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Carolina Journal Radio No. 708: Regulatory maze blocks alcohol-related entrepreneurs

Carolina Journal Radio / Donna Martinez and Mitch Kokai
The Truth Network Radio
December 12, 2016 12:00 am

Carolina Journal Radio No. 708: Regulatory maze blocks alcohol-related entrepreneurs

Carolina Journal Radio / Donna Martinez and Mitch Kokai

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December 12, 2016 12:00 am

North Carolina’s maze of alcohol regulations stands in the way of entrepreneurs trying to expand a growing industry in the state. Jon Guze, John Locke Foundation director of legal studies, outlines the complicated regulatory scheme in a recent report. He also calls for a rollback of regulatory overreach that would help the economy and enhance freedom within the state. Politics tends to influence central bankers, and the results often to lead to bad news for the economy. That’s the argument from Wake Forest University economist John Wood. He cites historical examples of political influence that have led central bankers away from decisions that would have been best for monetary policy in Britain and the United States. Hurricane Matthew had a devastating impact on eastern North Carolina. As lawmakers assess the damage, one of the first areas they targeted was transportation infrastructure. Mike Holder, chief engineer for the N.C. Department of Transportation, recently offered lawmakers an update on DOT’s response to the storm. North Carolina’s premier higher education watchdog group is changing its name. The John W. Pope Center for Higher Education Policy will soon take on the name of a former Davidson University chemistry professor who later served as North Carolina’s only two-term Republican governor in the 20th century. The namesake of the James G. Martin Center for Academic Renewal discusses his willingness to accept the honor. Pope/Martin Center board member John Hood also explains why the organization decided it was a good time to make such a major change. Discussions about direct primary care often involve individual patients. But DPC also can lead to tangible benefits for local governments. Union County government saved nearly $1.3 million in the first year of offering a DPC option for county workers. Katherine Restrepo, John Locke Foundation director of health care policy, explains how Union County has saved money without sacrificing quality health care benefits for workers.

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From Cherokee to Currituck from the largest city to the smallest and from the statehouse into the schoolhouse Carolina Journal radio your weekly news magazine discussing North Carolina's most of public policy events and issues welcome to Carolina Journal, radio, luggage, coca during the next hour, Donna Martinez and I will explore some major issues affecting our state central bankers are supposed to ignore politics will chat with a wake forest economist who presents example after example of cases when politics exercised a bad influence on central banking decisions. Hurricane Matthew devastated much of eastern North Carolina Lord what kind of damage. The storm did to the states transportation infrastructure. North Carolina's leading higher education watchdog group is changing its name to learn why. Also here from the new namesake will learn how one North Carolina County government is reaping big savings from a recent healthcare change. Those topics are just ahead.

But first, Donna Martinez joins us with the Carolina Journal headline North Carolina requires 43 different types of permits and licenses for activities linked to alcohol sales.

Now this maze of rules is hindering the expansion of the states alcoholic beverage industry.

So says our next guest John today is director of legal studies for the John Locke foundation. His new report on the subject is called hard to swallow, and you can find John, welcome to the program is North Carolina unusual in having all sorts of license permits, rules, regulations will every state has a lot of rules regulations preclude alcoholic beverage regulations and all states. For instance, require only people with permits to show alcoholic beverages at a retail level but where North Carolina is unusual what way North Carolina's unusual in that we have a state monopoly on the distribution, sale of spirituals, liquor only 17 states have either kind of monopoly and only you are the not have a complete monopoly at both the wholesale and retail level were also somewhat unusual in that we have what's called a three-tier system which permits a state supported oligopoly of a handful of distributors. Anybody who wants to sell wine or beer in the state has to go through a list as soon as I get over a threshold level they have to sell through one of these licensed wholesale distributors. A lot of states have them but I don't think a majority of states to so were somewhat unusual in that regard as well and I know when I moved to North Carolina from Arizona. I had no idea what was going on when people told me that there was something called an ABC store and that's what he had to go by liquor so for in the West.

For example, it seems I can't.

This isn't very prevalent. That's right, all these regulations are are far more onerous east of Mississippi.

There were things that they're not quite sure why that is but that's how it is. So, what kinds of rules would affect someone that is looking to get into the EM alcohol industry in our state. We got a lot of fat people who are thinking maybe they can nest start store they can create some sort of a beverage.

