New, troubling questions for Carolinas HealthCare

The Observer editorial board

A federal lawsuit alleges Carolinas HealthCare System illegally attempted to prevent competition.
A federal lawsuit alleges Carolinas HealthCare System illegally attempted to prevent competition. rlahser@charlotteobserver.com

We are fortunate, in many ways, to have Carolinas HealthCare System in Charlotte. CHS provides some of the country’s best care to patients here, and it does so in part because it makes enough money to keep pace with what patients need and what the future of medicine might bring.

But too regularly, that attentiveness to profits has left CHS trying to explain some questionable business practices. That’s a bad thing for any company. It’s especially troubling for a non-profit hospital that receives millions of dollars in tax exemptions each year.

The latest disturbing headline: The U.S. Justice Department and N.C. Attorney General’s office have filed a federal anti-trust lawsuit against Carolinas HealthCare, alleging that CHS illegally restricts competition in the local health care market.

The Observer’s Ames Alexander and Karen Garloch report that the lawsuit alleges CHS uses its significant market power to negotiate “unlawful contract restrictions” that prevent consumers from getting better deals at other hospitals. An example: CHS contracts allow the hospital to punish insurers if they directly or indirectly steer people from the Carolinas HealthCare system.

The result, of course, is that customers end up with fewer choices and, in turn, higher costs. That’s good for the bottom line at CHS. But it doesn’t quite fit the non-profit charitable mission that the system holds up any time those tax breaks are jeopardized.

We’ve expressed similar concerns in recent years, including in 2012, when an Observer report revealed that CHS was making some of the highest hospital profits in the country while suing struggling patients for four- or five-figure hospital bills.

In another 2012 story, the Observer showed how CHS and other large non-profit hospitals dramatically inflated prices on chemotherapy drugs while cornering the market on cancer care.

As always, we should remember that Carolinas HealthCare does much good for Charlotte, including offering less profitable but critical mental health care. And few people will complain about being treated by top-notch doctors using the latest advancements that CHS is able to afford at its hospitals. Certainly, CHS officials are not the only ones guilty of wanting things both ways.

In this latest case, however, CHS tactics might have veered from questionable to illegal. In a prepared statement, CHS said that those contracts in question are similar to those used in other hospital systems. CHS attorney Jim Cooney says the system is being sued “for something that takes place on a regular basis across the country.”

That might be true, but as any parent might tell you – that doesn’t make it right.

Gubernatorial hide and seek

To the two candidates for N.C. governor:

We are prepared to stipulate on this day in June that neither Republican Pat McCrory nor Democrat Roy Cooper is particularly enthusiastic about his party’s nominee for U.S. president.


This week, both gubernatorial campaigns spent too much of their time and ours trying to make an issue of the presidential candidates. McCrory’s side tweeted and sent out press releases wondering why Cooper was afraid to offer a full-throated endorsement of Hillary Clinton, who was declared the presumptive nominee this week.

Meanwhile, Cooper’s camp wondered why McCrory wasn’t denouncing Donald Trump for racist remarks about Gonzalo Curiel, the judge hearing the Trump University lawsuit.

Given the unpopularity of Trump and Clinton, this could go on all summer and fall.

We get the game being played here. Despite her primary win here, Clinton struggles with the independent voters Cooper needs to win. Donald Trump has his own issues, which McCrory would like to distance himself from. Everybody knows this, yet each campaign is trying to present the other candidate as avoiding a hard question.

It’s silly. Few people, if any, will cast their vote for governor based on who the gubernatorial candidate supports for president. So let’s call a moratorim on it from now until November. You might even spend some of that energy and time on issues.