happy spring.

We have had a few cold snaps and scares for sure, but it's safe to say that the seasons are changing.

Welcome again to the most widely watched and the longest running program on Carolina business policy and public affairs, seen each week across the Carolinas for more than 30 years.

Thank you for supporting it that long.

Things may be challenging right now in policy and in communities, but spring always makes us feel better in the Carolinas.

We'll unpack some of these issues, what might be happening now, where we're heading, et cetera.

And later on, he has certainly been outspoken recently, the treasurer of North Carolina, Dale Folwell, joins us again.

Stay with US.

- [Speaker] Major funding also by Blue Cross Blue Shield of South Carolina, an independent licensee of the Blue Cross and Blue Shield Association.

And Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

(upbeat music) On this edition of Carolina Business Review, Anna Beavon Gravely, of NCFree, and special guest, Dale Folwell, North Carolina State Treasurer.

(upbeat music) - Hello.

Welcome again to our program.

Happy spring.

That always makes us feel better, right?

- I agree.

I get a little confused with the fake spring that comes before, like regular resurgence of winter, but other than that, I'm good, yeah.

- Pear trees, cherry trees, when they're blooming in February, it's a good thing.

- It's so confusing, and then the pollen that we had.

- Yeah, first world problems though, right AB?

- You're right, you're right.

- Well, welcome again.

This is a little unique for those of you that may be viewing.

Normally, we have two panelists on the first end of the show.

Dean Faile from the York County Chamber in South Carolina was going to join us, was not able to join us at the very last moment.

So thank you for carrying the load and carrying some water.

- Happy to do so.

Yeah.

- Big news outta North Carolina, and not just recently, but certainly in the last few weeks, and that is Medicaid expansion.

Looks like it will be accepted by the General Assembly and will be a law, if you will, in North Carolina.

It's been 10 years coming.

Anna Beavon, how, where do you, who do you think are the first beneficiaries of these federal dollars that will be now flowing?

- Yeah, I think the goal behind wanting to, to really push this through now, is to be able to capitalize on as much of, or as many of those federal dollars as the state can.

And they're really looking to help those who really need it the most.

The single mom who's working two jobs and has two kids.

Like, that's been a narrative that's been floating around for a while.

It's just to fit, try to address the people who are falling through the cracks.

- Do you think they will be the first beneficiaries?

Is that gonna show up quickly in that demographic?

- I certainly hope so.

I mean, that's been the whole narrative around why we're pushing it right now.

Why now?

We've had President Pro Tem, Phil Berger, who's been prior to, basically last year, was very against Medicaid expansion.

And then all of a sudden, he seemed to make this huge flip.

And I think it was really just the stories, the anecdotes, the layering of those anecdotes with statistics and being able to see the people who really do need it are falling through the cracks.

- Was it holed up in the Senate?

Was the Senate the one that was?

- The Senate was initially, so the long story of Medicaid expansion, it was first the both chambers, they were very against it.

And that was when we had Governor McCrory, and then the Senate continued to hold the line, hold the line, the House cracked first, and then the Senate was like, let's do it.

And then the House was like, wait, hey don't, hold on.

We need to see some major reforms coming from certificate of need, and specifically, access to healthcare.

And then in this last round of discussion on Medicaid expansion, you've seen the House and the Senate come together on the access to healthcare piece.

- You know, and we're gonna have a chance to unpack this more with the treasurer, who's gonna join us, and clearly has staked out some opinion and some leadership around healthcare in North Carolina coming out of the Treasurer's Office.

- Yeah, definitely.

- I wanna ask you one more question around the Medicaid expansion.

Do you think that as North Carolina moves forward and accepts these dollars, and it starts to move in the system, do you think this emboldens the Palmetto state, who has also been holding, you know, giving the Heisman to the state program.

- Sure, yeah.

- Do you think this becomes now a reality in South Carolina?

- I think North Carolina is a domino state in a lot of policy areas, but specifically, Medicaid expansion.

I think we were one of 13 that held out, and now there are 11 or 12 left that haven't expanded Medicaid.

And so I think we're gonna see those fall pretty quickly.

- Because, you think of North Carolina's lead?

- Definitely.

Yeah.

- Okay.

