CRAIN'S DETROIT

20 Pages·2017·6.81 MB·English

MARCH 20 - 26, 2017
Selling Motown Aiming for
‘experience’ integration
Boxing,
music among HMOs make their case for
Airbnb’s how they would combine
Detroit sales mental, physical care,
pitches, Page 8
Page 4
Real estate Despite population and size Broken
Ann Arbor outpaces advantage, Detroit falls behind
cities,
Ann Arbor has passed Detroit, the state’s largest city, in the total value of real
estate within its borders, and Troy is closing in.
Detroit with highest
elusive
Troy
real estate values recoveries
Population: 83,280
Size: 34 square miles
By Mike Wilkinson
By Kirk Pinho able positive press locally, na- Households: 30,812 Bridge Magazine
[email protected] tionally and internationally for its Median household income: $85,027 Th e numbers are stagger-
Even after Detroit’s decades of buoyed business district, though ing: Between 2008 and 2016,
Assessed value: $5.24 billion
decline, the state’s largest city both that represents just a few of its Flint lost more than
by size and population still had 143 square miles — still has to go three-quarters of its taxable
bragging rights in 2014 as the one in its recovery. value. Detroit, now the state’s
with the highest total real estate While Ann Arbor is just 0.7 per- 75 second-largest city in terms of
value: $12.3 billion. cent lower in total assessed real property value, saw its value
96
No more. value than it was in 2008, Detroit plummet by $7 billion, losing
In the last two years, Ann Ar- remains fathoms deeper, 60.5 nearly 60 percent of its 2008
bor, a fraction of Detroit’s size percent lower than it was when value.
and population (see chart) but stock and home prices collapsed. It’s not just those two cities
mighty in academic and tech cul- “We just did not see the mar- that remain dramatically be-
ture, has overtaken the Motor ket decline like other cities and 696 low 2008 values. It’s also Mus-
City as the Michigan community municipalities saw,” said Dave kegon Heights and Saginaw.
with the highest total assessed Petrak, Ann Arbor’s city asses- Pontiac and Albion. Taylor
value. sor. “Ours went down, but we and Southfi eld. And more
It’s a head-turning revelation. saw single-digit decreases while than two dozen other com-
It shows, at least on paper, just others were going down double munities.
94
how far post-bankruptcy Detroit digits.” While property values have
— which has received consider- SEE VALUES, PAGE 16 yet to recover across most of
96 Michigan, more than 1.4 mil-
lion people — one in seven res-
idents — live in communities
23
where property values are less
14 275 than half of where they were at
the beginning of the recession.
Th ose declines have gutted
Ann Arbor Detroit property tax collections and
Population: 117,070 Population: 677,116 aff ected what cities can off er
citizens in security and ame-
Size: 29 square miles Size: 143 square miles
nities, limiting the qualities
Households: 47,179 Households: 255,740 that make these communities
94 75 attractive to newcomers.
Median household income: $55,990 Median household income: $25,764
SEE BROKEN, PAGE 16
Assessed value: $6.39 billion Assessed value: $5.43 billion
23
Sources: U.S. Census and Bridge Magazine
Energy
Massive power outage renews calls to ‘harden’ the grid
By Jay Greene More: Michigan leads the nation with plunged 600,000 electric customers Outages more common
[email protected] into the dark and cold, the state has
most outages per capita, Page 17 in Michigan
More than a million people who ordered utilities to spend more to re-
lost electricity for up to a week be- Th e daylong storm, with gusts up to duce power outages.
Of the states with the most power outages, Michigan has had the highest per capita
cause of the March 8 wind storm 65 mph, blew down more than 3,000 During the next fi ve years, Con-
rates of power outages in the country since 2011.
have a big question: Should DTE En- DTE power lines. Consumers Energy sumers plans to spend $150 million
ergy Co. and Consumers Energy Co. lost 7,900 wires and 1,000 poles. annually, up more than 11 percent Per 100,000
Rank State Outages residents
invest more to keep the lights on? Since a December 2013 ice storm from last year and 81 percent from
2015 on tree-trimming, burying pow- 1 Michigan 929 9.38
© Entire contents copyright 2017
by Crain Communications Inc. All rights reserved er lines, installing more durable
2 Ohio 830 7.16
crainsdetroit.com Vol. 33 No 12 $2 a copy. $59 a year. poles and other fi xes. DTE is in the
middle of a fi ve-year, $412 million 3 California 2,769 7.05
plan to do similar. 4 Pennsylvania 820 6.41
It might not be enough, when
5 New York 935 4.75
R Michigan has the most outages in
E
AP the nation per capita because of a 6 North Carolina 373 3.69
P
WS windy climate, aging equipment and 7 Texas 1,019 3.65
NE lots of trees that knock lines down.
SEE STORM, PAGE 17 Source: Eaton Corp. reports on power outages
2 CRAIN’S DETROIT BUSINESS // MARCH 20, 2017
MICHIGAN BRIEFS INSIDE
CALENDAR 13
CLASSIFIED ADS 15
State expected to drop
DEALS & DETAILS 13
A-F grades for schools
KEITH CRAIN 6
The state superintendent is drop- OPINION 6
ping a plan to give a letter grade to
OTHER VOICES 6
every public school and, barring leg-
islative action, instead will issue a PEOPLE 14
report card showing indicators such RON FOURNIER 6
as each school’s proficiency on the
RUMBLINGS 19
state exam, The Associated Press re-
ported. WEEK ON THE WEB 19
Superintendent Brian Whiston
COMPANY INDEX:
had intended to develop the A-F
SEE PAGE 18
grading system as part of an effort to
make Michigan, which has lost
ground nationally, a top-10 state for in crashes is rising to $170, a $10 in-
education. But the concept, while crease, The Associated Press report-
supported by some Republicans in ed.
the GOP-led Legislature, is contro- The Michigan Catastrophic
CATHY BRAGIEL/MICHIGAN.ORG
versial and has been questioned by Claims Association announced the
Operators of twin oil pipelines beneath the swirling waterway where Lakes Huron and Michigan converge insisted last week they
many in the education community. new per-car assessment for the 12
remain structurally sound even though an outer layer of protective covering has worn away in some places.
