Bankole Thompson

The Detroit News

Mayor Mike Duggan makes a good argument in his campaign to get insurance rates lowered in Detroit but the resistance is strong. It will take more than tough talk to get his plan through.

“We know what the problems are,” Duggan said in his 2017 state of the city address, calling out the health care industry for the bloated insurance premiums in Detroit.

“The hospitals in the medical community are charging triple what they’re getting from Blue Cross in those rates,” Duggan said. “The insurance companies are doing fine. The lawyers are doing fine. The hospitals are doing fine and all of us are paying the bill.”

But that is not correct, according to Conrad L. Mallett Jr., a staunch supporter of Duggan and the chief administration officer of the Detroit Medical Center and the interim CEO for Huron Valley-Sinai Hospital in Commerce Township.

“This is not a family fight. It is an intellectual disagreement,” Mallett said in an interview. “If it is true and we remain convinced that the cost of insurance in Detroit is directly related to the high cost of health care, we will put together a close network of quality and ethical health providers to run a pilot program to see how the cost of care goes down.”

But for now Mallett said, “We are not convinced that the cost of care that people receive at the end of the day is what drives up the insurance premiums. This is not a situation where the hospitals are charging abhorrent fees. There is a standard care you receive as an accident victim.”

Duggan has been aggressively pushing for reform of the state’s no-fault laws to reduce high cost of auto insurance rates in Detroit. He announced plans for a D-Insurance during his first run for mayor during a town hall at the downtown campus of Wayne County Community College District.

Since then the plan has run into some bumps because it places a cap on injury protection for accident victims. The current law provides unlimited injury protection.

However, some lawmakers in Lansing, including state Rep. Tom Leonard, the speaker of the House, have expressed willingness to tackle the issue. And the mayor’s point man on the issue Melvin “Butch” Hollowell said the administration has been having a productive dialogue with the speaker.

Mallett, a former chief justice of the Michigan Supreme Court, said while legislation would be the final product of the effort toward insurance reform, there shouldn’t be any rush.

He also dismissed a 2015 study by Pinnacle Actuarial Resources commissioned by the mayor to show how much Detroit residents are paying for insurance compared to their suburban counterparts and the implications of health care costs involved.

“You don’t need a study. With all due respect to Hollowell and the mayor, the people who can do this are right here,” Mallett said arguing for a pilot program that could run for 18 months to show that health care costs can be contained.

“More than 80 percent of our employees live in the city. We don’t think that Detroit-based health industry should pay the cost,” Mallett said. “The hospital community is not ready to accept that we are the source of the automotive insurance companies threatened profit.”

Laura Appel, senior vice president and chief innovation officer at the Michigan Health and Hospital Association, which represents 133 community hospitals in the state, agreed that blaming the healthcare industry is misplaced.

“Hospital charges are not based on a person’s zip code. Hospitals charge auto accident victims the same amount regardless of where they live,” Appel said. “However what’s accepted payment for services rendered at hospitals differs from payer to payer.”

Appel called for a conversation about what is driving the cost of premiums instead of resorting to the blame game.

“For the residents of Detroit who are at the heart of this debate, we must address the true drivers of higher premiums and pursue solutions that will not risk accident survivors access to needed care and services,” Appel said.

She said the hospital association is willing to discuss responsible meaningful reforms but that “it is important to note that our hospitals are united around a single goal: provide the safest, highest quality care to every patient that comes through our doors including those injured in auto accidents.”

Appel also faulted the D-Insurance plan.

“Detroit drivers would have faced significant limits on their medical benefits should they or their family members be catastrophically injured in an auto accident,” Appel said. “However there was never any proof in that proposal or any other efforts to reform Michigan’s auto no-fault system that sacrificing benefits would guarantee that insurance rates would go down and stay down.”

Mary Zatina, senior vice president of government relations and community affairs for Beaumont Health, said any reform will require a delicate balance between access to care and reducing premiums.

“We remain committed to seeking a solution to bring down the cost of auto insurance, yet ensure that everyone has access to care,” Zatina said. “Without the auto no-fault system, auto accident patients may not receive proper care after such a traumatic event because they would fret cost over care.”

Adding, “For those affected by an auto injury, they deserve a full chance at recovery and a full chance at living as productively as possible.”

Mallett said, “We are not for overcharging the system. We would be glad to put together this close network of a pilot program to evaluate cost savings. But after we do that, what is the guarantee from the insurance industry that they will bring down premiums?”

bankole@bankolethompson.com

Twitter: @bankieT

The writer hosts “Redline with Bankole Thompson,” which is broadcast at noon weekdays on Super Station 910AM. This column appears Mondays and Thursdays.