They want to sell what I have to do if they decide they want to do that well. There are hundreds literally hundreds and hundreds of pages of regulations pertaining to every aspect of the production, distribution and sale of alcoholic beverages. So one thing they have to do is familiarize himself with the whole body of law that pertains to the particular activity they're involved in and that right there to keep some people out there undoubtedly does. But there's there's more to it than that. Just to take go back to what I mentioned earlier, which is this wholesale distribution oligopoly.

This is what one of the most exciting and rapidly expanding area of alcoholic beverage production or status as microbreweries and micro distilleries. More recently, and this is really taken off. There's a lot of these new producers and there's a lot of young I want to say hips early sophisticated consumers who really like their craft beer and in some cases they like their craft whiskeys, but there because of the wholesale distribution oligopoly.

Anytime a brewer grows too big, they have to turn over distribution to one of a handful of state appointed wholesale distributors and that keeps them from growing effect in the report.

There are several quotes from the old Mecklenburg brewery in Charlotte, which has made the decision to stop expanding and cut back, both in terms of the range and amount of beer they produce and also in the distribution area because if they grow over 25,000 barrels which isn't actually a lot for a small brewer.

They grow over that threshold. They have to turn over distribution to one of these state appointed distributor's and that means, among other things laid off a number of their employees. It also destroys a relationship. Just develop with outlets and as they say I a a big distributor who deals mostly with the big brewers like Anheuser-Busch isn't going be particularly interested in promoting some new craft brewer. They do a better job of promoting their own product themselves, naturally, if the rules in place then actually discourage people from growing their business. Sounds like that would have a negative impact on North Carolina's economy undoubtedly means that instead of local brewers developing and possibly reaching the point where they can be selling their products in other states. They stay small and instead we we import more beer from states with the big brewers John in your report and again. It's it's called hard to swallow, you explain a concept called the bootleggers and the Baptists and you say that this scenario is actually at play in North Carolina help us understand that felt that that phrase bootleggers and Baptists come from excellent book with the same title written by Adam Smith and Bruce Randall Adam teaches at Johnson and Wales University, North Carolina, and it's a great book and a great concept.

I recommended to all the listeners what they explain, there is that for regulation to really take hold and and be maintained over a long period of time you need a coalition. Not necessarily a formal coalition not even necessarily intentional coalition but you need to two groups of people to support those regulations. On the one hand you have the people to call the Baptists.

These are people take for public spirited citizens who are concerned about a problem and want to see regulations put in place that will deal with it and on the other hand you have the people that they call the bootleggers who are cynical business interests are simply exploiting the regulations to their own advantages and to the expense of everyone else. The phrase goes back to the days when you had a cult you had Baptists who wanted Sunday closing laws. Bootleggers who went along with it because that gave them a monopoly on sales on Sunday, but nowadays a course in the case of alcohol beverages what you've got, instead of just Baptists.

You got all the public spirited citizens of what other whatever religious denomination are concerned about the problems stemming for alcohol abuse.

On the one hand, in place of the bootleggers you've now got this coalition of the state bureaucrats who benefit from the state monopoly on the sale and distribution of of spirits. You've got the wholesale distributors in the big brewers and big distillers who benefit from the art from the wholesale distribution oligopoly, and you've got all the existing businesses that don't want to have to compete with new entries into the into the alcoholic beverage marketplace so John if we want to reform the system wears a good place to start.

I think the place to start right now is to tackle this 45,000 barrel On that puts you into the wholesale distribution oligopoly, there are several reasons why think this is a good place to start. What is this completely unreasonable and anybody can see that just using common sense, but in addition we've got what seems to be a new kind of coalition building here which is we got the young craft brewers who are care passionately about their product and don't want to have to turn over distribution to a dispassionate corporate distributor and on the other hand, we've got these young sophisticated beer drinkers who also care passionately about the product. Both groups as it happens, or becoming slickly aware of the problem and they're motivated to do something about it. So I think we've got a potential coalition here of what I like to call beer drinkers in brewers that could, as a potential to fight the political battle against the old legs about this coalition. The question of the ABC system itself I mean that is entrenched in North Carolina and your thoughts on on. Perhaps some day when North Carolina might actually do away with that entire concept that entire system well.