Two officials who were briefed by months starting July 1. It increased
Whiston — State Board of Education ranking for each school and issues a layer of protective covering has worn fitness, we wouldn’t be operating the by the same amount last year.
member Tom McMillin and Michi- color-coded scorecard that shows away in some places, while skeptics pipeline,” Brad Shamla, the Canadi- The Livonia-based group collects
gan Association of School Adminis- how its students fared on the state said the deterioration is further evi- an company’s vice president of U.S. funds to reimburse insurers for per-
trators Executive Director Chris Wi- assessment, the graduation rate and dence the lines should be shut down, operations for liquid pipelines, told sonal injury protection claims ex-
gent — told the AP that the state other factors. The Associated Press reported. reporters before a meeting of the ceeding $555,000 per claim. The as-
Department of Education’s default Officials with Enbridge Inc. said Michigan Pipeline Safety Advisory sociation paid $1.1 billion in 2016,
accountability plan will be a “dash- Enbridge insists the exterior material is not essential Board. mostly for brain and spinal cord in-
board” format with no grades. Mich- pipelines safe to the pipes’ integrity and there is no juries, multiple fractures, and back
igan’s draft plan to comply with the reason for concern about its absence Auto insurance fee for and neck injuries. It said about $140
new federal Every Student Succeeds Operators of twin oil pipelines be- in spots along the lines extending severe injuries rising of the total will cover anticipated
Act, which was released for public neath the swirling waterway where nearly 5 miles along the bottom- new claims and $26 will address a
comment on Feb. 14, had proposed Lakes Huron and Michigan converge lands of the Straits of Mackinac. The annual auto insurance fee $1.9 billion estimated deficit for ex-
A-F grades. Michigan currently pub- insisted last week they remain struc- “If there was ever a time when we Michigan drivers pay toward caring isting claims. Another 40 cents goes
lishes a top-to-bottom percentile turally sound even though an outer weren’t 100 percent confident in its for people catastrophically injured toward administrative expenses.
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CRAIN’S DETROIT BUSINESS // MARCH 20, 2017 3
Q&A Environment
McQuade talks
Kilpatrick case,
her legacy and
teaching at UM
By Dustin Walsh
[email protected]
Barbara McQuade is a crusader
against public corruption and has
brought charges against officials in
Macomb County
and Detroit Pub-
lic Schools and
famously se-
cured a convic-
Elimination of Great Lakes
tion of former
Detroit Mayor
Kwame Kilpat-
rick on public cleanup funding threatens
corruption
charges.
Barbara McQuade:
Now she’s
Starts at teaching ecology, economy
headed to a new
at UM on May 1.
job after seven
years as U.S. at-
torney for the Eastern District of
Michigan. CRAIN’S DETROIT BUSINESS
A Sterling Heights native, Mc- Rouge River restoration work has been part of the Great Lakes Restoration Initiative.
Quade is a graduate of the University
of Michigan and UM Law School, Southeast Michigan also benefits from federal dollars Development Commission. “We are
where she’ll now teach classes on finally able to remove the toxic mud
national security, criminal law and By Dustin Walsh other lakes in the region thanks partly early budget speculation. from our lakes and streams and make
criminal procedure as a professor [email protected] to millions of dollars in federal fund- From the polluted Rouge and the needed improvements to the
from practice starting May 1. In 1965, unlined wastewater la- ing. But the funding that saved Mus- Clinton Rivers to Harsens Island to quality of our water, fish and wildlife,
She resigned earlier this month goons holding chemical sludge kegon Lake and dozens of other Mich- the banks of the Detroit River, the communities and economy.”
following U.S. Attorney General Jeff spilled contaminants into a nearby igan waterways is in jeopardy under proposed elimination of the GLRI The issue isn’t just about the envi-
Sessions’ call for resignation of 46 tributary stream of Muskegon Lake, the President Donald Trump adminis- would deliver a blow to environmen- ronmental benefits, it’s economic,”
U.S. attorneys. separated only by dunes from Lake tration’s 2018 budget — which propos- tal rehabilitation projects in Michi- said Cameron Davis, vice president
McQuade spoke with Crain’s re- Michigan. es cutting the $300 million Great Lakes gan. The end of the program also of environmental engineering firm
porter Dustin Walsh about her time In the years that followed, Kathy Restoration Initiative to zero. would handicap the economic de- GEI Consultants Inc. “(GLRI) is sig-
as the U.S. attorney in Detroit and Evans would eat the fish her father In a move that threatens Michi- velopment efforts of counties that nificant for coastal communities
plans for the future. caught out of the lake. But not all of gan’s ecology and economy, the put Trump in the White House — like that endured a long legacy of pollu-
them. While cleaning his catch, Ev- White House on Thursday proposed Macomb and St. Clair. tion; making sure those areas are re-
Did the call for your resignation come ans’ father would toss a few fish in the to slash Environmental Protection “I am grateful that we have the stored ecologically, but also to make
as a surprise? trash — the smell of chemicals and Agency funding by 31 percent and Great Lakes Restoration Initiative,” them prime destination spots, in-
Not really. We were asked to stay on petroleum was too strong to stomach. go further to eliminate the GLRI, said Evans, now environmental pro- creased tourism and a lot of other
past the election (of President Donald Today, Muskegon Lakes’ fish are which was reported earlier this gram manager for Muskegon-based economic benefits.”
