Attorney Gary Jackson Weighs in on Antitrust Lawsuit against Carolinas HealthCare System

Eugene Woods, 52, became the CEO of Carolinas Health System last April.

This health care giant has over 62,000 employees in 39 hospitals and 940 medical sites in three states. CHS recorded more than 12 million patient interactions last year alone, with revenue approaching around $10 billion this year.

While it is considered a not-for-profit institution, which doesn’t pay dividends or have shareholders, the system’s excess income topped a combined $730 million in 2014 and 2015. The number of medical facilities CHS owns or manages, as well as its collection of clinics, physician practices, and other points of service have doubled over the last ten years.

Antitrust Allegations against CHS

While expansion and acquisitions of struggling, smaller systems are goals of the new CHS regime, government prosecutors believe that the system’s goals give it too much financial power. Last June, the U.S. Department of Justice and N.C. Attorney General’s Office filed an antitrust lawsuit that alleges the system for adopting practices which prevent insurers from offering plans which encourage patients to use lower-cost doctors or clinics.

The federal charges turn the tables in which hospitals buckle under the pressure from insurers. Insurers often possess leverage since their large market shares provide insurance for over 85% of Charlotte-area citizens with health coverage.

Since CHS is a thriving not-for-profit organization with tax advantages not shared by private businesses, many believe that the powerful system favors perpetual growth and financial prowess over restraining prices. Some even question if their oversight is sufficient enough.

“[CHS] is notoriously nontransparent and secretive,” said Attorney Gay W. Jackson in an article for Business North Carolina. “They’re the big boys on the block, the bullies, and that’s inconsistent with their mission, which is to serve the public.”

Eleven system executives were paid over $1.4 million last year. Former CHS CEO Michael Tarwater received a combined $11.5 million in 2015 and the first half of 2016, which included $9 million in bonuses and incentive pay. Woods earned $1.7 million in his first eight months.

Woods declined to comment on the antitrust lawsuit.

For more information, contact The Law Offices of Jason E. Taylor, P.C. today.


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