Don't Tamper With Proven CON Tool

September 28, 2004
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Grand Rapids Business Journal this week reports extensively on a topic clearly of top priority to businesses, here and across the country. The Employers' Association in Grand Rapids and the Alliance for Health collected new survey data reflecting the fifth consecutive year of double-digit premium increases in 2004, with employers shifting more of the rising costs to employees. The price of health-care benefits increased 11.5 percent again this year, an average across all plans and after employers altered those plans in an effort to mitigate the increases. Last year the increases averaged 10.4 percent. The average cost of a health plan in West Michigan has risen at a compounded rate of 75 percent. Steelcase, in its quarterly report last week, specifically noted "new challenges" as "rising steel, energy and health care costs, putting additional pressure on the economic recovery."

The issue and hand-wringing of what to do is discussed in every corridor, and was one of the three topics given specific debate between legislators and business owners Sept. 17, during the Michigan Chamber's annual Future Forum. One particular state program is lauded as a significant contributor to Michigan's ability to keep increases below those experienced by other states: the Certificate of Need process — the one that lame-duck session legislators are actually targeting for dismantling. The Michigan process is supported by business, consumer, hospital, labor and other groups from across the state.

No such agreement exists in any other quarter of the health-care debate. Surveys conducted by Grand Rapids Business Journal and Crain's Detroit Business provided stark differences in how east or west Michigan business owners would strike at the issue of rising benefit costs, which certainly predicts a legislative battle along the same lines. West Michigan survey respondents cite personal health habits as the top challenge; east Michigan respondents in the seven-county Detroit metro area listed uncompensated costs as the top issue.  It was no surprise to hear State Sen. Bill Hardiman address the entire session about the impact of personal responsibility and educating the work force in regard to the savings to be gained. One could also ask legislators to take responsibility for the true cost of benefits to Medicare recipients. Further, Sen. Hardiman did not hear the presentation from Hospice of Michigan's Dottie Deremo, who provided the immediate future timeline of health care costs associated with Michigan's aging population. "In the history of the world, there has never been this number of elderly. And all our systems are based on a young population," she noted. More worrisome: the significantly lower number of younger caregivers — family members — who are and will take a tidal wave of time from employers as they become increasingly involved in helping older family members.

However, Michigan lawmakers view constituent information, the fact is that the Certificate of Need process has widespread support for its proven ability to hold costs and improve access, particularly in rural areas, while limiting duplication. The Big 3 automakers each analyzed their respective health cost data and independently, all three found cots were consistently lower in CON states versus non-CON states. All three used different analytical approaches.

The process was given national prominence when David Stockman, R-St. Joseph, as Director of the Office of Management and Budget, assisted President Ronald Reagan in implementing Health Systems Agencies across the country.

Legislators should be warned against any effort to tamper with the process proven to be most vital in containing costs. It is one of the few weapons proven in Michigan to combat the unending acceleration of costs.    

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