SEE MCQUADE, PAGE 18 designated as safe to eat as are those of month to see a cut of 97 percent in West Michigan Shoreline Regional SEE LAKES, PAGE 15
Economic development
MUST READS
Do business lures really work?
OF THE WEEK
By Lindsay VanHulle By the numbers
Join Crain’s Inner Circle Crain’s Detroit Business/Bridge Magazine
LANSING — Economic develop- Companies accepted about two-thirds of the incentives packages offered to locate
Ron Fournier: We’re looking for your help in ment leaders rolled out a new push or expand in Michigan over the last three years, data show. The Michigan Economic
learning how Crain’s can help you, Page 6 for business-attraction incentives last Development Corp. said it tracks all offers made and their outcome. The numbers
week with the familiar refrain that reflect incentives offers made and accepted in the specified year, though deals
Michigan needs them to keep up with accepted could be related to offers made in the prior year.
other states for larger projects.
Year Offered Accepted % Accepted
Bigger One Campus Martius? But little hard data exists, at least
publicly, to support that contention. 2014 113 74 65.5%
Talks renewed on adding on to the former Compuware building,Page 14 A lack of transparency about in-
centives, tax credits and other eco- 2015 102 67 65.7%
nomic development tools has dogged
efforts in Michigan to create or ex- 2016 146 101 69.2%
pand programs years after Gov. Rick
Snyder eliminated many of them. Source: Michigan Economic Development Corp.
Roughly two-thirds of all economic there is precious little available data to not release a list of projects it pitched,
development incentive packages of- compare it against, so it’s hard to tell if citing confidentiality agreements.
fered each year by the state’s econom- Michigan is doing well, poorly, or State officials almost never say
ic development agency from 2014 to somewhere in between. when companies choose to locate
2016 were accepted, according to data Incentives are not easily bench- elsewhere. Senior administrators at
released by the Michigan Economic marked across states and the state the MEDC say it’s rare to find out
Development Corp. at Crain’s request. doesn’t always learn why it failed to why another state was more
It sounds like a good showing. But close a particular deal. The MEDC will SEE INCENTIVES, PAGE 18
4 CRAIN’S DETROIT BUSINESS // MARCH 20, 2017
INAUGURAL 2017-18 SEASON
KATIE ALEXIS PHOTOGRAPHY
Lessons from Downtown Boxing Gym’s Khali Sweeney are among the Detroit experiences that Airbnb is marketing.
Airbnb hopes to double Detroit
presence through ‘experiences’
By Sherri Welch The program The experiences could also spur
[email protected] more people to visit Detroit.
targets
San Francisco-based Airbnb proj- Currently, 300 Detroit homes host
ects it will double its economic im- millennials Airbnb travelers, with half renting
pact in Detroit this year to $20 mil- out an extra, unused room in their
looking for
lion following the launch of a home and an equal number renting
program called “Trips,” which is authentic out their full residence when they ar-
marketing 23 experiences like spar- experiences. en’t there. Hosts set their own rental
ring at the Downtown Boxing Gym rates, with help from a price-setter
or touring the city’s recording stu- The other initial markets were: on the Airbnb platform. They keep
dios. Miami, Los Angeles, San Francisco, 97 percent of the price they charge,
The program targets millennials Havana, London, Paris, Florence, and 3 percent goes to Airbnb, which
looking for authentic experiences Nairobi, Cape Town, Tokyo and also charges travelers a 9 percent fee.
who would rather stay in a cool Seoul. Airbnb is now adding other By Airbnb’s count, just under
neighborhood than a hotel and have markets like Barcelona. 27,000 people came to Detroit
been the early adopters of Airbnb. Many of the Detroit experiences through bookings on its platform last
Airbnb, the web-based platform offered reflect their interest in the year. Detroit, the top destination for
that helps travelers rent private city’s music and fashion scenes and visitors booking a Michigan trip
homes or rooms in cities across the social causes. through Airbnb, has had 100 percent
globe, said it doubled its 2015 eco- Users can sign up for a limo tour increases in the number of people
nomic impact in Detroit to $10.5 mil- of Detroit recording studios and vi- coming here each of the past two
lion last year. nyl shops with Kid Rock’s former years, said Ben Breit, press secretary
Of that total, $3.1 million went di- lead guitarist, go “techno clubbing,” for the Midwest for Airbnb.
rectly to Detroiters hosting guests in tour the city’s famous high-rise Following Detroit, Ann Arbor
their homes, and the remaining $7.4 buildings, get a lesson in night pho- drew 18,528 visitors last year through
million came through indirect tography or get tips on “Detroit style” the Airbnb platform, Traverse City
spending with local restaurants, from the owner of clothier 1701 Be- had 14,822 and Grand Rapids 9,445.
shops, taxi cabs and other local busi- spoke. On average, each Detroit host,
nesses, the company says. Or, they can opt to learn about the most of whom are middle-class,
Airbnb launched its Trips plat- Pretty Brown Girl movement with rented their home or a room an aver-
form as a part of its app in mid-No- the director of the Charles H. Wright age of 50 times last year through the
vember, enabling travelers to book Museum of African American Histo- platform, earning about $5,000.
experiences in 12 markets initially. ry or take part in a boxing training “Our goal is for these Detroit Ex-
Detroit was one of the first. session with the founder of Down- periences to really catalyze that eco-
The full charge for the experienc- town Boxing Gym, a nonprofit that nomic impact, particularly in neigh-
es hosted by nonprofits goes to provides an after-school tutoring borhoods that aren’t traditionally
them, but Airbnb is taking a 20 per- and boxing program for Detroit known as places for tourists to go,”
cent cut of the fee visitors pay for all youth age 7-18. Breit said.