I feel sure it will happen eventually. I'm not sure that that would be the place of of what worked first but along what I'm sure will happen just a couple years ago Washington state, finally got rid of their ABC system and they did it. It was a it was a similar coalition of consumers and entrepreneurs who said this is just counterproductive. It's not it's not doing anything to protect the citizens of the state from the problems associated with alcohol abuse and it is harming us economically and it's keep you from getting the products and services. We want women talking with John, he of course is the John Locke foundation's director of legal studies that you gotta say when this much more Carolina journal radio to come in just a moment, North Carolina is changing not just day-to-day but outward to our minute to minute and 2nd to 2nd, how can you keep up with the changes, especially the ones that affect you, your family, your home, your job, make the John lock foundation and Carolina journal part of your social media diet on Facebook like the John Locke foundation like Carolina. Journal follow us on Twitter at John lock in the sea and at Carolina journal news, insights and analysis you'll find nowhere else. Thanks to the experts at the John Locke foundation and thanks to the first-class investigative reporting of Carolina journal.

Don't wait for the morning newspaper. Don't wait for the evening news if it's happening now it's happening here the John Locke foundation and Carolina journal. Have you covered with up to the second information like us on Facebook the John Locke foundation and Carolina journal follow us on Twitter at John Locke NC and at Carolina journal. Welcome back to Carolina journal radio I Michiko guy the Federal Reserve performs the role of central bank in the United States. It's well you might expect to be separated from politics and political debate but is that true our next guest address that question during a recent presentation for the John Locke foundation's Shaftesbury society John Wood is Reynolds Prof. of economics at Wake Forest University. He discussed examples of central banking in democracies for that presentation and joins us now to shed some light on the topic. Thanks for joining us in place to be here so it central bank you people think about the Fed the Federal Reserve they know it has to do with the amount of money in the economy, interest rates may be perhaps people don't think about politics and the role that the political debates can play your presentation looks at some pieces of history in both the United States and Britain that show the politics can play a role Was hard to believe that anything could be more political than money every government agency which the Federal Reserve is one is a political institution, surrounded that the beginning by controversy. People have different ideas about how money should be controlled the Constitution assigns Congress the power and authority to regulate money. People argue about what that means but the Federal Reserve is the agency that Congress has chosen to carry out that constitutional authority. In fact, if we look back at our history and we didn't have a central bank.

At first it with me that it was the Fed as its constituted now came about at some point the early 1900s 1913 under the gold standard. The gold standard is a free market, money supply, you dig up money and when I pay for something it's with a piece of gold you like giving up paper pass under commodity standard, gold, silver, whatever the money supply is essentially determined in the free market and you don't need a central bank under the gold standard.

That's not to say that they might not be useful to stabilize banking but some people self included states tested. The trouble has exceeded the benefit it's it's politically controversial. Always know you view your presentation deals with the role politics has played in the past in specific examples. What are some of the things people should know about how politics has affected central bank. Okay well let's take the bank of United States and Alexander Hamilton. Hamilton wanted a national bank which is close to what we think of as a central bank in Hamilton was controversial got this 20 year bank of the United States which Jefferson didn't like it, was allowed to relapse. Then they got another one for a few years and Andrew Jackson well John Marshall in his biography of Washington said that the bank of the United States was the chief financial was the chief political controversy and in the early years of the Republic and we know that under Jackson.

It was controversial but basically after the second banquet supply was killed by Jackson between 18.

Essentially, 1833 and 1913.

There is no central bank Congress paid goal received gold actually conquer the House of Representatives that was essentially the monetary authority and you had the populace. The easy money guys in the hard money guys or the Wizard of Oz is opposes allegory on the gold standard William Jennings Bryan though. Should I crucify us upon a cross of gold he had guys in Nebraska had disfigured farmers.

One inflation I know why. Where is the sound money easterners McKinley Cleveland. It was a geographic rather than political like like Cleveland and McKinley sound money northeastern types. Bryan and these guys were easy money.

Southwestern types of the politics but the gold people one initially I thought that one until I guess that we had the Fed I think a lot of people today will necessarily picture the Fed as being part of politics.

But how is it will formerly the organization of the Fed.

The Fed consists of federal funds. It's a federal institution, America's one of the central bank didn't want run by J.P. Morgan guys since everyone federal input so there are 12 reserve banks and their very important in terms of economic policy they would lend to local banks and remember the Fed is not a bank. The Fed is a printing press. It's that simple.

I think people have a problem because I realize how simple it is. If I want to increase the money supply. Before the days of of the computer.

I manufacture some cash from the basement and gone by a bond notice bondholder now has money they can deposit. This is how the money supplies created.

Now we do it by the push of a key.

