Healthcare leaders and business executives at the roundtable warned that without meaningful reform, rising costs threaten both the mission of hospitals and the ability of employers to provide coverage for their workers.
“We believe this is the most important and pressing issue facing the state of Michigan, and frankly, our country today,” said Brian Peters, CEO of the Michigan Health & Hospital Association, whose members include all community hospitals in the state, including Michigan’s largest hospitals and health systems. “How do we provide access to high-quality care for all Michiganders, regardless of their socioeconomic status and geography? We want to make sure that the mission we have long had to provide that access to care is able to continue on into the future.”
For employers, healthcare costs are not an abstract policy debate, they are a material business expense.
“Most businesses see healthcare costs as a strategic issue. It’s the fastest growing line item or their biggest line item,” said Matt Elliott, founder of the consulting firm Blue Lake Ideas and former president of Bank of America Michigan.
Jim Holcomb, president and CEO of the Michigan Chamber of Commerce, echoed that concern, noting that nearly all his members offer health coverage and want to keep doing so even as costs climb.
“Providing healthcare coverage is a pride for our members,” Holcomb said. “Ninety-five percent of our members provide healthcare coverage. They want to keep doing that. It’s how we attract talent to the state. But to solve a lot of these problems, I think it’s going to take people coming together and having honest conversations.”
That strain shows up not only in corporate balance sheets, but also in workforce decisions, business expansion plans and employee stress levels, making healthcare affordability a shared concern across sectors.
The imperative to fix healthcare affordability
Healthcare affordability has emerged as one of the most consequential issues facing Michigan employers and healthcare leaders.
With per capita healthcare spending reaching over $9,000 a year and employers facing steady premium increases, leaders from Michigan’s largest health systems, insurers and business organizations say incremental fixes aren’t enough. The state’s healthcare financing model, shaped by decades of patches and political compromises, is straining hospitals, businesses and employees alike.
During a recent roundtable hosted by Crain’s Content Studio in partnership with the Michigan Health & Hospital Association, executives agreed: structural change is needed to solve healthcare affordability in the state.
“We need to have a reset, but it can't be incremental. It needs to be something that is truly transformational and accelerates us moving forward to have a working system,” said Tina Freese Decker, president and CEO of Corewell Health.
“We’ve got to take a different approach,” said Bob Riney, president and CEO of Henry Ford Health, who reinforced that change needs to ensure providers receive the appropriate level of reimbursement to maintain access to important services and that cost does not impede patients from having healthcare coverage and receiving care.
By Maria Castellucci | Crain’s Content Studio
Healthcare financing is very complex. Misperceptions and attempts to simplify the issue often result in hospitals being blamed as a primary driver of rising premiums.
In Michigan, just over 25% of Michigan’s total population is enrolled in Medicaid and 23% is enrolled in Medicare, according to Medicaid and Medicare enrollment analysis from the Michigan Health & Hospital Association. With nearly half of the state’s population tied to government programs, providers must manage rising labor, pharmaceutical and supply costs under reimbursement rates that are largely fixed. Medicare payments have not kept pace with inflation. In 2023,
Medicare reimbursed hospitals at just 83 cents for every dollar spent delivering care, according to the American Hospital Association, leaving providers to absorb the difference or shift costs elsewhere.
Bill Manns, president and CEO of Bronson Health, pushed back on the notion that hospitals drive premium increases. “We are price takers,” said Manns, referencing the fact that hospitals must negotiate rates with commercial insurance, while rates for Medicare and Medicaid are set by the federal government.
The forces driving healthcare costs in Michigan
Nowhere are affordability pressures more acute than in rural communities. Over the last decade, more than 100 rural hospitals have closed in the U.S., and in Michigan nine percent of rural hospitals are at risk of closing, according to the Center for Healthcare Quality and Payment Reform.
Rural hospitals face a difficult mix of challenges: limited negotiating power with health plans, high reliance on government payers, aging and sicker populations and infrastructure gaps including limited public transportation and lack of broadband access that make providing services such as telehealth difficult. Recruiting healthcare workers to rural communities is also a challenge.
