By Jaymie Baxley
North Carolina’s first-in-the-nation Healthy Opportunities Pilot, which sought to address the nonmedical health needs of rural residents on Medicaid, faces a bleak future after state lawmakers failed to extend funding for the program in their stripped-down “mini budget” passed last month.
Launched in 2022, HOP provided deliveries of food, rides to doctor’s appointments and other services to help alleviate some of the social, economic and geographic challenges that kept Medicaid beneficiaries from getting and staying healthy. An independent evaluation showed that these services, which were halted at the end of June in anticipation of a funding shortfall, lowered participants’ health care costs by as much as $1,020 a year.
And program leaders say western North Carolina’s HOP program did more than save money on health care. According to a recent analysis, it also created nearly 900 full-time jobs and generated $36 million in income across an 18-county region.
The input-output analysis was conducted in June by Alison Davis, a professor of agricultural economics who runs a research center at the University of Kentucky. She estimated that the $75 million spent on HOP services in western North Carolina over a three-year period led to $114 million in business activity — an infusion that helped offset some of the losses residents suffered last year in the wake of Hurricane Helene.
In the weeks leading up to the mini budget’s passage on July 30, Impact Health, the organization that oversees HOP in western North Carolina, circulated Davis’ findings in hopes of convincing lawmakers of the program’s value.
The General Assembly ultimately decided not to set aside the $175 million needed to continue HOP in the state’s three pilot regions, which cover a combined 33 counties. But Laurie Stradley, CEO of Impact Health, said she’s “optimistic” that legislators will come around if they see the economic ripple effects more clearly.
“These dollars create dollars,” she said.
Helping rural economies
HOP channeled state and federal dollars into local businesses and nonprofits — many of them small, community-based providers — that delivered the program’s services. These vendors ranged from local farms supplying fresh produce, to transportation companies offering beneficiaries rides to medical appointments.
By funding these services, HOP effectively created new revenue streams and job opportunities in rural areas that often struggle with stagnant economies, program managers said.
Davis’ analysis found that every $1 spent through the program in western North Carolina generated more than $1.50 in economic activity. That return on investment came not only from the immediate payments to vendors, but also from the indirect benefits of job creation and increased local spending.
“Typically, when people say ‘health care,’ they’re talking about doctors and physical therapists and that sort of world where money often leaves the community,” Stradley said. “If you think about one of the biggest health care systems in western North Carolina, HCA, they have stockholders, and that money is going out of the region once it’s spent.”
The “social care” provided through HOP, she said, “is staying in the community and generating additional jobs.”
The program was also an economic boon for the six-county region overseen by Community Care of the Lower Cape Fear in southeastern North Carolina.
Sarah Ridout, HOP director for Community Care of the Lower Cape Fear, said the program created 600 jobs in the region. It also brought new business to more than 110 local farm workers who grew fruits and vegetables that were distributed to participants.
“It’s very challenging to find work in some of our really rural counties, so it was a really big opportunity for those that live within those communities to find work and be able to then kind of cycle that back into the local economy,” Ridout said.
The organization has provided additional support to its community partners through its Business Solution Center. Created with grant funding from the Kate B. Reynolds Charitable Trust and the Blue Cross and Blue Shield of North Carolina Foundation (both organizations provide support to NC Health News), the center offers professional development training to people who deliver HOP services in the area.
“We said, ‘Hey, here’s some training and certifications around our region. If you’re interested, we will pay for it to help develop and build your skill set,’” Ridout said. “I think about that in terms of economic impact, because you’re rooting these organizations and strengthening their skill sets.”
An analysis that uses the same methodology as the Impact Health study is underway for Community Care of the Lower Cape Fear. Access East, the state’s other administrative organization that oversees nine northeastern counties, did not respond to an interview request from NC Health News.
‘A little bit of a runway’
The three organizations overseeing the Healthy Opportunities Pilot have relied on a network of more than 140 nonprofits and community partners to deliver services.
Despite those services being paused indefinitely since the beginning of July, Stradley said most of the more than 60 providers that work with Impact Health have not yet been forced to make cuts to their staff.
“There are no reimbursements right now, and that is especially tough because we have been working with this network for a couple of years to make sure that they could sustain these programs using only reimbursements,” she said. “But the vast majority of the agencies we’re working with have not had to lay off their staff and won’t until September 30, so we have a little bit of a runway.”
Impact Health has been able to continue supporting its service providers with “capacity building” funds from the state. Those payments, however, are expected to stop at the end of next month unless lawmakers intervene.
“If a mini budget or a deal was struck before September 30, it’s a light switch. We could start delivering the next day,” she said. “If it’s after September 30, that’s going to make it a lot harder to get things up and running.”
In an email to NC Health News, a spokesperson for North Carolina’s Department of Health and Human Services said the agency plans to work with the General Assembly “on future funding opportunities” that would allow HOP to resume. Still, there’s no guarantee that lawmakers will act in time to prevent the loss of the infrastructure the program’s regional organizations helped build over the course of several years.
On Wednesday, Dev Sangvai, head of North Carolina’s Department of Health and Human Services, issued a statement warning that the “loss of key initiatives like the Healthy Opportunities Pilots […] risks a fundamental erosion of the NC Medicaid program.”
Regardless of the program’s fate, Ridout said Community Care of the Lower Cape Fear remains committed to “lifting up” its community partners.
“HOP helped build a stronger workforce, and we were going to continue to do that because it’s not like that training and development stops,” she said. “Part of our role as a network lead is to continue to help people grow in their roles.”
The sentiment was echoed by Stradley, who said Impact Health and its providers “are going to keep leaning on each other.”
“This network wasn’t just a bunch of contracts to deliver services,” she said. “These about 62 agencies have started to depend on each other, learn from each other, get stronger together — and we’re going to keep going.”
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