The hospital system that serves Moore County and much of the Sandhills is sounding a serious alarm. Executives from FirstHealth of the Carolinas told a North Carolina legislative oversight committee this week that federal spending cuts could push the nonprofit hospital system toward operating losses within six years — a development that could affect care for thousands of residents across the region.
What FirstHealth Executives Said
FirstHealth CFO Autumn McFann testified before the committee on Tuesday, warning that the federal One Big Beautiful Bill — also known as H.R. 1 — has put the system on a financial course that leads to operating losses by fiscal year 2031-32. A chart presented to the panel showed operating income rising in 2027 before declining steadily over the following five years.
“We can’t let that happen, we’re not going to let that happen,” McFann told lawmakers.
For context, FirstHealth reported nearly $1.2 billion in revenue and $82.2 million in net income in fiscal year 2023-24. The system typically operates on a roughly 3 percent margin — thin by most standards, but enough to fund reinvestment in staff, facilities, and technology.
The Federal Cuts Driving the Concern
The One Big Beautiful Bill includes significant Medicaid cuts that health advocates and some lawmakers — including North Carolina U.S. Sen. Thom Tillis — have warned could undermine rural hospital finances. For FirstHealth, Medicare makes up about 56 percent of revenues, while Medicaid accounts for roughly 13.6 percent. Both programs are government-funded, which means federal policy changes hit the bottom line directly.
McFann and FirstHealth Chief Strategy Officer Amy Graham came to the committee with a specific ask: don’t make things worse at the state level. One potential harm on the table in Raleigh is a reduction to the property tax exemption that nonprofit hospitals currently receive. A House select committee has floated a draft bill that would cut the existing full exemption to 50 percent of a hospital’s appraised value. McFann called any reduction “a direct hit to a bottom line that is already declining.” That committee meets again on April 15th.
Why This Matters for the Sandhills
FirstHealth isn’t just Moore County’s hospital — it’s one of the region’s largest employers and serves patients across Richmond, Hoke, and Montgomery counties as well. The system recently broke ground on a new $43.2 million Montgomery Memorial Hospital in Troy, signaling long-term investment in the region.
Despite the financial headwinds, FirstHealth holds a strong AA bond rating from Fitch Ratings, which affirmed the rating earlier this year. Fitch noted that FirstHealth has a strong financial profile and should be able to maintain solid operating margins — but acknowledged headwinds from H.R. 1.
The situation bears watching closely, particularly as state legislators prepare to weigh in on property tax policy for nonprofit hospitals. Southern Pines, Pinehurst, Aberdeen, and communities across the Sandhills depend on Moore Regional for emergency care, specialty services, and everyday health needs.
Stay with Star 102.5 and Sandhills News for continued coverage as this story develops. We’re keeping you connected to the Pulse of the Pines.