“When rural hospitals have no margin, they have to make tough decisions about what programs their community can continue to receive,” said JJ Hodshire, president and CEO of Hillsdale Hospital, which serves rural communities. “With the aging and sicker population, we know it’s only going to get much more difficult for us in our industry unless we have some reform at the state and federal levels to recognize rural as unique.”
When rural hospitals struggle or close, the ripple effects extend far beyond healthcare, impacting economic development, workforce stability and access to care statewide. Proximity to hospital services is important for business recruitment and investment, tourism appeal and stability of the social safety net for important services like mental health and healthcare coverage. “As goes your community hospital, so goes your community,” Hodshire said.
Rural hospitals at a tipping point
Many panelists agreed that long-term affordability improvements hinge on shifting the healthcare system away from treating illness toward preventing it — a change that requires time, investment and alignment across sectors.
Michigan health systems have already made strides in adopting value-based care, which are payment models that reward improvements in health outcomes and cost savings rather than volume of services.
Henry Ford Health manages care for about 500,000 people under value-based arrangements, and the system has been able to demonstrate improvements in both cost and outcomes, Riney said.
Health system leaders also described investments in primary care, data analytics and patient engagement aimed at reducing avoidable emergency visits and hospitalizations.
Managing healthcare utilization starts with prevention of disease and helping patients better manage chronic conditions once they’re diagnosed, said Dr. David Miller, CEO of Michigan Medicine and executive vice president for medical affairs at the University of Michigan. Keeping employees healthy increases productivity and minimizes premium increases. He added that engaging patients through shared decision-making is also critical to improving outcomes and reducing avoidable costs.
“If you think about overall costs, it can be assessed as utilization times price, so this concept of utilization of healthcare services is one way where we can examine our role in how we provide care,” Miller said.
“There are multiple factors driving utilization, but one area where we have an opportunity is in preventive care. I think prevention both of disease in the first place through a focus on food insecurity or other social determinants of health, but also secondary prevention, can make a difference. We all know once patients have some diagnoses, whether congestive heart failure or chronic obstructive pulmonary disease (COPD) or others, there are ways that we can intervene from a medical perspective that can reduce the likelihood of progression, leading to expensive healthcare utilization. And that’s really our responsibility,” he added.
Prevention, value and rethinking incentives
Several of the participants called for fundamentally rethinking how healthcare is financed, delivered and prioritized to solve affordability challenges.
Riney argued that continuing to squeeze reimbursement and shift costs around won’t meaningfully improve affordability or outcomes, particularly in a state with an aging population, high rates of chronic disease and rising workforce pressures.
“We have to hit reset on the state’s health status and we’re not going to do that by continuing to try and ratchet down the reimbursement or not actually increase the reimbursement that’s desperately needed,” he said.
Riney called for a period of reimbursement increases in order to grow investment in primary and preventive care. This would require a longer-term view and a willingness among stakeholders to align incentives and accept shared accountability.
Resetting Michigan’s health status
Innovation — particularly technology-enabled care — has emerged as both a challenge and an opportunity.
Virtual care, remote monitoring and artificial intelligence offer promise for improving access and lowering costs, especially in rural areas. Riney pointed to an AI-enabled camera technology implemented at Henry Ford that helps prevent falls in hospital rooms, which reduces injuries and length of stay, benefiting patients while lowering long-term costs.
But panelists also cautioned that because innovation requires upfront investment, the policy environment needs to support that.
“For us to innovate, we need to make sure that we have policies that support reducing bureaucracy and red tape and allow us to try different things and succeed or fail at them at a small scale to see what works,” Freese Decker said.
Miller added that while innovation is underway in Michigan, sustaining it depends on creating the right conditions. “There’s great research and innovation happening in health systems across the state, but we have to create the environment where we can invest in that,” he said. “That comes back to the structural changes we’ve talked about. It also reflects the partnership concept.”
Innovation, technology and the long view
Throughout the discussion, one theme surfaced repeatedly: no single sector can solve the healthcare affordability crisis alone.
