Detroit News Series of Editorials Examines Causes Behind and Solutions for Rising Health Care Costs

The Detroit News this week ran a series of editorials addressing the increasing cost of health insurance premiums and what can be done to "reverse the trend." The following briefly summarizes the series.

• "Curbing Health Care Costs Key to Michigan's Growth": The first editorial in the series, which began June 9, says that the "strong presence of organized labor" is the main reason "why rising insurance costs have not cost Michigan employees their medical benefits." However, the News says that such "generous and secure health care coverage" has become a "severe liability." High medical premiums have made Michigan one of the most expensive states in the nation for employers to conduct business. As a result, the editorial concludes: "Taming rising health care costs must become an immediate -- and top -- priority" (Detroit News, 6/9).
• "Unions, Blue Cross Help Fuel State's High Health Costs": The June 10 editorial notes that Michigan's health care costs are rising because of "unfettered demand for health care" created by unions' collective bargaining power and Blue Cross and Blue Shield of Michigan's "dominance in the market." Unions have successfully "extract[ed]" more benefits from employers, while Blue Cross has used its not-for-profit status to depress premiums, making it difficult for other insurers to compete. With such market dominance, Blue Cross has "more freedom to raise prices," the News reports. To keep "spiralling health costs" from impacting the state's economy, "state politicians will have to confront powerful interests such as the unions and Blue Cross," the News concludes (Detroit News, 6/10).
• "Competition Best Means to Control Health Costs": The country's system of third-party payer health coverage has largely "free[d] patients from concerns about the cost of care" and has "freed doctors and hospitals ... from competing for consumer dollars," the News says in the third editorial in the series. Such a system has resulted in "an overpriced medical industry that is notoriously inefficient and wasteful." To reduce waste without "compromising care," health services should be subject to price competition. This would give patients an "incentive to shop around for the most cost-effective providers." For such an "overhaul" of the system, federal and state regulations that prevent patients from purchasing their own health care coverage need to be reformed, the editorial concludes (Detroit News, 6/11). The editorial was accompanied by an opinion piece by Gail Warden, president and CEO of Henry Ford Health System, who wrote that "reducing drug prices, reducing the labor shortage and improving core processes" can help cut health care costs (Warden, Detroit News, 6/11).
• "Give Patients More Control to Cut Health Costs": The final editorial in the series advocates for the implementation of a designed contribution system. Such an approach would "ask [patients] to choose from a menu of coverage options and become actively involved in managing their own health care expenses." At the same time, doctors and hospitals would not be held to "insurance company dictates," compelling them to "compete for patient dollars." A defined contribution system would "force providers to compete for patient dollars, bringing price competition to an industry where none currently exists," the News says (Detroit News, 6/12).