Coalition: Lawmakers should target rising health costs

Karen Bouffard
The Detroit News
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Rising health care costs have undermined Michigan’s economic recovery and should be a higher priority for lawmakers, according to a report released Monday by a coalition of business and labor leaders.

The Economic Alliance for Michigan analyzed government data and the findings of more than two-dozen economic studies and concluded that spending on health care has diminished investment in other important sectors of the economy both across the United States and in Michigan.

The analysis found that health care spending in Metro Detroit rose 59 percent between 2007 and 2013, according to U.S. Bureau of Labor Statistics data. By comparison, spending on entertainment grew 13 percent during the same period, spending on household furnishings grew 4 percent, and spending on apparel and services declined 15 percent.

Economic Alliance President Bret Jackson said rising health care costs impose a burden on middle-class workers and restrict employers’ ability to create jobs. The Alliance includes small, medium and large employers, and unions such as the United Auto Workers.

Based on data from the federal Agency for Healthcare Research and Quality, rising health care costs mean that for every four employees making $45,000 annually, an employer spends more than $46,000 on health insurance, according to the report.

“If I have four employees on my payroll, I’m really paying for a fifth,” Jackson said.

“Employers are not the only ones carrying the health care cost burden. The modest increase we’ve seen in (workers’) wages has been devoured by health care cost sharing. With premium sharing and out-of-pocket costs, people spend more money now than they did in 2000.”

The Economic Alliance issued a “call-to-action” urging Gov. Rick Snyder and state legislators to slow health care spending in Michigan. Steps could include measures to improve health care quality and reduce the rate of hospital-acquired infections.

“We really don’t seem to have health care costs top-of-mind,” Jackson said. “There’s so much more we could do, and there isn’t the urgency (proportionate to) how it effects the economy.”

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