July 30, 2003

Michigan Department of Community Health Director, Janet Olszewski, and the members of the Detroit Health Care Stabilization Workgroup today presented Governor Jennifer M. Granholm with their report outlining strategies and solutions to address the health care needs in Detroit.  The report, “Strengthening the Safety Net in Detroit and Wayne County,” can be found online at www.michigan.gov/mdch. 

Governor Granholm established the Detroit Health Care Stabilization Workgroup, chaired by Director Olszewski, in April of 2003 to address the health care needs, particularly those of Medicaid beneficiaries and the uninsured, in Detroit and Wayne County and to make recommendations for both short term and long term solutions. 

“I welcome the findings and recommendations of the workgroup and am committed to continuing our efforts to improve access to quality health care for the citizens of Southeast Michigan,” said Governor Granholm.  “I would like to thank the many dedicated individuals who gave of their time and skill to come to the table and find workable solutions on this vital issue.”

The Detroit Health Care Stabilization Workgroup recommends the immediate establishment of a health authority for the City of Detroit and Wayne County.  If agreed to, this could be accomplished through an intergovernmental agreement with the State, County and City.  The goal of the Detroit-Wayne County Health Authority is to provide a seamless system of care through a more effective and efficient delivery system that will improve the health of the public, decrease the cost of care and add value to the areas of the health service delivery system.  This could be done by:
• Establishing a defined and accountable set of resources and services to care for the target population.
• Expanding the number and location of primary care access points to serve the target population.
• Assigning every enrolled client a primary care medical home to facilitate access to the full continuum of care based on patient needs so clients receive the right level of care at the right time in the right place.
• Coordinating and integrating service delivery between and among authority health care providers to eliminate fragmentation and reduce cost.
• Providing care management and referral services as a core component of the delivery system to facilitate access to a full range of culturally competent preventive health, medical and non-medical services.  All clients will be enrolled and care tracked.
• Delivery system design that is able to enhance federal and other funding and reduce duplication. 

“One of our first steps in the workgroup process was to examine the safety net models from other urban areas such as Chicago, Denver and St. Louis and see how we could apply the successful components of their plans in the City of Detroit and Wayne County,” said Olszewski.  “From our review of these models we know that bringing the public and private sectors together to address Medicaid issues and creating a health authority will help improve the quality, access and coordination of care while maximizing funding for safety net services.  This continued collaboration is critical to the success of health care reform.”

The Detroit-Wayne County Health Authority would seek to serve a broad base of the population in the city of Detroit and Wayne County, with a particular emphasis placed on the uninsured and Medicaid populations.  The Detroit-Wayne County Health Authority would provide access to care for individuals through a delivery system of primary care facilities that will coordinate preventive, primary and specialty care programs.  An information and referral network would be linked to community organizations, churches, synagogues, mosques, schools and other groups. 

A Governing Board would be established, with representatives appointed from the City, County and State.  An advisory board of key non-governmental stakeholders, including consumers, would provide counsel to the Governing Board. 

The Workgroup has determined that ultimately stabilizing the health care system in Detroit and Wayne County may require an infusion of an additional $246 million annually.  Adopting a Detroit-Wayne County Health Authority is the most promising solution to the under funding problem because it could create a mechanism that leverages current local government spending with federal matching funds.  These additional leveraged funds could then be used as higher payments for ambulatory and hospital care.  The Detroit-Wayne County Health Authority could be funded through a mix of federal, state, and philanthropic funding and patient fees.  The Detroit-Wayne County Health Authority would also make more efficient use of existing funds. 

The Detroit-Wayne County Health Authority could play a unique role in redefining the underlying approach to how preventive and primary care is provided in Wayne County.  The Detroit-Wayne County Health Authority can bring focus to improvements in quality and cost that are impossible in the current system.  Among the expected improvements are:
• Improved administrative efficiencies
• Maximizing federal match funds
• Increasing quality by extending best clinical practices across the delivery system with a goal of reducing overuse, misuse and waste. 
• Enhanced funding for services such as school-based health centers and other community-based services.

The Detroit Health Care Stabilization Workgroup also recommends that Michigan should develop public and private strategies to improve Medicaid provider rates.  The high concentration of uninsured and Medicaid eligible residents in Wayne County causes instability in the financing of the health care system.  A solution must finance a safety net that provides high quality, cost effective health services for the uninsured and persons receiving coverage through the state or county insurance programs. 

The need for health care reform in Detroit and Wayne County is clear.  Detroit’s population has higher rates of illness and chronic disease than other parts of the state and there is a lack of primary care opportunities and health care professionals in the area.  Approximately 60 percent of Wayne County residents reside in a medically underserved area, compared to 8 percent in Oakland County and zero percent in Macomb County.  This inadequate access to primary care can result in individuals seeking routine care in expensive emergency room settings. 

Detroit has higher rates of uninsured and low-income individuals than the rest of the state.  Average income in Detroit is $22,356 while the statewide average is $41,187.  In Detroit, 22 percent of residents are uninsured compared to 11 percent statewide, and more than 52 percent of Detroit residents are either uninsured or Medicaid eligible compared to 22.5 percent statewide.  Only 35 percent of Detroit’s residents have commercial insurance compared to 63 percent statewide. 

Additional economic factors have played roles in the current health care crisis.  Medicare funding has been reduced as a result of the Balanced Budget Act of 1997, under funding in the Medicaid program, and reductions in hospital investment income that is often used to subsidize the care of the uninsured as a result of the economic downturn. 

Recently Governor Granholm, Wayne County Executive Ficano and Detroit Mayor Kilpatrick signed an agreement with the Detroit Medical Center to ensure the continuation of services at Detroit Receiving and Hutzel Women’s hospitals.  That agreement was a separate process from the work of the Detroit Health Care Stabilization Workgroup.  If the Detroit-Wayne County Health Authority is agreed upon, it will work closely with the Detroit Medical Center oversight body to ensure that their safety net services become an integral component of the Health Authority’s delivery system network. 

If the Detroit-Wayne County Health Authority is agreed upon and approved by the State of Michigan, Wayne County and City of Detroit, it could be in place as soon as the end of the current calendar year. 

The Detroit Health Care Stabilization Workgroup includes members from Detroit area health systems, the City of Detroit, Wayne County, Detroit Renaissance, the Greater Detroit Area Health Council, Blue Cross Blue Shield of Michigan, Wayne State University, the University of Michigan, Michigan State University, the Wayne County Medical Society and other organizations. 

Gail Warden, former President and CEO of Henry Ford Health System, led the sub-committee on the health authority and will now serve as a Special Advisor to Director Olszewski focused on the potential implementation steps needed to form an authority.