DON’T MISS YOUR OPPORTUNITY other experiences when they’re About a dozen visitors have done The growing tourism via Airbnb
booked through its platform, similar the $59, two-hour training with De- could also provide the state with a
BECOME A MEMBER TODAY
to the model for its home-booking troit Boxing Gym Founder Khali new revenue stream, Lehane said.
service. Sweeney so far, Executive Director Airbnb, which is collecting and
Airbnb included Detroit in the Jessica Hauser said. paying lodging taxes in 220 markets
Trips platform along with heavy The experience and partnership currently, is in conversations with
For more information, call 248-377-0100 tourist destinations, given rising in- with Airbnb “helps out-of-town the Michigan Department of Trea-
or visit www.pistons.com terest in Detroit, much of it from guests learn more about our pro- sury about collecting the state’s
New York, said Chris Lehane, head gram and see first-hand the import- 6-percent use tax on the rentals here
of global policy and communica- ant work we’re doing with Detroit in Michigan and forwarding those to
tions. students,” she said. the state, he said.
CRAIN’S DETROIT BUSINESS // MARCH 20, 2017 5
RTA may
not seek
transit tax
until 2020
By Bill Shea
[email protected]
The Regional Transit Authority of
Southeast Michigan may wait until
2020 to ask taxpayers to fund a mass
transit plan in metro Detroit, the
chairman of the RTA’s board said.
Voters in November narrowly re-
jected a 10-year, 1.2-mill transit tax
that would have raised $3 billion for
a system of rapid-transit buses, com-
muter rail, and improved traditional
bus service in Wayne, Oakland, Ma-
comb, and Washtenaw counties. It
also would fund Detroit’s QLine
streetcar. Under the state law that es-
tablished the RTA in 2012, the orga-
nization can ask voters for funding
every two years, meaning the next
opportunity to put a tax on the ballot
is 2018.
That may not be enough time,
RTA board Chairman Paul Hille-
gonds said. The RTA still is analyzing
its ballot defeat — the issue lost by
fewer than 20,000 votes out of 1.7
million cast across the four counties
— and reeling from RTA CEO Mi-
chael Ford being ousted by the board
on Thursday after questions about
his expense reimbursements arose.
Hillegonds said renewals for the
suburban bus tax and Ann Arbor’s
transit tax could crowd the 2018 bal- EEmmppllooyymmeenntt LLiittiiggaattiioonn EExxppeerriieennccee
lot.
The RTA board has a retreat IInn YYoouurr CCoorrnneerr..
scheduled in April at which it will ®®
discuss its master plan, budgetary
needs, and a new CEO, he said.
Ford was fired without cause on
(cid:374) Represents employers in litigation involving
Thursday, which means he’ll be paid
all types of employment and labor claims.
the remaining $161,000 on his three-
year contract that began in 2014. The (cid:374) Advises healthcare organizations in matters
Detroit News, using public records, involving peer review activities, professional
published a story outlining what
credentialing and discipline.
some critics said
were excessive (cid:374) Counsels employers regarding employment
bills for hotels, policies, reductions in force and employment
meals, and other agreements.
expenses.
Tiffany Gunt-
er, the RTA’s
COO and deputy
CEO, was ap-
pointed interim
Tiffany Gunter: CEO. She said
Appointed interim she intends to
CEO of RTA. seek the job full
time.
Hillegonds defended the RTA’s
money handing: “We have been to-
tally transparent with the mistakes
we find. There wasn’t intentional
wrongdoing.”
The RTA may seek additional
money to operate through at least
2020. It has been spending about FirstTier Ranking in
Labor Law – Management
$1.7 million annually on administra-
Health Care Law
tive operations, mostly salaries and
studies, and Hillegonds said that
probably needs to increase to about (cid:374)Detroit(cid:374)Novi(cid:374)Grand Rapids(cid:374)Kalamazoo(cid:374)Grand Haven(cid:374)Lansing (cid:374)Ann Arbor (cid:374)Hastings ContactTerry Miglio at [email protected]
$2 million annually.
6 CRAIN’S DETROIT BUSINESS // MARCH 20, 2017
Join our Inner Circle
e’re looking at Crain’s Help us decide
W
Detroit Business with
OPINION what beats to
fresh eyes: Your eyes.
We are collecting advice, opin- cover, what
ions, and even constructive criti-
stories to write,
cism from a self-selected group of
advisers. I’d like you to be one of and what ways
Never forget them. Please join our Inner Circle RON FOURNIER we can deliver
— an in-person and online com-
Editor/Publisher news and
munity dedicated to making Crain’s
Michigan the best, most engaging media information that
company in Michigan.
helps your
We’re not changing what makes
t was one of those quiet moments that spoke volumes. Standing in Crain’s distinctive and important, business succeed.
