For months, as Republican lawmakers in the North Carolina General Assembly found themselves at loggerheads over a new budget deal, one key sticking point was funding for a children\u2019s hospital project.<\/p>\n
Legislative leaders said this week they have come to an agreement that boosts the state\u2019s commitment to the project by about $105 million, for a total of about $425 million. But the deal resolves a tense back-and-forth over a key initiative aimed at improving care for kids. But it\u2019s prompting new debate over where future healthcare dollars should be spent \u2014 especially since the new money was taken from a rural healthcare initiative.\u00a0<\/p>\n
As part of the 2023 state budget, the legislature promised nearly $320 million to the children\u2019s hospital. The $3 billion hospital, to be built in Apex through a partnership between UNC Health and Duke Health, is expected to create 8,000 jobs and conduct cutting-edge treatments and research into rare or hard-to-treat pediatric disorders.<\/p>\n
But last year, a new speaker of the state House of Representatives took office. And he began questioning whether the money could be better spent. House Speaker Destin Hall sought to claw back the children\u2019s hospital funding as part of the 2025 budget debate that has now spilled over into 2026. Hall has questioned the wisdom of spending so much money when pediatric care already exists in the Triangle and while hospitals in areas far less wealthy are struggling to keep their doors open.<\/p>\n
The children\u2019s hospital is a top priority for state Senate leader Phil Berger. As part of their dueling 2025 budget plans, the Senate proposed adding more than half a billion dollars on top of what had already been promised in 2023. The House, on the other hand, proposed taking back more than $100 million in already-approved money from the children\u2019s hospital project.<\/p>\n
This week, Hall and Berger announced they had finally reached a deal<\/a>: Hall would stop trying to cut funding for the hospital, and the legislature would also find another $105 million for the project, bringing the total state commitment to about $425 million.<\/p>\n \u201cWe are grateful to our state leaders for their continued support of North Carolina Children\u2019s and our shared goal of creating a brighter, healthier future for our children,\u201d hospital officials said in a joint statement Thursday.\u00a0<\/p>\n Berger and Hall announced the hospital deal, as well as deals on state employee pay raises and new tax cuts, on Tuesday. But no documents have yet been made public, and both sides say negotiations continue on other smaller parts of the budget \u2014 as well as whether to put additional money into the children\u2019s hospital.\u00a0<\/p>\n The $105 million represents less than one-third of a percent of state\u2019s total budget. But inflation, population growth and tax cuts are putting increased pressure on lawmakers to budget efficiently. Berger revealed Wednesday that the new money for the children\u2019s hospital is being taken from a separate initiative lawmakers also authorized in 2023 \u2014 for rural healthcare.<\/p>\n The NC Care project was supposed to have been a partnership between the UNC and ECU health systems, bolstering healthcare availability in rural North Carolina. The 2023 budget included hundreds of millions of dollars for that partnership, including $105 million to build a rural health center in Wilson and two more in western North Carolina.<\/p>\n A dozen rural hospitals have shut down across North Carolina in the past 20 years, according to the Sheps Center, a UNC research group that tracks rural healthcare nationwide. Shrinking populations \u2014 and a growing share of rural residents who are uninsured or on Medicaid \u2014 have contributed to the financial pressures.<\/p>\n In addition to the NC Care idea partnering UNC and ECU to boost rural health access, the legislature also originally proposed eliminating antitrust regulations for them \u2014 a proposal that received swift pushback from local and national experts<\/a>.<\/p>\n The Federal Trade Commission weighed in critically at the time, saying it smacked of a plan to pave the way for a merger between UNC and ECU that would result in higher prices and worse services \u2014 similar to arguments that have been made more recently against a proposed deal to combine<\/a> Raleigh-based WakeMed with Charlotte-based Atrium.<\/p>\n The antitrust exemptions didn\u2019t wind up in the final version of the budget that lawmakers passed in 2023, following the outcry. Berger said Wednesday that the NC Care program never really got off the ground, so it made sense to shift some of the money elsewhere.<\/p>\n \u201cThe NC Care effort was an effort to have UNC Health and ECU health work together on some strategies,\u201d Berger said. \u201cThat has not really gotten to a point where there was an organization, or an agreement as to how to allocate those dollars.”<\/p>\n Spokespeople for ECU Health didn\u2019t respond to a request for comment. A UNC Health spokesperson declined a request for an interview about the NC Care program. The children\u2019s hospital program, the UNC Health spokesman added, remains on track for a 2027 groundbreaking at its site in the Veridea development<\/a> in Apex.<\/p>\n Berger said he planned to push for more money for the project as he and Hall hash out the details of the upcoming state budget. But Hall said lawmakers should consider other priorities.\u00a0<\/p>\n Hall told reporters Tuesday that it\u2019s still worth asking whether the state could get a better bang for its buck by spending money propping up struggling rural hospitals, and keeping them from shutting their doors, than sending more money to build a new hospital in Wake County. He also pointed to existing pediatric units connected to big hospitals throughout the state.\u00a0<\/p>\n \u201cI think about Martin County \u2014 who has, basically, a hospital that shut down for all intents and purposes \u2014 and trying to make sure that we’re taking care of those folks, where it frankly doesn’t cost us a whole lot of money to be able to help them,\u201d Hall said. \u201cAnd the Children’s Hospital obviously is a lot of money, by comparison.\u201d<\/p>\n