The following statement can be attributed to Brian Peters, CEO of the Michigan Health & Hospital Association.
Today’s Michigan Healthcare Purchaser’s Coalition publication on hospital margins is just another attempt by a secretive special interest group, hiding behind the veil of claiming to represent the employer community at large, to smear hospitals for being able to keep their doors open. Hospitals are committed to providing safe, high quality, affordable care in every community they serve. Hospitals save lives and put patients first – not profits. Hospitals have and continue to welcome conversations with actual employers, large and small, community members and legitimate business groups about healthcare pricing, access and quality so that they can work together on solutions, rather than spending time responding to blatantly misleading reports like this one.
Not only is this report published by a group that does not disclose on its website who is funding it or who it claims as members (or what their profit margins are), but its methodology based on the National Academy for State Health Policy’s Hospital Cost Tool is flawed. This report does not use the industry-standard method for calculating operating margins; it fails to account for costs associated with running a hospital. In the latest RAND Hospital Price Transparency study, Michigan has the third lowest average commercial price relative to Medicare in the entire country and one of just five states with case mix-adjusted hospital prices below 200% of Medicare prices. Lastly, the Kaiser Family Foundation in December 2024 published a study which found Michigan was one of only four states in the country where hospitals had, on average, a negative margin.
As always, we welcome open and transparent conversations about what is driving hospitals’ cost structures, such as:
- Good workers who can take care of you and save your life demand, and deserve, high wages. According to Lightcast data, advertised salaries for registered nurses have grown 26.6% faster than the rate of inflation over the past four years.
- People are sicker and need more care. Emergency department visits related to heart failure increased 126.7% per capita between 2010 and 2019, with associated spending growing 177.2%.
- Medicare reimbursement continues to lag behind inflation — covering just 83 cents for every dollar spent by hospitals in 2023, resulting in over $100 billion in underpayments, according to the American Hospital Association (AHA) analysis of AHA Annual Survey data. Comparing commercial prices to government reimbursement, which has almost never even come close to covering what it costs a hospital to deliver that care, is irresponsible and misleading.
If the Michigan Healthcare Purchaser’s Coalition wants a transparent conversation about the price of healthcare, we again extend an invitation to their leadership and members, whoever they are, to have a solutions-focused dialogue together. Unfortunately, their continued public attacks using bad information indicates their true intention isn’t more affordable healthcare; it’s to bash community hospitals and the 220,000 workers taking care of Michigan patients.