I
front of photographers during a visit to Michigan last week, Presi- but with your help, we will make
dent Donald Trump invited fellow Republican Rick Snyder into the Crain’s essential. ny’s pain points.
frame. “Come on, governor,” he joked. “Even though you didn’t endorse Why are we doing this? First, I While our journalists will always On my first day at this job, I told
me.” just took over as publisher from be independent and objective, the the Crain’s staff that the heart of our
Reflecting on the presidential campaign, a woman could be heard say- legendary leader Mary Kramer and newsroom will benefit from your operation is not the newsroom,
ing that Trump hasn’t forgotten Snyder’s snub. The president replied with I need to know more about the loyal advice. though it’s stocked with top-shelf
a forced smile, “I never forget.” And so we’re left wondering: Will Trump Crain’s audience. Second, the en- journalists. It’s not even the sales
better remember Snyder’s slight or the promises he made to Michigan? tire Crain’s team wants to serve you More than the news team, the hard-working folks who
The question comes to mind upon review of the budget Trump sent to better. bring in the money that pays for
Congress, which would eliminate: What do you like about our cov- Separate from the newsroom, we great journalism. The heart of our
JThe Great Lakes Restoration Initiative, which improves wetlands, re- erage? What don’t you like about it? have another large team of experts operation is our audience.
duces pollution, and increases wa- What would make Crain’s an utterly who can help solve your business The heart and soul of Crain’s is
Will Trump better ter quality throughout the Upper indispensable news source? Our problems, working directly for you. you.
Midwest (See story on Page 3). reporting must be so compelling Not satisfied with the way your Please join our Inner Circle at
remember
JThe Community Development that Crain’s is your first read in the company is marketed? Need to crainsdetroit.com/innercircle or by
Snyder’s slight or Block grant, including $31 million morning and your last read at night. build your personal brand? Look- emailing me at rfournier@crain.
the promises he that goes to Detroit for homeless All day, I want you wondering, ing for a bigger pipeline of talent? com.
shelters, transportation for seniors, “What’s Crain’s up to?” Want help researching complicated Tell us what you want. Tell us
made to
housing rehabilitation and demoli- Help us decide what beats to issues and presenting them to your what you need. Dare us to deliver.
Michigan? tion costs. cover, what stories to write, and clients, customers and board mem-
JThe Low-Income Home Energy what ways we can deliver news and bers?
Assistance Program, which helps information that helps your busi- Start thinking of Crain’s as more Ron Fournier is editor and publisher of
the disabled, elderly people and families with preschool-age children pay ness succeed. Would you like more than a trusted weekly newspaper. Crain’s Detroit Business and Mary
for heating. access to our reporters and editors? We’re a full-service communica- Kramer is group publisher. Catch
The Trump administration wants to shift the money to the Pentagon Do you need more data about your tions company on Gratiot Avenue them at 6:10 a.m. Mondays on the
and the Homeland Security Department, which would receive a com- competitors and the Michigan — a building full of storytellers you Paul W. Smith show on WJR AM 760.
bined boost of $55 billion. Budget Director Mick Mulvaney called the business ecosystem? can hire to find and fix your compa-
budget a promise kept.
“If he said it in the campaign,” Mulvaney said of Trump, “it’s in the bud-
LETTERS
get.”
That’s not true. The budget includes no investment in urban areas, ‘Old school’ industries end-users daily across a range of like ours that employ hundreds
which Trump promised to voters in Detroit and elsewhere. It makes no industries. and are vital to the ongoing suc-
also matter to Detroit
mention of Trump’s promise to invest $1 trillion in new infrastructure; in- We made a $3 million capital cess and revitalization of the D.
stead, Trump proposed eliminating a $500 million roads program. To the editor: investment (with our own money) We’re not retail or a restaurant,
The Trump budget does nothing to tame the deficit, because he would Finally! Ron Fournier tells (part last year to expand our production we’re not startups and we’re not
increase national security spending while preserving the runaway costs of of) the untold story of Detroit capabilities and our team. We tech companies, per se, but we are
entitlements like Social Security. His knife pierces only “discretionary business owners who never left have 200 employees and are look- here, and we matter to Detroit.
spending,” just 15 percent of the federal budget, which is why the cuts are so the city. May I also add a comment ing for more, but it’s still hard to We’re not looking for kudos for
deep. A fiscally responsible budget would cut entitlements and raise taxes. about long-standing Detroit busi- fill entry-level jobs in the city. being city supporters, but if our
The Republican-led Congress will reject Trump’s budget, and the presi- nesses that are thriving in tradi- We are not downtown, nor are story resonates with other pro-
dent knows it. His strategy is to propose cuts so outrageous that GOP lawmak- tional, “old school” industries? we in a walkable area. As a matter spective Detroit business owners
ers can negotiate his blueprint down from draconian to merely extreme. Our own Detroit-based busi- of fact, our location is decidedly in the more traditional business
Candice Miller, Macomb County Public Works commissioner and for- ness was started by my father in unhip, but for the most part it space who question whether they
mer Republican U.S. representative, said Trump’s budget hurts voters in 1978 as a simple print and mail works for us, with outstanding ac- should jump on the Detroit band-
Michigan who put him in the White House. She’s a fierce advocate for the shop, with the old weekly TV cess to expressways and some of wagon, I would encourage them to
Great Lakes initiative that Trump wants to eradicate. Guide as one of our first custom- our largest customers. do so. There’s room for all of us.
“This is a really small amount of money, really, and it’s of great signifi- ers. Today we are a leader in direct Detroit is a tapestry of busi- Robert Tokar
cance to the states that voted for him,” she said. “These states can’t absorb mail and Web-based busi- nesses that employ from five to 10 CEO
(this cut). This is a time where I hope the president will reconsider.” ness-critical communications, people to thousands. In between, Wolverine Solutions Group
Trump and his party should reconsider. Because Michigan won’t forget. touching more than a million there are foundational companies Detroit
It is time for DTE to do more digging
This is becoming almost an annual sites with no trees, the power compa- will be far more reliable. sate businesses for their losses during
column. It certainly is more than an ny continues to install power lines I have no idea how much it costs to these power outages.
