A Richland lawmaker at the center of a health care clash

*Matt Hall, Michigan House Speaker from Richland Township*, is facing sharp warnings from hospital lobbyists after advancing a package of bills designed to lower health care costs across the state.

The Michigan Health and Hospital Association told lawmakers Thursday that Hall’s proposed legislation could result in nearly 22,000 job losses and force more than half of Michigan’s nonprofit hospitals into negative profit margins.

The association represents 127 hospitals, 116 of which are nonprofit. According to the group, 27 nonprofit hospitals currently operate with negative profit margins. That number would jump to 54, or roughly 51%, if the mandatory price cuts in the bill take effect.

The numbers behind the warning

Adam Carlson, senior vice president of advocacy for the Michigan Health and Hospital Association, testified before the House Government Operations Committee on the projected impact.

“These job loss numbers represent service line reductions; it represents the closure of birthing units; the closure of behavioral health units, and, potentially, the closure of hospitals,” Carlson said.

Carlson said the proposed immediate 10% cost cut, along with other cost caps that limit increases to the rate of inflation, would likely result in a $2.3 billion loss for nonprofit hospitals across the state. He said that translates to 21,600 full-time job losses.

Hall defends the push

Hall pushed back against the hospitals’ claims. He noted that hospitals continue to find money for acquisitions, new construction, and executive pay.

“Any time that you try to lower health care costs, hospitals make these arguments,” Hall said. “One of the challenges you have in this — I’ve been doing this for a while now — everyone involved in health care points fingers at each other and then they’re trying to protect the status quo.”

Hall is one of four Republican sponsors of the bill package. The legislation was introduced last week and had a committee hearing Thursday. Hall said it may be part of ongoing budget negotiations.

What the bills would do

The four-bill package, House Bills 6116 through 6119, includes the following provisions:

  • Nonprofit hospitals must lower costs by 10% within two weeks of the act becoming law.
  • A state hospital pricing board would be created to review hospital finances.
  • Hospital price increases would be limited to the rate of inflation.
  • Hospital mergers and acquisitions would face board review. Any consolidation must result in at least a 2% decrease in costs.
  • Mergers would be prohibited if they result in a consolidated bed count of more than 8% of all beds in the state or 15% of all beds in a designated prosperity region.
  • Hospitals with more than $2 billion in annual revenue would be barred from requiring physicians to sign non-compete agreements.

The board would have authority to provide grants to struggling hospitals, with priority given to rural or isolated facilities. The grants would come from a fund funded by assessments on regulated hospitals.

Critics question the speed and scope

State Rep. John Fitzgerald, a Democrat from Wyoming, raised concerns about the pace of the legislation.

“We were starting to have that discussion a little bit,” Fitzgerald said. “It is insurance premiums. It is pharmaceutical costs. It is workforce and recruitment and retention. … It’s a full mixture and I don’t disagree, health care costs are going to be still probably one of the top three cost drivers for most families in the state of Michigan. We have to come forward with a comprehensive solution.”

Bret Jackson, president of the Michigan Health Purchasers Coalition, argued that the legislation is necessary. He said 77% of Michigan’s nonprofit hospitals operate at a profit margin above 10%. The average hospital operating profit margin in Michigan reached 16% in 2024, and large urban systems saw margins increase to 20%.

“The current trend of increased hospital prices has broken the backs of many Michiganders,” Jackson said. “It’s unsustainable for patients, employers, and the hard-working families of Michigan.”

A history of friction

Hall’s relationship with the Michigan Health and Hospital Association has been strained. In September, Hall called for the ouster of MHA CEO Brian Peters after Peters criticized Medicaid cuts in a proposed spending plan.

State Rep. Mike Harris, a Waterford Republican who helped sponsor the hospital reforms, acknowledged that some adjustments to the legislation may be needed. He said the discussion is necessary.

“I recognize this legislation asks significant questions of our healthcare system,” Harris said. “It should. Health care is one of the largest expenses facing Michigan families, employers and taxpayers alike.”

The legislation does not apply to for-profit hospital systems, such as the Detroit Medical Center, which is owned by Tenet Healthcare Corp.