• Health care costs are a leading concern for Michiganders, and they’re right to worry
• Over a generation, out-of-pocket costs and premiums are eating a larger slice of a household budget
• Who’s to blame? Depends on who you ask

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NEWPORT— A thin white scar runs from just below Debbie Watson’s throat to under her shirt, a reminder of the open heart surgery at 54.

The pink at her throat is damaged tissue from her months in a coma when she was 49. Her thumb and forefinger — gone. Amputated after sepsis nearly killed her. But what causes Watson the most pain these days is her health provider’s online patient portal. She slips her cell phone onto the kitchen table, scrolling to her latest bill. 

“Balance sent to collections,” says the health system’s app. “$1,902.89.”

“We are trying to collect a debt,” reads a debt collector’s paper notice sitting nearby. 

Another $45 is due “upon receipt,” reads a separate letter from a doctor.

“I realize I may never take vacations again. I won’t get a new car — I get it,” she said. “But they keep coming after me. Like they say, you can’t get blood from a turnip.”

Watson is one of an estimated 690,000 Michigan adults living with medical debt, according to KFF, a California-based research nonprofit focused on health care. That’s about 9% of the state’s adult population, in line with the national average.

Since the mid-1990s, the US health care industry has grown nearly five-fold, far outpacing median household income in Michigan, which has just more than doubled in that time.  

Insurance premiums for Michigan’s employer-sponsored health plans jumped 80% in less than a decade — from $3,646 in 2015 to $6,577 in 2024 according to the US Agency for Healthcare Research and Quality. And just this year, premiums on the healthcare.gov federal marketplace grew by more than 20%, driving an estimated 34,000 from the market and possibly forcing out more.

Meanwhile, drug costs — which now make up about 9% of the nation’s health care expenses — have increased three times faster than the rate of inflation since the mid 1980s.

Bridge Michigan readers this year identified health care as a top election concern, driven by rising costs, limited access and a lack of mental health resources. 

In fact, in the last 30 days, it’s most frequently cited issue in Bridge Listens, an unscientific effort to push 2026 candidates to address voter concerns

• Click here to vote in Bridge Listens

Adding to the anger: Hospitals are dropping services such as labor and delivery while investing billions of dollars in expansions or consolidations.

“In any city you go into, if there’s a construction crane in the air, it’s at a hospital or university, right?” state Rep. Mark Tisdel, R-Rochester Hills, said following an April hearing on medical debt.

Like Watson, more than 3% of Michigan residents have medical debts that have been turned over to collections, with a median debt in collections of $1,094, according to the Urban Institute, a Washington-based research nonprofit.

The reasons?

Insurers, drugmakers and hospitals blame each other for driving up costs.

Health systems say worker shortages drive up labor expenses. Doctors say student debt drives their demand for better pay. And nearly everyone blames layers of bureaucracy that require — in the words of MSU bioethicist Leonard Fleck — “an army of bureaucrats and lawyers” behind each layer of paperwork.

Moreover, all of this happens within a patchwork of public and private insurance policies, all with complex fine print, he said.

“As long as you want private health insurance that’s going to be provided by individual employers, you’re going to have all of this administrative complexity,” said Fleck.

Estimates vary on just how much administration is “wasteful” or duplicative, but it’s clear that Americans spend more on health care than other wealthy countries.

One 2019 report concluded that every three dollars in health care delivered to a patient requires an extra dollar in administrative costs. By eliminating the wasteful part of the spending, Americans could save at least $265 billion a year, according to the writers at the consulting firm McKinsey & Co.

Hospitals say they work on thin margins. Henry Ford Health reported a 1% margin for 2025; Corewell reported a 1.6% margin last year, according to one news report. And Livonia-based Trinity, which opened a $238-million hospital in Brighton in April to replace its aging facility, said it broke even.

Tisdel, in Lansing, doesn’t buy the pleas of poverty, given the changes in skylines around Michigan.

He is a long-time business owner specializing in medical equipment and also sits on the House finance and insurance committees.

Consider Henry Ford’s expansion project in downtown Detroit, he said.

The Detroit-based hospital is one of three partners in a $3 billion venture —  announced in 2023 — which will be anchored by a new 1.2 million square foot hospital that will include a 20-story patient tower. 

Henry Ford’s announcement came amid several years of big mergers and expansions: Beaumont in southeast Michigan and Spectrum on the west side of the state announced their partnership in 2022 to become the behemoth Corewell Health. The same year Michigan Medicine merged with Lansing-based Sparrow. Meanwhile MyMichigan, affiliated with Michigan Medicine, has continued to expand its footprint, in part, by buying other hospitals, including three struggling Ascension hospitals.