annual DTE event. overhead rather than bury them to bring in linemen from other states to When other utility companies have
Several times a year, thousands of protect them from the ravages of repair power lines after a ugly storm buried their lines for years, it is time for
homes and businesses lose their pow- weather. like we had March 8, but it has to be DTE to start slowly but surely eliminat-
er for several days, causing great in- It is time for DTE and other power substantial. Let customers decide ing exposed power lines above
convenience and greater financial companies to start burying their lines. whether they are willing to invest in ground.
losses. Since DTE claims buried lines are buried lines that give reliable power Businesses and customers deserve
KEITH CRAIN
Meanwhile, you can still use your too expensive, I would suggest the during Michigan’s often severe wind better service. If the utilities become
Editor-in-chief
home phone, and if you had power, company give its customers a choice. storms. We might put the auxilia- responsible for business losses during
your gas lines continue to feed your Tell your customers what it would cost ry-power companies out of business these interruptions, then they might
furnace and your cable TV still works. We have been hearing for years that to put lines below ground and let the but it would be a fair tradeoff. speed up the conversion.
They all have their lines buried to it’s all the fault of the trees. If they neighborhoods decide if they would We have been suffering loss of pow- Correcting the problem is long
avoid costly disruption of service to didn’t grow, we wouldn’t have this be willing to invest the money for the er for decades. It is time for DTE to fix overdue. It is time to speed up the con-
customers. problem. Yet, I am told in some new knowledge that their power supply the problem or be willing to compen- version to underground power lines.
CRAIN’S DETROIT BUSINESS // MARCH 20, 2017 7
We need to shift ‘conventional wisdom’ on education in Michigan
It’s really simple when you look at out-earn everybody.” more, according to a Harvard Univer- the February gathering of the I-275 In-
it. Let’s stop comparing “two-year sity study. dustrial Council. Some 90 people
About one-third of future jobs will kids” with “four-year kids,” as income The business community can also gathered to learn about the skilled
require a bachelor’s degree or more. levels in the skilled trades continue to be helpful in changing “conventional trades and STEM programs at Livo-
About two-thirds of future jobs will re- surpass most jobs held by those with wisdom.” Business leaders need to do nia, Wayne-Westland, and Plym-
quire an associate’s degree or other bachelor’s degrees in liberal arts. a better job of explaining what they outh-Canton schools. This led to pro-
training — mostly in a skilled or tech- With overtime, a good welder can need, and sharing the skills they seek ductive dialogue with dozens of
nical trade. Yet, all our young people easily earn a six-figure salary. But from schools and policy makers. The human resource managers from local
will have many school days this spring OTHER VOICES “conventional wisdom” may discour- leading complaint we hear from local companies.
filled with the anxiety of standardized Dan West age an interested student from explor- employers is they cannot find the ex- It was an energizing gathering, but
testing. Policy mandates that teachers ing such skilled trades. Many parents perience and talent to fill job open- more of this needs to happen. More
West is president and CEO of the Livonia
focus their classrooms on these tests, remain convinced their kid child has ings. We need these employers to lead business-education chats and less
Chamber of Commerce.
as they play a role in their perfor- to get a four-degree to get a good job. the conversation and advance the “conventional wisdom” will encour-
mance evaluations. Yet, 16 percent of bartenders held a cause. age more young people to explore
The focus on these tests leaves stu- erful statement: “Aside from ad- bachelor’s degree or more in 2012. Re- Locally, we took a big step in boost- their passions for careers, and provide
dents feeling their life’s prospects vanced law, advanced business, and member: Only 33 percent of future ing education-business relationships a better foundation for our region’s
hang on the results of these series of advanced medicine, a welder will jobs require a bachelor’s degree or across Western Wayne County with economic development.
questions. University-bound students
generally do well with testing, but
what about the other students? For
them, this process can be demoraliz-
ing.
This is one of the major discon-
nects here in Michigan between edu-
cation and career preparedness.
The focus on standardized testing
centers on college preparedness, yet
only a minority of high school gradu-
ates will need a four-year degree in the
workforce.
Michigan Gov. Rick Snyder is look-
ing at new ideas to boost student in-
terest in skilled and technical trades.
As part of his 2018 budget, he pro-
posed $20 million for school districts
to apply for funding for capital im- EVERY COMPANY HAS ONE:
provements to career-technical cen-
ters.
a messenger; a collaborator; a comedian; a trailblazer.
With this focus, he recently visited
the William Ford Career-Technical
Center in the Wayne-Westland School
District. This facility provides training
Acompany is only as successful Whatever your colleague’s
for high school students aspiring to be
welders, auto mechanics, heating and as the personalities who make superpowermay be, Crain Custom Your custom Superhero
cooling technicians, computer tech- up its workforce, and we want Content will tell the story,complete will be featured in the
nicians, firefighters and other skilled to tell their stories in a creative, with a custom illustrationbya Superpowersection
fields. Many of these students are engagingway. Detroit-based comic artist. of the Monday,
ready for the workforce upon high June 5 issue of
school graduation.
“These are great career opportuni-
ties,” Snyder said. “It is not just that
they are learning skills, they are also
learning to work together as a team,
and that is valuable as well.”
The center is a source of pride for
Superintendent Michele Harmala,
but despite the necessity of this center,
its future is never certain because of
the flux in student enrollment which
funds such programs. With so many
core classes required for graduation
— and such an emphasis on college
preparedness — many students and
their families may not recognize the
opportunities in the skilled trades. Highlight A Superhero In 3 Easy Steps
Thus, enrollment and the finances to
run the program can vary from year to
year.
There are similar funding challeng-
es with the Livonia Career Center,
where students get training in pro-
grams such as auto repair, medical
services and construction. You identify someone Awriter from ADetroit-based
We need a shift in education policy: in your organization Crain Content Studio comic artist will design
Less focus on testing and more on who has a unique will interview youto a custom-illustration
employable skills. Let’s introduce super power develop the story of the nominee
more applied learning techniques to
the classroom. Let’s use comput-
er-aided drafting as a geometry class.