All right, let's switch to what is now being called workforce housing.

It had been called affordable housing for a long time, but you could argue that workforce housing is, by definition, become a much larger demographic cohort of people.

- Yeah.

- Because of the cost of lending, because of the cost of, of course, property.

- Mm-hmm.

- So how I, in North Carolina's General Assembly, specifically around policy, but also the folks that you talk to across the region and the state, Anna Beavon, what is the dialogue around workforce housing?

Are there ideas where it will be expanded, that there are ideas to create more places for workers to live and own?

- Yeah, that is a really complicated topic, as no surprise here.

- Yeah.

- But it's not an issue that lives in a vacuum.

So there's so many things that impact it.

So when you talk about affordable housing or workforce housing, I think changing the rhetoric around that is really helpful.

You are talking about transportation.

Can people come into an area where they're working because housing is a little bit less expensive, further away.

So how do we ease the burden on transportation?

How do we build houses at a lower cost?

Because that's where we're running into some of the major spikes in housing costs.

It's because it's just more expensive right now to build.

And then you have a market, I know the Raleigh area market is continuing to stay high - Right.

- and hold its value.

And then you just have the pure number of 19% of millennials own homes, and they're getting older, and they're mid forties now, and they're still finding it hard to buy houses and they're not in starter jobs.

And so how tackling this problem is gonna be not just one silver bullet.

It's gonna be a lot of small ticks and a lot of different areas around.

So you're gonna hopefully be able to chop down the tree with some tiny, like hammer hits.

- Yeah.

But maybe not.

So would you say for workforce housing, this is obviously gonna persist, but do you think we're headed toward a watershed event or a tipping point that will create some, oh, I don't know, emergency situation where we have to take action?

- Oh, I absolutely think we are.

I think that's where we are with a lot of these issues that have been pushed off, whether it's, and I just mentioned transportation, whether it's transportation, the highway trust fund, these issues that are not easy to explain in cocktail conversation are really coming to the forefront.

And our leaders in the General Assembly are having to look to the business community and industry leaders to figure out how best to solve it to include as many people and stakeholders in the process.

- So somebody, and this is the last thing, - Yeah, sure.

- we'll bring a treasure on, but somebody said in casual conversation to me recently from DOT, actually, from statewide DOT, said, you know, we're couching the idea wrong about workforce housing.

It is a transportation issue.

And they made it sound like we fix that, we fix it all.

Would you agree?

It's that simple?

- Unfortunately not.

I think that is probably the biggest bucket that you can put workforce housing into outside of housing itself.

But again, no issue exists in a vacuum, especially when you're looking for a long-term solution that can stand to help as many people as possible.

- Yeah, not surprising.

- Yeah.

- Thank you.

Stay with us.

We'll bring our guest on in just a moment.

Coming up on our program, a couple of things at least worth noting, Colonial Life CEO, Tim Arnold, comes back and joins us from the Palmetto State.

Not just plugged in CEO and plugged in company, but we'll talk about insurance, and how that factors into lifestyles.

And then, Wit Tuttle from tourism in North Carolina, as well as Duane Parrish from tourism in South Carolina, two biggest industries in the states.

These are leaders, and we will find out what tourism looks like for the summer of 2023 and beyond.

The treasurer of any given state is thought to be the Chief financial Officer, or if you want to call, the lead banker for a particular state.

In North Carolina, the current state treasurer has been outspoken about one industry in particular.

And it's not about banking, it is healthcare.

Joining us now is North Carolina's Treasurer, the Honorable Dale Folwell.

Your Honor, welcome back to the program.

- Well, thank you for having me and thank your sponsors for giving us an opportunity just to inform people, not just affirm about how they feel about important topics.

- So you have carved out a couple of big things, your Honor, and that is certainly healthcare.

You've talked about, and even, and I'll use this term, demonized CEO pay.

You've talked about the hospital cartels, and then you've also talked about what, and I'm gonna use your term, weaponizing medical debt.

Why are you putting such a big flag in the ground around healthcare?

Why are you going after 'em?

- Well, the reason is not emotional or political, but it's mathematical.

When I was sworn in as the keeper of the public purse, I inherited a $34 billion unfunded healthcare liability.

