Health Care "Coopetition"

continued

“We are looking at using each other’s facilities,” Strong continues. “We are in conversations about whether we can commingle patients.” Those conversations, he adds, are unaffected by the recent steps to expand University Hospital into the former Mott Children’s Hospital. “We are eager to explore this experiment on behalf of the community.”

Reconsidering their longtime rivalry is one way that the hospitals are responding to an ever-tightening health-care market. “There was a feeling that health care was recession-proof, because if you’re sick you’re going to go to the hospital,” says Casalou. But during the recession, some people put off getting care. Others who got care couldn’t pay for it—Casalou says that despite the economic recovery, the percentage of unpaid care St. Joe’s provides is still rising. And many people fell back on Medicaid, the federal health insurance program for the poor.

But more patients insured by the government doesn’t always mean more money from the government. Michigan now has 1.9 million Medicaid patients, up from 1.3 million ten years ago, but state Medicaid appropriations are no higher than they were ten years ago. Another half-million Michigan residents could go on Medicaid in 2014, when the Affordable Care Act (aka Obamacare) expands eligibility rules. But the federal law provides extra funding for only two years, Casalou points out. After that, states are on their own. Further increasing the financial pressure, this summer the federal government will freeze payments for elderly patients insured by Medicare. Like a tree during a drought extending its roots, hospitals are looking at alternatives to survive.