“Healthcare and business are so intertwined,” Freese Decker said. “Healthcare employs more than 220,000 people in the state. We are focused on how we are connected and serving the employees of businesses and partnering with the business community.”
Holcomb added that many employers want to be more engaged in solutions but lack visibility into how the system works or where their advocacy can be most effective.
“They’re seeing their bill come in and trying to figure out, ‘How do I do this?’” he said. “They want to be an active participant in helping to solve the problem, but there’s also education and information-sharing that needs to be had that doesn’t happen in a one-month period when we’re trying to pass an appropriations bill or a policy.”
The panelists agreed that the solution lies in sustained collaboration grounded in data, transparency and shared goals.
“We need to be inviting others to the table with civility in mind to say, ‘Let’s stay focused on that overall health outcome for the population as a whole and let’s start tackling some hard topics,’” Pallone said. “These are billion-dollar issues facing us and we need partnerships to solve those issues.”
Solutions based on data,
transparency and partnerships
As the roundtable concluded, panelists were candid about the scale of the challenge and the need for collaboration to make inroads.
“We acknowledge that we have an affordability issue in healthcare and we want to be partners in driving to long-term solutions together,” Striebich said. “The change that we need to achieve together needs to be transformational.”
For Michigan’s business community, the conversation reinforced that healthcare affordability is a shared challenge that impacts the state’s competitiveness and economic growth.
“We want to have a diverse economic ecosystem here in Michigan,” Holcomb said. “By working together, we can solve complex problems.”
Peters added that the urgency of rising costs and access challenges only reinforces the mission that healthcare organizations have long held in Michigan.
“We have a mission to advance the health of individuals and communities,” Peters said. “We are willing to work with any partner throughout the state who can bring their intellectual capital to this incredibly complex problem.”
A shared responsibility
Key themes from the roundtable
Affordability is a business issue. Costs affect hiring, growth and the workforce.
Incremental reform isn't enough. Leaders called for structural change.
Rising costs are met with fixed reimbursement. Inflation and government rates strain hospitals.
Rural hospitals are at risk. Hospital instability affects local economies and access.
Prevention over volume. Primary care and chronic disease management lower costs.
Innovation needs support. New care models require funding.
Partnership is critical. Cross-sector collaboration is essential for lasting reform.
Shannon D. Striebich, Trinity Health Michigan
Shannon D. Striebich is president and CEO of Trinity Health Michigan, leading nine hospitals and more than 400 care sites statewide. Since assuming the role in 2023, she has overseen major service expansions across the system. Striebich joined Trinity Health in 2003 and advanced through senior operational leadership roles. She serves on multiple boards and is an adjunct faculty member at the University of Detroit Mercy.
Bill Manns
Jim Holcomb
Jeremiah "JJ" Hodshire
Matt Elliott
Tina Freese Decker
Meet the panelists
Shannon D. Striebich
Bob Riney
Brian Peters
Dominick Pallone
David C. Miller
Several leaders pointed to broader forces pushing costs higher, including labor, pharmaceuticals, demographics and public policy.
Healthcare is a people-intensive industry, Riney said. While labor accounts for about 15% to 19% of expenses in many industries, it represents 56% of total expenses for hospitals, according to 2025 data from the American Hospital Association.
“I think that’s really not understood by individuals when they talk about affordability,” Riney said. “What all of us are doing is trying to work very hard at recruiting and retaining talent so that we are reducing any cost of turnover.”
At the same time, Michigan’s population is aging and carries higher rates of chronic disease than many other states, increasing utilization of healthcare services. By 2050, the population of children and young adults is projected to decline by six percent, the working-age population is expected to remain largely flat, and the number of Michiganders age 65 and older is forecast to grow by 30%, according to the Citizens Research Council of Michigan.