Let’s introduce techniques in welding
Fordetails and rates contact Lisa Rudy
to algebra classes.
at [email protected] or [phone]
Speaking of welding, Matthew
Gibb, a deputy executive for Oak- RESERVEYOURADBYMAY5
land County, recently made a pow-
8 CRAIN’S DETROIT BUSINESS // MARCH 20, 2017
SPECIAL REPORT: HEALTH CARE SPECIAL REPORT: HEALTH CARE
Coordinating care Medicaid HMOs make case for
integrated financing approach
By Jay Greene
[email protected]
Managed care companies are
making their pitches for how they
would combine physical and mental
health services under a reworked
system of funding Medicaid mental
health.
Meridian Health Plan of Michi-
gan, Priority Health, UnitedHealth-
care and Blue Cross Complete are
four of eight managed care organiza-
tions that have submitted a total of
14 pilot proposals to the state of
Michigan to manage both physical
and behavioral health care services.
In their proposals, Michigan’s
health plans argue they can assume
care for most behavioral health ser-
Jon Cotton , president of vices with the same quality, care op-
Meridian Health Plan in tions and safeguards as patients
Michigan, and Danielle Devine, have now under the state’s $8.9 bil-
Meridian Michigan’s director of lion Medicaid managed care medi-
operations. Managed care cal program. Nearly 25 percent of
companies are making their Medicaid enrollees have behavioral
pitches for how they would health diagnoses and substance use
combine physical and mental disorders.
health services. The Medicaid HMOs submitted
the pilot study proposals as part of a
larger report conducted by the Mich-
igan Department of Health and Hu-
man Services in conjunction with a
120-member private workgroup au-
thorized last year by the state Legis-
lature. The goal was to study ways to
improve the behavioral and physical
health Medicaid systems.
Under the state’s current Medic-
aid contracting model, 11 Medicaid
PHOTO BY LARRY PEPLIN
health plans manage physical health
The rocky road to Medicaid health services integration gional contracts. The Medicaid HMOs, in turn,
contract with hospitals, medical groups, phar- Communication, not financial integration,
macies, and other providers to deliver medical
services. On the behavioral health side, 10 re- is key, mental health programs argue
By Jay Greene tus quo. It does not recommend integrating fi- gional prepaid inpatient health plans manage
[email protected] In this section: nancing of behavioral and physician health. services through state funding streams. The
Michigan legislators are preparing to debate But the general concept of better coordinat- PIHPs then contract with mental health, sub- By Jay Greene
one of the most controversial health care poli- n Managed care companies are making their ing care through integration of physical and stance abuse and other agencies to deliver be- [email protected]
cy issues of the year. It could impact more than pitches for how they would combine physical behavioral health services remains a strong fu- havioral health services. One of the major challenges in
300,000 patients and thousands of workers in and mental health services under a reworked ture policy consideration. At least eight health Last year, Crain’s reviewed integration ef- delivering coordinated care to Med-
the state’s public mental health industry. system of funding Medicaid mental health, plans have submitted 14 pilot proposals to in- forts in Arizona, Florida and Iowa. Officials icaid patients is connecting mental
It isn’t the Affordable Care Act, or its off- Page 9 tegrate behavioral health and physical health there were optimistic that integration of be- health providers with primary care
spring, the state’s successful Healthy Michigan in future managed care contracts. havioral health and physical health were work- doctors and nurses. Providers and
Medicaid expansion that now covers nearly n One of the major challenges in delivering coor- MAHP and HMO executives tell Crain’s they ing out for providers and patients. some mental health agencies use
650,000 of the state’s low-income citizens. dinated care to Medicaid patients is connecting can more effectively manage both behavioral Over the past decade, more than 30 states case managers to locate doctors and
It’s whether to integrate financing of the $8.9 mental health providers with primary care doc- health and physical health in a coordinated have moved to integrate physical health and coordinate care, but the effort has
billion Medicaid physical health managed care tors and nurses. The effort has never been con- and integrated delivery system. They point to behavioral health services under health plan never been consistent, leaving many
system with the $2.6 billion Medicaid mental sistent, leaving many consumers without inte- more than a dozen other states that have seen or behavioral plan oversight. States are looking consumers without integrated care.
health system. grated care, Page 9 improved quality, health outcomes and re- to lower costs, reduce service duplication and A pilot plan proposed by the De-
On one side, the Michigan Association of duced clinical costs from their efforts to com- improve care coordination and quality for troit Wayne Mental Health Authority
Health Plans, which represents Medicaid bine funding streams. their citizens. aims to address the lack of medical
health plans, is advocating to make real a bud- But the Michigan Association of Mental Fourteen states (28 percent) contract with doctors willing to treat behavioral
get boilerplate proposal championed last year MDHHS officials say they won’t be the ones Health Boards and its nearly 100 community HMOs for a fully integrated complement of be- health patients and coordinate care
by Gov. Rick Snyder that would have led to an to make recommendations to the Legislature. mental health program agencies and regional havioral and physical health benefits, exclud- more effectively with health plans.