So when the federal reserve is organized. There's a lot of local input local banker specimen support have been inputting the reserve by the Federal Reserve Board in Washington, the chief agency that consists of seven guys and gals on the name for 14 year terms. The idea is that you will name you for a 14 year term in order to insulate you from current political controversies so you won't get excited and bail people how you got your ears were sort of independent kind.

Now there only five of the seven now sitting reserve people are like judges. The Republicans have hope of hard time about appointments and vice a versa fund parties change but that their appointed, but it doesn't make the new system like a Supreme Court justice. So what what I said's political it's not quite as political as nomination of Clarence Thomas of Robert Bork.

Nobody knows Texas and and really political views are also fairly sound money people. If you talk to them. They talk about fighting inflation. Even though that doesn't seem to happen so there appointed by political body and they meet the chairman meets with the president is a lot of talk about independence. I'm not quite sure nobody's independent of everything because it is a political body. We have to expect in some respects, the politics is going to affect what they do know these are well-meaning, good fellows who would like to have state pipe would like to have stability, but they live in a complicated political world well on that note will have to wrap it up and it is a very interesting topic that the Fed central banking and the role politics plays we been speaking with John Woody is Reynolds Prof. of economics at Wake Forest University.

Thanks much for joining us. Thanks for having a lot more on Carolina journal radio interest among at the John Locke foundation where leading the effort to clean up the mess left behind by big government liberals for decades. The powerful left in our state had piled on rule after rule, regulation after regulation never really caring about the people whose lives are caught in the nightmare of complying. In other words, you their handiwork had made it tougher to get a job even increase the legal risk of operating a business. We say enough is enough that it's just not fair to you. That's why reform minded lawmakers have turned to the Locke foundation for answers and acted to lighten your burden were proud that our intellectual firepower has improved lives. You can count on the John Locke foundation to watch out for your interest. The special interests. We would be honored to have your help in this fight.

John and make a tax-deductible donation. Right now the John Locke foundation where fighting for you where fighting for freedom government plays a key role in your life affecting your paycheck the way you educate your kids the way you do business.

How can you tell if government is doing a good job making the right choices. Spending tax dollars wisely. Carolina tackles those questions every day. The John Locke foundation publishes Carolina journal in print each month and on the web each you'll find exclusive investigative reports on topics. No one else is covering what else a rundown of the best new stories, editorials and opinion columns in North Carolina. John Hood's daily Journal news stories and important public and the voices of the newsmakers themselves. Carolina journal radio in print on the air and on the web. You can find the information you did you know you can now advance freedom and free markets just by shopping with Amazon it's true online shopping is now a great way to support the John Locke foundation just shot using the Amazon smile program and designate the work foundation to receive a portion of your purchase amount that's right you shop and Amazon donates money to assess the John Locke foundation. So here's how it works Lott on two Amazon smile.

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Welcome back to Carolina journal radio. I mixed coca hurricane Matthew left much of eastern North Carolina underwater. In October a couple of weeks after the event state lawmakers started assessing long-term impacts. One area they reviewed transportation, the state DOT's chief engineer Mike Holder offered an early progress report at the height of the storm we had over 600 closures and currently built with about 100 of those and more Warbler floodwaters are going down. We have about 500 closures are still in place, because there is significant damage, or safety issues on those particular routes. We cannot open them at this time 5111 we had over hundred 20,000 customer service inquiries, which is a record for that call center staff of your seriously, we had over 5000 calls received one, call volume over today's Monday and Tuesday after the event was so great that we had new laws of the women's prison chores located with women's prison actually assist us in our answering calls on the assistance on this is Matthew proved to be a record-breaking store there's places that floated never ever flooded before so it's like you said it was a whatever you call thousand year event that more or less places that you would never float and all under hurricane floor wouldn't have the widespread parish exist now because every River basin. Unfortunately, very familiar with every River basin is North Carolina very much so every River basin floated because the intensity of rain in word fail is on the headwaters of love is rivers is all creeks filled up and came into the rivers adjust lumber mama River in Lumberton with 24.7 feet which the record, there was like 20 so it was, that's a split status record for such tall close to floor record for such letter again went once the system is so widespread, it was what about the costs for transportation related repairs.