And a few years ago, Pew Research put that liability right behind the state of Illinois, same Illinois that your viewers hear about all the time.

So, and this is also about our public servants, those that teach, protect, and serve.

Our family premium is such that we have beginning teachers and beginning troopers who are making, having to make a decision between mortgage and family premium.

Food, family premium.

Energy, family premium.

Living their life.

So not only do we have a massive unfunded healthcare liability, our family premiums are too high, which is preventing access to healthcare for those public servants who teach, protect, and serve.

And we need those young, healthy families on the state health plan to offset people my age.

- Do you, and I'm not gonna ask this the right way, but I think you're been around long enough to where you'll know that what the core of the question is.

Does it need to be litigated in the court of public opinion?

Do you have, do you have back dialogues?

Can you speak to CEOs?

Do you talk to insurers?

And what are those dialogues like?

- Well, I referred to it as a cartel 'cause I used to stutter more than I do now when I started taking classes at Winston-Salem State and UNCG.

And my professor said, go to the dictionary when you can't find the right word.

You know, cartel is defined in the dictionary as an association which is formed to restrict competition and raise prices.

That's exactly what is happening with healthcare in North Carolina.

This cartel controls the supply of their product through this thing called certificate of need.

And it doesn't matter if you say kay ractor in the East or character in the West, the first three letters of those three words are pronounced con.

It is a con on the people of the state.

And the cartel who controls the healthcare also controls the supply of healthcare.

They control the quality, the access, the price, and now they will break your kneecaps and weaponize your credit score if you don't pay your bill.

And we had a medical debt forum, deweaponization forum, yesterday with Commissioner Pat Cotham.

- That's in Mecklenburg County in Charlotte?

- Representative, Dr. Reverend Wood from the First Baptist Church of Charlotte, and all the testimony about how medical debt is destroying people's joy of achievement and stunting their upward mobility.

People cannot see themselves past their poverty now, not because of the murderous invasion of Ukraine, not because of Covid, not because of acts of God, because of things associated with medical debt.

And these are the words that match the problem.

And on top of that, we're the only first state to ever have in our constitution Article 34, that perpetuities and monopolies are against the free will of our society.

- I'm gonna give you a chance to get a drink of water here, because I know that probably you struggled a little bit with coughing.

But so the idea is, and I promise I'm gonna give you a chance to ask a question.

(Anna chuckles) How do you, and the way you articulate it, obviously, is dramatic, but it's also attention-getting.

How do you, I know you don't, and I don't wanna put words in your mouth.

I know you're not saying they're malevolent, but is there some other force that's going on with hospitals as you see it?

- Well, one of my former neighbors in Winston-Salem was Maya Angelou.

And she said many profound things.

But one of them is that once a person shows you who they are the first time, you should believe them.

And the McClatchy Charlotte News Observer put a piece out 11 years ago, Prognosis Profits.

What has happened is that we've seen the consolidation of healthcare in the hands of fewer and fewer of these multi-billion dollar corporations who disguise themselves as non-profit run by these multimillion dollar CEOs.

And what I'm trying to say is these CEOs are making the decision about not abiding by the president's order about what things cost.

They are making the decision about not offering a level of charity care equal to the billions of dollars of tax benefit they get on the state and local level.

And they're also making the decision to put liens on people's houses and weaponize their credit score.

We're just after four easy things.

Quit giving the finger to the president, the current and the previous president of the United States, on their executive order to get rid of secret contracts, offer this level of charity care equal to the tax benefit.

Stop weaponizing people's credit scores, and have the courage if you make millions of dollars at a nonprofit, to tell people what you make.

That's it.

- [Chris] Anna Beavon, questions?

- Yeah, so right now we're dealing with a lot of bank volatility with the Silicon Bank Valley, Silicon Valley Bank.

And so I'm just wondering what is, is it better to have, well one, what is, was there any exposure or liability with North Carolina's, all of our state pension money?

And then second, what would be better?

To utilize a state-chartered bank or a federal-chartered bank in this season?

- Well, I'm gonna advocate for people to be a state chartered bank, since I chair the State Banking Commission.

(Anna laughs) And the Commissioner Bosken would, and former Commissioner Grace, would agree with me.

