A bipartisan bill making its way through the North Carolina General Assembly aims to modernize government regulations that restrict certain healthcare nonprofit organizations from using the full extent of their resources to improve care and lower costs.

These entities, known as hospital service corporations (HSCs), are restricted from investing their resources in the same way as for-profit insurers and many hospitals.

When this happens, the people of North Carolina lose out.

For example, say a nonprofit HSC wanted to use its resources to bring an innovative new healthcare startup into the state. The startup uses data and technology to detect and prevent the onset of type 2 diabetes.

Type 2 diabetes is a costly and long-term health challenge. Its prevention would significantly improve health outcomes and lower costs.

To make this investment at the level needed, the HSC would have to go through a highly cumbersome and lengthy regulatory approval process or convert to a for-profit company.

In turn, the startup is likely to seek investments elsewhere and North Carolina could miss out.

“To me, this bill is about the people of our state,” said Representative John Bradford who is a primary sponsor of the bill. “It’s about removing red tape that prevents investments that could improve the quality of people’s healthcare and lower their costs.”

HSCs are unique in that they are nonprofit entities. The returns on their investments are not divided among shareholders. They are reinvested in the state and consumers to improve health outcomes, increase access, and lower costs.

Some ways an HSC might turn investments into meaningful cost savings for consumers is through providing resources to urgent care centers.

By investing in urgent care centers, HSCs can expand access to lower-cost sites of care. Instead of seeking care at an expensive emergency room setting, more urgent care centers could be established to provide the same care at a lower price.  

The problem remains that outdated regulations prevent HSCs from doing this in a timely manner and at the most impactful level.

With HSCs being nonprofit, however, certain consumer protections need to be included in whatever final bill passes and becomes law.

Namely, the investments made by these entities must be investments that are aimed to improve healthcare, increase access, and lower costs.    

“We’re committed to making sure healthcare companies are investing in making healthcare better,” said Bradford. “Everyone agrees on that. The final bill will ensure consumers are well protected and can receive the highest quality healthcare services possible.”

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