Holder offered some good news with the caveat repairs and recovery that the department transportation does only to be read by FHWA on our primary interstate routes or about FEMA or secondary routes and generally it takes about five years. Close the books on FEMA reimbursement for FHWA reimbursement hospital Walters coming on the check all expenses all the time records all the documentation so it might be five years before the state DOT knows all the taxpayer costs linked to hurricane Matthew will return with more Carolina journal radio. If you love freedom we got great news to share with you now. You can find the latest news, views, and research from conservative groups all across the state.

All in one place North Carolina one-stop shopping for North Carolina St. movement North Carolina You'll find links to John Locke foundation blogs on the days news Carolina reporting and quick takes Carolina journal radio interviews TV interviews featuring CJ reporters and Locke foundation analyst plus opinion pieces and reports on higher education. All of that from the Pope Center for higher education policy commentary and polling data from the Cintas Institute and news and views from the North Carolina family policy Council. That's right, all of that, all in one place North Carolina that's North Carolina spelled out North Carolina Log on today. Welcome back to Carolina journal radio. I mixed coca North Carolina's premier higher education watchdog group is getting a new name, the chairman and longtime president of the John Locke foundation John Hood recently explained the move more than two decades ago, my colleagues and I John Locke foundation decided to create a special project devoted to college and university policy. It was our strong belief that higher education did not receive the level of analysis and intent, and an attention that it deserved.

It represents one of the largest categories of spending and our state pre-much any state, University of North Carolina system, the states community college system and are private colleges and universities in North Carolina are among our largest institutions and largest employers in the state higher education also produces scholarship, sporting events, cultural events and the arts. It has the potential, at least to be the preserver of great traditions, a generator of new ideas and an embodiment of our highest aspirations as we know it can also waste a great deal of money and cause a great deal of mischief. In fact, the very first report that the John Locke foundation published about higher education precedes the creation of the Pope Center by a couple years but it was it was actually called a tradition at risk, and it was about problems at the University of North Carolina at Chapel Hill. John Hood explained how the higher red center got its first name when the John Locke foundation decided to name its new project, the John William Pope Center for higher education policy. It was to honor one of the founding donors of jail F who would also served on the UNC Chapel Hill Board of Trustees and had always cared a great deal about higher education history is present and its future. Mr. Pope was a strong believer in the mission of the Pope Center some years after we created it at the Locke foundation. We decided to spin it off as a separate 501(c)(3) organization John Popa supported that decision in the Pope foundation actually increased its support for the organization as a new freestanding Institute, the John W. Pope Center continued to fill its mission continued to enjoy John W. Pope's respect and it continued to receive funding from the John W.

Pope foundation have I mentioned the name John W. Poe well this is the nature of the problem. Ever since its inception, the Pope Center has had a bit of a branding challenge. Some people think it is the Pope foundation. By the way some people think it's the place you go if you really want to learn about Catholicism you want to like convert so that there's a lot of branding problems here, but particularly people mixup the Pope Center and the Pope foundation. That's John Hood, longtime president of the John Locke foundation and now president of the John W.

Pope foundation, he offered an example of the confusion between the Pope foundation and the Pope Center for higher education policy. Recently I had a visit. It was a very nice visit from some executives from the Bill and Melinda Gates foundation, and I came in town and I thought they wanted to compare notes about charitable giving. I don't think I had any notes to compare with her, but I thought I would take the meeting and we had a great conversation Asking not your position on tenure in your positional academic freedom in your position on a single yes I have positions on these, but do you mean the Pope Center there down the street. So this is the nature of the challenge that that we have decided to do something about the Pope family and the staff and board of the Pope foundation all share a strong belief that the Pope Center is doing excellent work and that if John Pope were alive today he would be very pleased and proud with this organization, but enough is enough, since enough is enough. Pope Center leaders decided to move forward with the process of changing the group's name.

We had some discussions we had brainstorming sessions we came up with a short list of names and we took and field-tested some of you may have been asked about the names that we wanted to field test we talk to people who are our audience members to find out what they thought about the various options we worked on this project for quite a while. We considered it very carefully and here's what we decided to do the organization will now be called the James G Martin Center for academic renewal. Gov. Martin is an active supporter is a member of our board is decades of public service to North Carolina, including six years on the Mecklenburg County commission 12 years in the US House of Representatives in eight years as governor have made our state better in so many ways. One might say that what we got out of it was better schools, better roads and better jobs out of you might say that, but keep in mind that before he was governor Martin before he was Congressman Martin before he was County commission Chairman Martin Jim was Prof. Mark.

He taught chemistry. It does, it is beloved alma mater Davidson College for 12 years.

