Detroit: The Good & Possible Bad of Health Care Investments


Can medicine replace motors as the economic engine in the Detroit metropolitan area? Not so fast, says the Center for Studying Health System Change, which recognizes possibilities but warns of potential dangers in high levels of health care capital investment. The Center for Studying Health System Change reports:

Despite a weak economic outlook, Detroit area hospital systems plan to spend more than $1.3 billion in the coming years on capital improvements, leading some to hope that medical care can help revitalize the area’s economy, according to a new Community Report released today by the Center for Studying Health System Change (HSC) and the nonpartisan, nonprofit National Institute for Health Care Reform (NIHCR).

Overlooked in the enthusiasm is the possibility that significant expansion of the community’s health care infrastructure may lead to higher health care costs if the hospital systems can’t attract new patients from outside the Detroit metropolitan area, according to the report.

“If all the spending on capital improvements leads to increased use of high-tech services or additional costs from excess capacity, the end result might be higher private health insurance premiums, which could negatively impact employers and employees,” said Paul B. Ginsburg, Ph.D., HSC president and NICHR director of research.

The challenges facing the Detroit metropolitan area’s health care system are intertwined with the challenges facing the community as a whole, including a declining and aging population; major suburban/urban differences in income, employment, health insurance coverage, and health status; and a shrinking industrial base, according to the report.

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