The last generation has marked a “dramatic and continuous trend of consolidation” in health care, according to a report by the US Department of Health and Human Services, released in the final days of the Biden administration. “It is now more concentrated than ever.”

“If you don’t have any money, where’s the money coming from — for these expansions?” Tisdel asked.

At least one hospital leader agrees with Tisdel.

“This is not the time today to be building buildings in health care,” said JJ Hodshire, president and CEO of Hillsdale Hospital.

Rural hospitals, especially, are often barely scraping by, often closing money-losing services, such as obstetrics or behavioral care, to keep the doors open. Patients face big bills. Some lack transportation to make their doctor’s appointment.

And on the horizon is the implementation of massive cuts in Medicaid — a lifeline for many hospitals, as provisions of last year’s “big beautiful bill” click into place.

“How awful is that — that we would gut essential, community-based needed services … and at the same time build a shiny new building?” said Hodshire, who also hosts a podcast, “Rural Health Today.”

What most Michiganders miss is that these new facilities are largely financed through philanthropy, and they replace aging structures that no longer meet today’s needs for technology and infection control, for example, or patient demands for private rooms, Brian Peters, CEO of the Michigan Health & Hospital Association, told Bridge.

(Editor’s note: The Michigan Health & Hospital Association is a sponsor of Bridge Michigan’s Health Watch newsletter. It had no role in the reporting, writing or editing of this article.) 

It’s not the first time Peters faced questions about shiny, new buildings by health systems that purport to be struggling. In fact, he wrote about it in February. “These reinvestments in new construction are about preserving access and modernizing care; not profit,” Peters wrote.

Hospitals have no choice but to continue to grow and expand to provide the highest quality care to a nation of people living longer with chronic disease than the rest of the globe, Peters and others told Bridge.

RELATED: 

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• Watch: Health care affordability in Michigan and what candidates plan to do about it

To measure health care only by dollars misses the point, said Dr. David Miller, CEO of Michigan Medicine at the University of Michigan.

“There’s the broader value question: What are the outcomes that are accomplished for those investments?” he said. “What are the impacts for avoidance of suffering or prolonging lives better lived?”

More new tech, no new babies

In Brighton in early April, Trinity leaders led a tour of the new hospital, a few weeks before it was set to open. It replaces the former Trinity hospital, whose thick cement walls no longer supported new technology, they said.

But while its brand new, multimillion-dollar MRI machines and other scanning equipment is installed and ready to go, the hospital will not deliver babies.

To do so would be irresponsible, both for patient care and for the system’s budget, said John O’Malley, president of Trinity Health Livingston and Trinity Health Medical Center-Brighton.

Birthing centers require round-the-clock staff, even on days when there are no births. Other southeast Michigan hospitals, including Trinity Health Ann Arbor Hospital, Michigan Medicine in Ann Arbor and Corewell’s Royal Oak hospital, are delivering babies, O’Malley noted.

It would be irresponsible to take on that kind of cost when other hospitals in Ann Arbor — 30 miles or so from Brighton —  are not only delivering babies, but also offering neonatal intensive care and the expertise that comes with a high-volume of deliveries, O’Malley said. 

To some extent, hospitals must pick and choose what services they offer, he said: “I’m not going to try to be something we’re not.”

A pile of uncertainty

Caught in this are patients whose unexpected expenses often hit when people are at their most vulnerable — while they’re facing life-threatening diagnoses, caregiving for elderly parents, trying to sort care for sick children, said Leslie Baldwin, of Holt.

She was 43 in 2009, and a program manager at the Texas Children’s Hospital, when she was diagnosed with Common Variable Immune Deficiency.

Susceptible to infection, Baldwin said she’d been in and out of emergency rooms and hospitals for years — sick with respiratory illness, pain and exhaustion.

Baldwin is on disability. For others, health problems can make it impossible, intermittently, to work, said Baldwin, cofounder of the Michigan Rare Coalition.

“Now on top of that is this pile of uncertainty: ‘Am I going to be able to afford this? I need to pay my rent. I need to be able to buy groceries. Am I going to be able to afford the extra money for supplemental insurance?’” 

DoRi Erlich, 34, and her husband, Louis, 43, said they spend hours each month trying to sort through bills and talking with insurers.