After receiving his PhD in Princeton from Princeton in organic chemistry. He was an excellent teacher and a tough grader. He continues to care a great deal about academic standards. Grade inflation and diversity of fall on campus among many other issues, we cannot think of a better thinker and leader for whom to name this organization, the Martin Center for academic renewal.

Keep doing what it's been doing for so many years and I will lift up the name of someone whose long service to North Carolina deserves to be honored and celebrated. What does the namesake of the new James G. Martin Center for academic renewal.

Think about the name change is a former college chemistry professor of one who's been very upset about the erosion of grades with the grade inflation is also been very disturbed by the political biases that the present to some extent way back in the booth 50s when I was in school is long time ago friends but getting even more so now where students have to be protected from conservative thought is as if somehow I can't can't handle more than one line of thought and therefore I become especially supportive of and fond of Pope Center for higher education policy even has now got a start. Learn how to deal with the new name for the center. What is the same Center and were going to continue with the same with the same purposes. What in all of our efforts to provide for young people to have exposure to diversity of society. It seems like one diversity was getting left out of that is the diversity of intellectual thought and ideology and political flick. And so this organization has been installed will work in all the other works.

To be sure that we try to correct them and that's why the academic renewal part of the name is so very important as I've come to admire, especially the Pope Center and its work that's former North Carolina Gov. Jim Martin is lending his name to the states premier higher education policy watchdog it now will be called the James G. Martin Center for academic renewal term with North Carolina German radio in a moment at the John Locke foundation where leading the effort to clean up the mess left behind by big government liberals for decades. The powerful left in our state had piled on rule after rule, regulation after regulation never really caring about the people whose lives are caught in the nightmare of complying. In other words, you their handiwork had made it tougher to get a job even increase the legal risk of operating a business. We say enough is enough that it's just not fair to you.

That's why reform minded lawmakers have turned to the Locke foundation for answers and acted to lighten your burden were proud that our intellectual firepower has improved lives. You can count on the John Locke foundation to watch out for your interests. The special interests.

We would be honored to have your help in this fight.

John and make a tax-deductible donation. Right now the John Locke foundation when fighting for you were fighting for freedom, welcome back to Carolina Journal radio I'm Donna Martinez. It's called direct primary care and it's a new way for patients to get easier access to a primary care doctor, and a new way for local governments to save money on healthcare costs for government employees here in North Carolina. One particular county is proving that direct primary care does indeed work.

Catherine Restrepo is director of healthcare policy for the John Locke foundation. She cowrote a new report on the subject with Julie Tisdale who is the Locke foundation city and County policy analyst and Catherine joins us now. Welcome to the program. Think first of all, explain what direct primary care is and how it works. Sharon Jack premium care if the simplified healthcare delivery model where it really restores the patient. Dr. relationship. So, in exchange for monthly payment like a gym membership of around $50.

That patient is entitled to around-the-clock care contacts Skype email called her doctor 24 seven and in exchange for that monthly payment as well. They have a certain defined set of Mary care services on that they can gat for that monthly payment so anything from physical esteem EKG EKG testing skin biopsies you a lot of preventative care procedures and services so you could make an appointment to going to see the doctor or you could Skype or you can text back and forth. You can schedule same-day appointments. I mean, it really is guaranteed access to your doctor that your beckoning call about the payment. Catherine, how does that work them delete we have our insurance but then is this a fee on top of our insurance now so that the distinction between direct primary care and traditional primary care is that these doctors if the if the Space that that's completely cash on operated system so they do not accept insurance whatsoever. They don't file insurance on and they completely remove insurance from prevent. They completely remove preventative care services from somebody's insurance policy so it's reckoned they recommend that patients still have insurance especially for the unforeseen events or catastrophic events on but really don't say that a lot of these check her doctors say that 80 to 90% of medical care can really be delivered in a primary care setting and it's actually very relatively inexpensive to administer, especially when things are transparent, which often times are not in healthcare and it's actually very affordable way to get basic healthcare for a lot more people. Here's what's so interesting and this is detailed in the report that you cowrote with Julie Tisdale here at the Locke foundation, Union County County government in North Carolina has adopted the direct primary care approach.