- Yeah.

- We now regulate 36 banks in North Carolina that are state chartered.

Some that your viewers obviously have heard of are BB and T Truist, still state chartered, First Citizens, First Bank, as well as a lot of great community banks.

I'm wearing this lapel pin today, has NC on it.

As far as North Carolina's balance sheet that you talked about in the earlier segment, and NC stands for nothing compares.

Today as we sit here, as far as the banking crisis, which has been unfolding for the last eight days, NC stands for no crisis.

Our banking staff, commission staff, has been working diligently to make sure that North Carolina remains a very solvent state, and that the banks who are state chartered are not getting out over their skis.

At the end of the day, with all the finger pointing going on, this is about something that's been in existence since the beginning of time, and that is greed.

We have individuals, CEOs, who swung for the fences, who took the money that they were entrusted with, and they got upside down in terms of the short term deposits versus their investments in long term bonds.

Those bonds fell about 20% last year.

That is what has put us in this situation today.

So currently, there is no crisis in North Carolina, but the reason for that is that we have a greater percentage of our deposits in North Carolina that are chartered by, in state banks that are insured.

So there's no panic for any people to take their money outta the bank.

It's a big thing.

- Yeah.

- And secondly, our deposit base is much more diversified than some of these banks that your viewers have been hearing about.

- Commissioner Folwell, well, not to put words in your mouth, but is this really a banking crisis for not just in North Carolina, but sure, we have some, and I'm not diminishing the fact that what happened to these banks, SVP, Signature Bank, First Republic, it's not good.

But is it really a systemic banking crisis?

- Well, it could be.

And you know, it could come from a non-systemic situation to a contagion.

- Right.

- And that's why Commissioner Bosken and myself as chair of the state banking commission are very diligent about, you know, saying the reality of what's going on in North Carolina.

I will remind you of what Warren Buffett said 38 years ago.

I won't say exactly what he said, but you can't tell who doesn't have a bathing suit on until the tide goes out.

- Right.

- And the tide went out on SVB.

And what has happened is last year, for the first time in even our lifetimes, we had a double digit decline in the stock market and even a double digit decline in the bond market.

And that has put tremendous pressure on the balance sheets of these banks that has resulted in the defaulting.

- [Chris] Yeah, okay.

Anna Beavon, question?

- Yeah, so looking at how much, this is a hypothetical, theoretical question, looking at how much money we have as a state, and looking to, like how do we?

- [Chris] In the budget, you mean?

- Yes, in the budget.

Good clarification.

In the budget.

What would be like your top places from a treasurer perspective to put that money?

- Well, the top places remain to fully fund the state pension plan, which the General Assembly's been doing, to fully fund the state health plan, especially given any risks that Medicaid expansion may bring on, us having to cross subsidize things in the state health plan with any kind of Medicaid expansion.

And so to put more money toward our unfunded healthcare liability, and we continue to pay off the state debt.

Your viewers have never heard anyone say this at any level of government, but the state debt of North Carolina, the general obligation debt is going to fall 60%, 60 over an eight year period of time.

Not six.

And five of those years are already in the rear view mirror.

- Yeah.

- And the next three years are in the oven.

So the other thing that NC stands for is, going back to your point about the balance sheet of North Carolina, nothing compares.

We have many other state treasurers who, state treasurers calling me and asking me what I'm doing about borrowing money in this high interest rate environment.

And I had to inform them we're actually retiring debt and investing money in this high interest rate environment.

And that's one reason, one of the many reasons, is that we got designated last year, number one for business.

- Yeah.

- It's because of the certainty that paying off 60% of your state debt brings to anyone who's thinking about expanding or relocating to North Carolina.

And also any type of regulatory reform that's gone on.

So we're in fantastic shape.

So I would advise to keep fully funding the pension plan, the health plan, but also to put money toward our unfunded healthcare liability.

Winston-Salem did this 34 years ago.

They hardly have a healthcare liability.

Under Mayor Vinroot, - As a city?

- As a city.

And Mayor Vinroot of Charlotte started this 31 years ago.

They have $160 million in reserve toward their healthcare liability.

So this is not something that just fell outta the sky.

This is something that people have known about for three or four decades.