Both Erlichs are diabetic, so their lives are marked by a constant cycle of insulin, medications and supplies delivered to their Farmington Hills home, and the ensuing phone calls over paperwork and insurance, DoRi Erlich said.

“You were on the phone with the insurance, what? Two times this week?”, during an interview with Bridge.

Between 30% and 60% of people with diabetes face “financial toxicity” related to the diagnosis, with the costs of care and treatment eating up anywhere from 5% to 40% of household income, according to research by Dr. Minal Patel, of the University of Michigan.

“Health insurance was designed to reduce the risk of catastrophic health care, not to manage chronic disease,” Patel told Bridge Michigan.

Back at their Farmington Hills home, Louis corrected his wife about the insurance phone calls: “This week — three times,” he said.

“It’s a constant fight,” DoRi tells a Bridge reporter.

The concerns aren’t theoretical.

According to a 2024 Gallup poll, 12% of US adults, about 31 million Americans, reported they borrowed an estimated $74 billion that year to pay for health care for themselves or a household member. 

Or, to look at it from a wider lens: Michigan’s health expenditures were about 12% of the state’s gross domestic product in the mid 90s, as GenXers were settling into adulthood.

Now as they move toward retirement, health care makes up nearly 19% of the state’s GDP, at least according to 2020 federal data, the latest available.

For her part, Watson works out payment plans with hospitals and doctors offices, but she said she can’t keep up. Rent and insurance eat up more than half of her $1,488 disability check each month.

Add in utilities and gas for the car — a borrowed Ford Focus with 180,000 miles on it. She buys chicken breast on sale, and supplements groceries at the local food bank.

For Christmas, a son gave her a gift card for grooming services for Roscoe and Precious, who now sit at her feet.

“I don’t go out. I can’t afford it, and that’s alright,” she said. “They are my entertainment.”

Within this complicated system, hospitals, health systems and insurers must have negotiating power to survive — to demand the best prices and protect the bottom line.

Negotiating power requires size.

Surprise!

Indeed, Watson in Newport said she spends hours each week combing through medical bills and working with providers to set up payment plans.

And sometimes, she’s just baffled.

Among her charges are $147 — billing code “G0463” — for a “facility fee” each time she reports for one of her twice-monthly blood tests.

That’s because her laboratory is owned by ProMedica, a nonprofit health care system across the state line in Ohio with facilities in southeast Michigan.

Facility fees, or “clinic fees” are separate from the costs of the actual medical services. Rather, they’re intended to cover overhead costs. They may or may not be covered by insurance.

They also help offset hospitals’ operational costs, including 24/7 emergency and trauma care, according to the Michigan Health & Hospital Association. 

But some argue that the increasing frequency of facility fees are yet another piece of the larger picture as large systems snap up smaller hospitals and independent physician practices.

Some states have begun requiring providers to notify patients about facility fees. More than a dozen states have moved to ban facility fees altogether.

In March, State Reps. Curtis VanderWall, R-Ludington, and Reggie Miller, D-Van Buren, introduced a bill that would prohibit facility fees outside a hospital setting, beginning next year.

Medical debt, drug costs

The issue of medical debt has been taking center stage in Lansing in recent weeks.

“No Michigander should lose their home or their future because they survived an accident or an illness,” State Rep. Angela Rigas, R-Caledonia, told fellow lawmakers last month. 

Rigas, speaking at a hearing of the House Health Policy Committee, said she survived a serious car accident in 1997 when she was 23 years old — an accident that to this day shoots pains into her neck and triggers headaches.

Even with insurance, she was forced to file bankruptcy, she said.

“I used to be ashamed of that,” she said.

In Newport, Watson is lucky. 

As part of a unique partnership with the state, Boston-based Undue Medical Debt buys up medical debt, purchased for pennies on the dollar, on behalf of consumers. Leveraging donations and government money, it has been able to erase debt for more than 27 million Americans. Watson is among them: Undue relieved $4,161 of her bills through July.

Patients can’t apply; rather, they simply receive a letter, letting them know their debt has been erased. Undue has worked with the state of Michigan, and in partnerships with Wayne, Kalamazoo and Oakland Counties. In the latest round, Undue’s partnership with Oakland County in March erased more than $6 million in medical debt for about 6,300 Oakland County residents.

“I thought it was a scam at first,” Watson said.

But Undue forgives only past debt. Even with her Medicaid coverage, Watson’s bills will continue to mount.

“I”m alive today. There was a time when nobody was sure I’d make it,” she said. 

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