Tell us what they're doing shares the union County on gets even better background I mean healthcare costs are rising, the constantly rising on people's out-of-pocket payments and deductibles. There rising six times faster than somebody's wages. Okay, so there's definitely a cost issue with healthcare everybody is that both sides of the political aisle agree on it and it's really affecting employers that employers as a way to maintain the same benefits they offer their employees on, but to combat that rising costs they continue to sue to cost shift more funds onto their employees to their employees are ending up paying more in out-of-pocket expenses to keep that same benefit plan on by a way that union County has tried to counteract that that they they introduced a consumer driven health plan are more like a high deductible type of health and where. Yes, there are higher out-of-pocket expenses for employees, but if it's managed effectively on and if there's good benefits involved and it's actually pretty there's pretty it yields pretty high satisfaction rates amongst employees, but to further optimize that consumer driven health plan.

Union County added Palatino how they contract with Paladino health, which is a direct care organization and Palladino house set up on and off as close to all of the union County on government office buildings, and those two doctors there are the direct care doctors for all of union County workers that workers can schedule same-day appointments like as mentioned before they can going on a moments notice. They can be seen instead of unnecessarily going to an emergency room or an urgent care and they see the same doctor every single time.

So it really does restore that relationship. Let's talk more about the cost. So what I'm hearing you say is that for the the employee of union County who has insurance with the county to have direct primary care it's not costing them anymore now and it's not in fact actually saving on out-of-pocket costs because with the normal consumer driven health plan and this and keep in mind that this is an options that not all employees have to do this if they want to do it they can. It's an added benefit option for them to take advantage of. So if you have an employee in Union County who just has their consumer driven health plan may pay up. See you, I think around 600 $5700 in out-of-pocket expenses before on its part actually covered by their employer bites people who choose the Paladino healthcare option. They immediately pocket at 657 $50 in out-of-pocket expenses because that is redirected to the employer, and that paying for that.

It's redirected towards their membership so that actually comes out to be a budget neutral on value-added benefit for these workers and for the employer so not everyone is on the plan with union County. It's their choice to do it. Someone you know based on union County's experience so far. What about costs and what I satisfaction share. The patient yeah will patient satisfaction very high. Anything 70% of Paladino patients have reported an overall improvement in their health status and if you look at the risk factors, especially patients with chronic conditions. So if you just look at the percentage of union County employees that have chosen Paladino as the direct care option on about 40 to 44% of union County employees have chosen Paladino and within that 44%, about 60% have chronic conditions on so these are people that need lots of medical attention need to be seen and because access mean this is a model that really benefits patients that need lots of medical attention because they are not for that they have that instant access to down her weight two weeks to be seen by specialists or wait a couple days to hear back from their primary care physician to then be referred to a specialist.

It's all there for them. So the very convenient and death is an effective model especially dependent costs on with healthcare with rising healthcare costs down as union County then actually saved money keeping in mind the money that union County and is given to them by taxpayer yes exactly, and it was in just one year.

Union County as employer and taxpayers have saved $1.28 million in healthcare claims and that's just that's just some 44% of union County workers have chosen Paladino as a direct care, primary care option for their help and if it's so were hearing the end that the patients who are experimenting with this ligand and the county is saving on its costs for health insurance and medical claims for government employees. So this sounds like it's an innovation that other local governments should be looking at absolutely and other counties on after speaking with Mark Watson who is the HR human resources executive director for union County was very instrumental in implementing the groundwork of this contract with the direct care organization. He has mentioned that other surrounding counties have expressed interest in doing something like that on so hopefully you know within the next couple of years, more and more counties will will be taking on this innovative delivery model and as a way to just show their employees that they really do value them and they want them to have good healthcare. What about the state of North Carolina, Catherine, is that something that that the state should be looking into. Yes, this day I mean every government health insurance program should be looking into this to mean Medicaid in Washington state on the Medicaid program has contracted with key lines, which is a large and other large direct care organization similar to like the Paladino house here in North Carolina and they've third doing a Medicaid pilot project now and within two years they save 20% on on healthcare costs just from this pilot project and the state of New Jersey has just contracted with our health, which is another larger direct care system for all of their state health employee. There their employees to use this as a benefit option. Catherine, thank you so much thinking that's all the time we have for Carolina journal radio this week on behalf of Mitch Kovach. I'm Donna Martinez. Join us again next week for more Carolina journal radio like a journal radio is a program of the John learn more about the John Locke donations that support programs like Carolina journal radio sending email to development. John 1:66 Jay Leno info 166554636 Carolina journal radio nation airline is running all opinions expressed on this program nearly makes them more foundation airline sponsored Carolina again

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