Michigan Health Care: A Strategic Assessment Brian Peters Senior Corporate Vice President Michigan Health & Hospital Association June 6, 2007.
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Michigan Health Care: A Strategic Assessment
Brian Peters
Senior Corporate Vice President
Michigan Health & Hospital Association
June 6, 2007
MHA Membership
146 charitable, nonprofit community hospitals (consolidation: down from over 200 in 1980s)
Small, rural facilities to large urban systems in every corner of state
Governed by volunteer board from communityOpen 24/7/365 to everyone, regardless of
ability to pay ($110 million in charity care and $440 million in bad debt in 2005)
MHA Membership
“Hospitals should be run more like business.”
- Alfred P. Sloan, 1955
Hospitals and Other Businesses
SimilaritiesHeavy government regulation (DCH, JCAHO,
CMS, NRC, etc.)Unionized labor force Exposure to liability (defensive medicine)Intense competition for market shareTrend towards mergers/systemization
Hospitals and Other Businesses
Differences Information gap: traditionally no “Consumers Report”
for hospitals/health care Existence of third-party (insurer) insulates “customer”
(patient) from true cost of care Different “customers” pay different rates, and many
don’t pay at all Key decision-maker (physician) is typically not
employed by hospital, and financial incentives are often misaligned between physician and hospital
CON law – supported by MHA, business, and labor
Michigan’s Political Climate
• Gov. Granholm re-elected
• Attorney General Cox re-elected
• Supreme Court: conservative majority maintained
• Senate
– Republicans control 21 to 17 (lost one seat)
– New Majority Leader: Mike Bishop (R-Rochester)
• House
– Democrats control 58 to 52
– New Speaker: Andy Dillon (D-Redford)
Michigan’s Economic Crisis
• Inflation-Adjusted General Fund Revenues Below 1972 Level
• FY07: $940M deficit
• Single business tax (SBT) eliminated effective
12/31/07: $2 Billion loss in general fund revenue
• FY08: $1.4B deficit even if SBT fully replaced
Michigan’s Economic Crisis
• Inflation-Adjusted General Fund Revenues Below 1972 Level
• FY07: $940M deficit
• Single business tax (SBT) eliminated effective
12/31/07: $2 Billion loss in general fund revenue
• FY08: $1.4B deficit even if SBT fully replaced
• What do we want to be when we grow up?
Health Care: An Economic Engine
• Health care is the largest employment sector in Michigan
– 496,000 direct jobs
– 261,000 indirect and induced jobs
– $33.1 billion in wages, salaries, benefits
• Vision: Michigan as a world-class destination for health care
• A healthier workforce = lower health care costs = enhanced job creation/retention
Health Care: An Economic Engine
www.economicimpact.org
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Moore’s Law:Computer performance doublesevery 18 months.
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Metcalfe’s Law:The value of networks rises bythe square of the power of allcomputers attached to them.
Source: Gordon Moore, 1965 Bob Metcalfe, 1993
Powerful Change…….
The Results:
Telemedicine / Remote Robotic SurgeryNanotechnologyDrug DesignDigital SensorsMedical Tourism
Massive impact on size/scope of health care workforce
Medical Tourism
Coronary Angioplasty
$3,700
$35,000
Medical Tourism
Quality of Care
Vision:Michigan hospitals will lead the nation in patient safety and quality improvement practices.
Mission:The MHA Keystone Center for Patient Safety & Quality will expedite the translation of patient safety and quality evidence into practice.
Quality of Care
Keystone Partners:
•BCBSM $6 million grant (June 2006)
Quality of Care
MHA Keystone: ICU (March 2004-December 2005):• More than 1,700 lives saved• More than 84,000 excess hospital days avoided• More than $188 million saved
Quality of Care
Keystone Collaboratives:
•Intensive Care Unit (ICU)•Gift of Life (organ donation)•Hospital-Associated Infection •Stroke•Surgery (May 16 launch)•Emergency Department (in due diligence)•Obstetrics (in due diligence)
Community Health Improvement
Baseline survey of Michigan employers and individuals 10/06 telephone survey: 150 employers; 603 individuals “Low-hanging fruit” = support for wellness programs,
but low adoption rate Prevention & Wellness DVD
Detroit Chamber, Daimler-Chrysler, Pitney Bowes, Dow Chemical, others
Highlights success stories, provides resources for employers
Community Health Improvement
MHA Campaign for Smoke-Free Hospitals
Goal: 100% smoke-free campuses by January 1, 2008Create health care cost savings and improve quality of
care “Lead by Example” = reducing Michigan’s high smoking
rate is single most important public health issue
Community Health Improvement25% of hospitals have smoke-free campus today
50% of hospitals have committed to smoke-free campus by 1/1/08 deadline
25% actively investigating
Michigan Health Care: A Strategic Assessment
Brian Peters
Senior Corporate Vice President
Michigan Health & Hospital Association
June 6, 2007
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