Medicare reimbursement lags behind inflation
In 2023
For every $1 spent by hospitals, 83 cents was covered by Medicare
The result: $100B in underpayments
From 2022 to 2024
Inflation
increases
Medicare net inpatient payment rates increase
14.1%
5.1%
Source: AHA Cost of Caring data
Bob Riney, Henry Ford Health
Bob Riney is president and CEO of Henry Ford Health and has spent more than 45 years with the organization. Appointed CEO in 2022, he has led major system growth initiatives and redevelopment projects, including the expansion of Henry Ford Health’s hospital footprint across Michigan. Riney previously served as chief operating officer and president of healthcare operations and serves on numerous civic and business boards.
Brian Peters, Michigan Health & Hospital Association
Brian Peters is CEO of the Michigan Health & Hospital Association, one of the nation’s largest state hospital associations. During his 35-year tenure, he has led advocacy and government relations on behalf of Michigan hospitals. Peters serves on numerous state and national boards and is a frequent spokesperson on healthcare policy. He holds degrees from the University of Michigan and Michigan State University.
Dominick Pallone, Michigan Association of Health Plans
Dominick Pallone is executive director of the Michigan Association of Health Plans, representing health plans covering more than 4 million Michigan residents. Prior to joining MAHP, he was a partner at a Lansing-based lobbying firm specializing in healthcare and state policy. He previously served on staff in both the Michigan House and Senate. Pallone holds a bachelor’s degree in international relations from Michigan State University.
David C. Miller, MD, MPH, Michigan Medicine
David C. Miller is CEO of Michigan Medicine and executive vice president for medical affairs at the University of Michigan. He leads the organization’s clinical, research and educational missions. Previously, he served as executive vice dean for clinical affairs and president of U-M Health. A practicing urologist, Miller is also a professor of urology and former director of the Michigan Urological Surgery Improvement Collaborative.
Bill Manns, Bronson Healthcare
Bill Manns is president and CEO of Bronson Healthcare, the largest employer and health system in southwest Michigan. Since joining Bronson in 2020, he has led the organization to national recognition for clinical quality and workplace excellence. Manns has more than 30 years of healthcare leadership experience and holds degrees from the University of Michigan. He serves on multiple healthcare, business and community boards.
Jim Holcomb, Michigan Chamber of Commerce
Jim Holcomb is president and CEO of the Michigan Chamber of Commerce, leading efforts to strengthen Michigan’s business climate. He joined the Chamber in 2008 and previously served as executive vice president and general counsel. A lawyer and former legislative staffer, Holcomb has more than 30 years of experience in state policy and government affairs. He holds degrees from Central Michigan University, Thomas Cooley Law School and the University of Michigan.
Jeremiah “JJ” Hodshire, Hillsdale Hospital
JJ Hodshire is president and CEO of Hillsdale Hospital, where he has served since 2010. He became chief operating officer in 2019 and president and CEO in 2020. Hodshire hosts the Rural Health Today podcast and serves on the Michigan Health & Hospital Association board and councils. He holds degrees from Hillsdale College and Concordia University and is a certified manager and ordained minister.
Matt Elliott, Blue Lake Ideas
Matt Elliott is a strategic adviser, board director and former senior banking executive with more than 35 years of experience. A former Bank of America senior executive and Michigan president, he led large organizations through growth and transformation. He is founder of Blue Lake Ideas and advises leaders on aligning people, capital and strategy. Elliott holds an MBA from the University of Chicago and a bachelor’s degree from Michigan State University.
Tina Freese Decker, Corewell Health
Tina Freese Decker is president and CEO of Corewell Health, leading more than 60,000 team members across 21 hospitals, hundreds of outpatient sites and Priority Health. Previously, she held senior leadership roles at Spectrum Health and was named president and CEO in 2018. Decker holds degrees from Iowa State University and the University of Iowa and serves on several national and regional boards, including as immediate past chair of the American Hospital Association Board of Trustees.
“I don’t think anyone envisioned a $3 million gene therapy hitting the market, but here we are,” Pallone said.
The 340B program, established by Congress more than 30 years ago, helps hospitals manage prescription drug costs by requiring manufacturers to offer discounted prices to eligible providers, but its consistently under threat at the federal level. The Michigan Health & Hospital Association strongly supports 340B and is backing state legislation aimed at protecting the program in Michigan.