And we do have examples of cities and counties across North Carolina who actually did something about this.

- So.

- Yeah.

- Let me ask you, as a former legislator, as now the, as North Carolina's top banker, top CFO, as someone who has come out for healthcare reform, let me ask you about one other issue that goes on, and this is not just specific to North Carolina.

South Carolina has this exact same challenge.

Rural hospitals, some of them are not solvent, some of them have a tough near-term even to stay afloat.

Is there another way that we need to be thinking about rural hospitals, with all of these things that you've discussed on this program so far, and how can we save them?

How can we think about them differently?

- Well, I think the cartel has no interest in rural healthcare.

What they have an interest in doing is squeezing rural healthcare and turning them into glorified emergency rooms.

So everybody has to be transported back to the mothership.

But we're gonna be doing some more research on this in addition to the research that we've just done on how much money they make on Medicare, how much they made during Covid, how much these CEOs make.

We've got more reports coming out.

It's not just the treasurer's office saying this.

It's us partnering with Rice University as a peer review, Johns Hopkins University, we have all the data, but then we give them, give that data to these outside peer review people to make sure that we're looking at this right.

What we need is we need a commitment to rural healthcare, independent, not under the arm of the cartel, independent, accessible, high quality, and profitable.

Now, just to let me give you an example, Gene Woods at Atrium, he used to sign the check of Terry Akin, who was the CEO of Cone Health.

Greensboro was one of the most monopolistic urban areas in the United States in terms of healthcare.

Terry Akin signed the check of the lady at Randolph Memorial.

You see how this cartel works?

What I'm telling your viewers is an absolute fact.

So the head of Atrium was signing the check of the head of Cone Health, and the Cone Health person was signing the head of Randolph Memorial.

All this needs to be unpacked.

- Well, in the short term, what can be done about rural hospitals?

- Well, what needs to be done is need to be a commitment to keep rural hospitals independent, profitable, accessible, and high quality.

That's what needs to happen.

And there has to be a commitment to do that.

And I'm the keeper of the public purse, but it seems like, on this particular topic, that I'm also having to be the protector of the consumer.

And we started off this whole segment about, you know, how much we've said about this, and we have to say it, you know, for mathematical reasons, but in the words of former Congressman, John Lewis, I get into good trouble every day.

- Yeah.

- And this is the right kind of trouble to be into, to advocate for the forgotten woman and the forgotten man of our state who cannot afford healthcare.

- We have less than a couple minutes left.

Do you have a question?

- Yeah, so when you talk about independent, these rural hospitals remaining independent, do you, in talking about the CEO pay, is that like the first step toward shining light on some unknown pieces within the healthcare industry?

- Sure, well, these CEOs are the ones that are making the decisions - Yeah.

- about not offering the charity care.

They've turned into, these quote non-profit corporations, have turned into real estate development and investment banking firms.

And they're also making the decision about whether to penalize people's credit scores, which impact the cost of their cell phone, their basic liability and insurance on their car.

You talked about housing in the last segment.

These credit scores associated with this medical debt prevent certain people from getting housing in this state.

And I can tell you, as the state treasurer and chair of the banking commission, there are certain jobs you can't apply for in North Carolina because of your credit score, which may be dinged by medical debt.

So these CEOs are responsible for everything that's going on in this particular case.

And what we want is we want them to go back to putting patients over profits.

Instead of what the News Observer in Charlotte talked about 11 years ago, Prognosis, Profits.

Put patients over profits, put employees over profits.

That will increase the quality.

That will increase the access, and that will lower the cost of healthcare.

- That's the final word.

Thank you, sir, for coming.

Thanks for your service and best of luck going forward.

- Thank you.

- Anna Beavon, thanks for being the one that fills in for two panelists.

- (chuckles) Happy to do so.

- Well done.

Thank you.

- Thank you.

- Thanks for joining us.

Until next week, I'm Chris William, and we certainly hope your spring and your weekend are good.

Goodnight.

- [Speaker] Gratefully acknowledging support by Martin Marietta, Blue Cross Blue Shield of South Carolina, Sonoco, High Point University, Colonial Life, and by viewers like you.

Thank you.

For more information, visit CarolinaBusinessReview.org.

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