North Carolina state employees and retirees may soon have access to no-cost surgical care through a novel partnership between the State Health Plan and Novant Health, a Winston-Salem-based healthcare system. The agreement, announced this week, aims to address rising healthcare costs and improve access to essential procedures for the plan’s nearly 750,000 members.
The collaboration centers around the State Health Plan’s “Lantern” surgical benefit, launched last fall. Lantern, a Dallas-based company, identifies high-quality, cost-effective surgeons and facilities. Through this program, eligible members can receive certain non-emergency surgeries without out-of-pocket expenses. Novant Health is the second major North Carolina healthcare provider to join the Lantern network, following initial agreements with orthopedics practices last year. This expansion significantly broadens the program’s reach across the state.
State Treasurer Brad Briner emphasized the importance of accessibility, stating that plan members “live and work across our state, not just in substantial urban centers.” According to a press release, the partnership will bring surgeries closer to home for many members although simultaneously working to improve both health and financial outcomes.
Addressing Financial Strain on the State Health Plan
The agreement with Novant Health comes as the State Health Plan faces significant financial challenges. Previous projections indicated a potential loss of $507 million in the 2026 fiscal year, increasing to over $900 million the following year. These projections prompted State Treasurer Briner to increase member deductibles and raise monthly premiums by $20 starting this year, according to reporting from Business North Carolina. The plan currently covers more than 7% of all medical claims in North Carolina.
The Lantern program is designed to mitigate these financial pressures by leveraging a different payment model. Lantern President Dickon Waterfield explained that the program capitalizes on the discrepancies in healthcare pricing, where employers like the State Health Plan are often billed significantly more for surgeries than Medicare beneficiaries. Under the Lantern system, the State Health Plan will pay a rate between these two extremes, generating savings while still ensuring access to quality care.
How the Lantern Program Works
The Lantern program operates by creating a network of surgeons with proven clinical track records. Not all surgeons within the Novant Health system will participate in the Lantern network, and members are not required to utilize the program. However, those who choose to do so can avoid out-of-pocket costs for eligible procedures. The initial surgical specialties included in the partnership are orthopedics, spine, bariatrics, general surgery, heart and vascular care, and women’s services.
Thomas Friedman, the State Health Plan’s executive administrator, highlighted the financial burden many members currently face. He noted that members often pay between $5,000 and $10,000 in deductibles for surgeries, representing a substantial portion of their annual income. Friedman also pointed out that the program addresses the challenge of members lacking the time and resources to thoroughly research the best physicians, alleviating concerns that “free meant bad.”
Expansion and Future Plans
While Novant Health has a strong presence in the Triad, Charlotte, and Wilmington areas, the State Health Plan recognizes the need for broader access, particularly in the Triangle region where most members reside. Lantern anticipates announcing a similar partnership with a healthcare system in the Raleigh-Durham area, though details remain undisclosed. Duke University, UNC Health, and WakeMed currently dominate the surgical market in that region.
North Carolina’s adoption of the Lantern program is gaining momentum. The program has already been implemented in Alaska and Florida, but Waterfield believes North Carolina’s program is poised for faster growth due to the commitment of Treasurer Briner and Administrator Friedman. As of Tuesday, 1,873 members had enrolled in the program, and 378 procedures had been completed, according to WECT News.
Lantern, which rebranded from Employer Direct Healthcare in 2024, has secured significant investment, receiving $92 million in capital in late 2023 from New York-based Insight Partners, valuing the company at $1 billion. Additional investors include Dundon Capital, owned by Carolina Hurricanes owner Tom Dundon.
Disclaimer: This article provides information about healthcare benefits and is not a substitute for professional medical or financial advice.
The State Health Plan and Novant Health will continue to monitor the program’s progress and assess opportunities for further expansion. The next update on enrollment and cost savings is expected in the fall of 2026. Share your thoughts on this new partnership in the comments below.
