I donāt know, Professor. Because in Michigan, itās, illegal to find out.
Your employer,
@UMich lobbies the state to keep it that way.
Michigan has āCertificate of Needā laws. Sounds bureaucratic. Itās not.
Itās a permission slip system where health systems get to decide if their competitors can exist.
Want to open a clinic?
Nursing home?
surgery center?
Imaging center?
You need permission from a state commission, staffed by representatives from existing health systems and the carriers.
Want to add an Operating Room to compete?
Same commission.
Same conflicts.
Want to offer a new service?
Youāre asking your competitors for permission.
The university, your employer, aquired hundreds of independent physician practices across Michigan
It has used CON laws to block new competing facilities from opening
It converted the practices, so now they bill at Health Systems rates and easily raised prices 5x overnight.
Just acquired Sparrow Health System in 2023, making U of M a $7 billion organization.
Same doctor.
Same procedure.
Same building sometimes.
Different owner.
Different price.
Not because the quality changed. Because the competition was made illegal.
University of Michigan Health now generates $7 billion in annual revenue across 200+ care sites statewide.
They pay zero property taxes on 3.5 million square feet of real estate.
Theyāve issued $3.2 billion in tax-exempt bonds meaning Michigan taxpayers subsidize their construction costs.
They receive hundreds of millions in Medicaid supplemental payments (DSH, GME, UPL) every year.
And hereās the kicker:
According to the Lown Institute, U of M Health has a $284 million fair share deficit.
That means the tax breaks they receive exceed the charity care they provide by $284 million.
University of Michigan is a $7 billion tax-exempt empire that uses government power to eliminate competition, then calls it healthcare.
One more thing:
U of M Health operates 340 contracts with 340B pharmacies.
The 340B program was created by Congress to help safety-net hospitals serve poor patients.
The University buy drugs at a discount, then are supposed to pass those savings to patients.
U of M turned it into a profit center with 340 locations.
The discounts donāt go to patients.
They go into the $7 billion revenue pile.
So back to your question, Professor:
āWill giving people money instead of insurance subsidies lead to better functioning markets?ā
I donāt know. Because in Michigan, itās illegal to find out.
Your employer, now a $7 billion organization lobbies to maintain Certificate of Need laws that make it a crime for physicians to compete on price, quality, or service.
Iāve built health plans with no copays, no deductibles, no prior authorizations.
Direct contracts between employers and physicians.
Transparent pricing.
Bundled payments.
They work. Prices drop 30-40%. Quality goes up. Premiums go down. Patients love them.
So before you lecture Americans about āadverse selectionā and āmarket failure,ā maybe explain why the University of Michigan gets to use state violence to prevent markets from existing in the first place.
Youāre not teaching economics, Professor.
Youāre teaching people how to defend a monopoly while collecting a paycheck from it.
Econ 101 midterm question: Based on what you know about risk pools and adverse selection in healthcare markets, will giving people money instead of giving them money to buy health insurance lead these markets to function more effectively, or will it just lead more people to be uninsured?