Despite these pressures, panelists stressed that Michigan delivers high-quality care at comparatively low cost. Michigan earned a commendable 10th-place ranking for healthcare access and affordability in the Commonwealth Fund’s 2025 Scorecard on State Health System Performance. Furthermore, the 2024 Hospital Price Transparency Study from RAND showed Michigan had the third lowest hospital prices relative to Medicare.
“Healthcare in Michigan is top notch,” Freese Decker said. “Our quality is on par or better than most states. And when you compare us on hospital prices, we’re the third lowest in the country. But it makes it even harder for us as healthcare organizations to provide that phenomenal care because of the constraints we face with reimbursement, lack of population growth and pharmaceutical spend.”
At Trinity Health Michigan, leadership has invested in programs designed to tackle non-medical factors that influence health, such as access to nutritious food before they escalate into costly medical problems.
Striebich described the system’s “food is medicine” program, which treats food insecurity as a clinical issue rather than a social afterthought. When patients are identified during their primary care visit as food insecure, the program provides medically tailored nutrition support as part of their care plan.
“This isn’t just a box of produce,” Striebich said. “This approach is medically developed with the patient. This is a prescription for your health.”
While programs like these are not always directly reimbursed, Striebich said Trinity Health views them as essential long-term investments that can reduce chronic disease, improve outcomes and ultimately lower costs for employers, insurers and patients alike.
“We believe that investing in these programs will drive the type of change that we really need,” she said.
“Our population trend is not working in our favor right now,” said Dominick Pallone, executive director of the Michigan Association of Health Plans, which represents nine health plans across Michigan. “Our population is older and growing into that older segment.”
Prescription drugs are another major driver of rising costs. Trinity Health Michigan spends more than $250 million annually on pharmaceuticals, according to president and CEO Shannon Striebich.
“From last year to this year, we experienced an 11% inflation factor just on drug costs,” she said. “Absorbing that level of inflation year over year is challenging.”
Without consistent reimbursement increases to offset these costs, hospitals continually look to increase cost-efficiencies, which can include reducing services lines or closing facilities altogether.
Pallone noted that pharmacy spending now accounts for as much as a quarter of premium dollars in some health plans, driven in part by breakthrough therapies that dramatically improve outcomes but carry seven-figure price tags.
That long-term perspective resonated with business leaders at the table, who said healthcare affordability can’t be addressed within election cycles or annual budget negotiations. They pointed to recent federal policy changes as an example of how short-term decisions can have lasting consequences.
Under the 2025 federal budget reconciliation law, Michigan — along with other states — must implement work requirements for Medicaid expansion adults by 2027. Beneficiaries would be required to document at least 80 hours per month of work, education or community service to maintain coverage. More than 200,000 Michiganders could lose health insurance if changes go into effect, according to a recent report from the Citizens Research Council of Michigan.
The Michigan Health & Hospital Association called the law “disastrous for access to care for Michiganders.” When Michiganders lose insurance, hospitals don’t stop caring for them. Without insurance, people tend to forgo preventive care for urgent care instead, which only further exacerbates the costs facing hospitals as that care is both more expensive to provide and uncompensated.
“In America, hospitals are the backstop,” Manns said. “You come to the emergency department, whether you’re hungry, whether you’re homeless, you’re seeking behavioral health treatment or for help with any other issue.”
jim Holcomb
Bob Riney
Dominick Pallone
Shannon Striebich
Bill Manns
David C. Miller
Tina Freese Decker
Brian Peters
How healthcare affordability is driving health and business leaders to call for structural change
Health system, business and insurance leaders push
for collaboration to protect access and rein in costs
Healthcare in Michigan accounts for
a year in tax revenue
Source: Michigan Health & Hospital Association
$23.6B
jobs
1 in 5
a year in total value
$106B
J.J. Hodshire
Nearly
Hospitals alone account for
a year in total value
$106B
in tax revenue, representing the largest healthcare sector in the state
$10.7B