HMO takeover of the Medicaid behavioral Instead, much to the chagrin of HMO execu- prepaid inpatient health plans say that mental ing pharmacy benefits, but most HMOs sub- In a Section 298 pilot project sub-
health budget. tives and some legislators, they interpret the health consumers and their families can best contract out for behavioral health, according mitted to the state, Detroit Wayne
That original Section 298 boilerplate has Section 298 instructions to “work with a work- be served by improving the current system. to a report by Open Minds Institute, a consult- said it would partner with fellow
since been revised to “make recommenda- group” to recommend next steps to the Legis- They say experiments in other states to inte- ing firm in Gettysburg, Pa. mental health authorities in Ma-
tions regarding the most effective financing lature. grate financing have created more problems Eleven states (22 percent) contract with comb and Oakland counties and
model and policies for behavioral health ser- However, the Section 298 Facilitation Work- than they’ve solved, especially when intellec- HMOs but exclude at least one behavioral collaborate with two unspecified
vices to improve the coordination of behavior- group, which is overwhelmingly controlled by tually challenged and developmentally dis- health category such as substance abuse or de- health systems in Southeast Michi-
al and physical health services for individuals public mental health advocates, has only rec- abled populations are included in managed velopmental disability. Another 16 states (32 gan to help Medicaid mental health
with mental illnesses, intellectual and devel- ommended care coordination improvements care contracts. percent), including Michigan, carve out most patients find primary care doctors
opmental disabilities and substance use disor- in the current public mental health system — Currently, 13 Medicaid health plans man- behavioral health benefits from HMO con- and coordinate care.
ders.” tweaking, but not essentially changing, the sta- age physical health through state-awarded re- tracts, the report said. In Detroit Wayne’s Metro Region
CRAIN’S DETROIT BUSINESS // MARCH 20, 2017 9
SPECIAL REPORT: HEALTH CARE
LawrenceTechnological University, in partnership with
Coordinating care Medicaid HMOs make case for :St. John Providence health system, offers a Bachelor of
Science in Nursing (BSN) for qualified applicants.
D
With nursing classes integrated across the curriculum, you
integrated financing approach can start your nursing studies on day one!
E
To learn more about this four-year, direct-admit program,
visit: www.ltu.edu/nursing
T
By Jay Greene “We could they can deliver as much or more
[email protected] than the current system offers.
contract with
Managed care companies are “We can show how much better N
making their pitches for how they every community the health is with our system. We just
would combine physical and mental want a chance to prove ourselves,” .
mental health S
health services under a reworked Cotton said.
system of funding Medicaid mental agency, contract AE
health. with social Pilot models proposed S
Meridian Health Plan of Michi-
gan, Priority Health, UnitedHealth- workers, home Meridian already provides inte- WR
care and Blue Cross Complete are helpers and grated physical and behavioral U
four of eight managed care organiza- health services in a Medicaid man-
providers. We N
tions that have submitted a total of aged care system in Illinois. The
14 pilot proposals to the state of would build our plan’s experience managing con-
Michigan to manage both physical tracts for integrated behavioral and
contracts around
and behavioral health care services. physical health services bodes well Architecture and Design
In their proposals, Michigan’s that.” for the pilot in Michigan, Cotton said.
Arts and Sciences
health plans argue they can assume “With the pilot here, we don’t
Engineering
care for most behavioral health ser- Jon Cotton, need to staff up,” he said. “We could
vices with the same quality, care op- Meridian Health Plan of Michigan contract with every community Management
tions and safeguards as patients mental health agency, contract with
have now under the state’s $8.9 bil- through state-awarded regional con- social workers, home helpers and
lion Medicaid managed care medi- tracts. On the behavioral health side, providers. We would build our con-
cal program. Nearly 25 percent of 10 public mental health authorities, tracts around that.”
Medicaid enrollees have behavioral called prepaid inpatient health One of the four pilot proposals Southfield, Michigan
health diagnoses and substance use plans, manage services through state Meridian submitted last month to 800.225.5588
disorders. funding streams. The PIHPs then MDHHS calls for Meridian to man-
[email protected]
The Medicaid HMOs submitted contract with mental health, sub- age behavioral health services for its
the pilot study proposals as part of a stance abuse and other agencies to Medicaid managed care patients in
larger report conducted by the Mich- deliver behavioral health services. any region where it currently has a
Possibleiseverything.
igan Department of Health and Hu- The Medicaid HMOs contract with state contract. The Detroit-based
man Services in conjunction with a hospitals, medical groups, pharma- HMO’s pilot proposal did not identi-
120-member private workgroup au- cies, and other providers to deliver fy a county or region. Meridian is the
thorized last year by the state Legis- medical services. state’s largest Medicaid health plan,
lature. The goal was to study ways to But HMO executives like Jon Cot- with more than 504,000 members.
improve the behavioral and physical ton, president of Meridian in Michi- Priority Health proposes to conduct a
health Medicaid systems. gan, say they can deliver compre- pilot in Kalamazoo County in partner-
Under the state’s current Medic- hensive and coordinated behavioral ship with the Kalamazoo Community
aid contracting model, 11 Medicaid and physical health services to the Mental Health and Substance Abuse SICK OF DEALING
PHOTO BY LARRY PEPLIN
health plans manage physical health Medicaid population. They believe SEE HMOS, PAGE 10
WITH PRINTERS?
gional contracts. The Medicaid HMOs, in turn,
contract with hospitals, medical groups, phar- Communication, not financial integration,
macies, and other providers to deliver medical Luckily for you, we love it.
services. On the behavioral health side, 10 re- is key, mental health programs argue
gional prepaid inpatient health plans manage
services through state funding streams. The
PIHPs then contract with mental health, sub- By Jay Greene 298 Proposal, the partners would co- save 10 percent of costs, or about $8 We’ll keep your printers and copiers
stance abuse and other agencies to deliver be- [email protected] ordinate care for individuals who ar- million during an 18-month period.
running, manage your supplies, ramp up
havioral health services. One of the major challenges in en’t already enrolled in Medicaid Bob Sheehan, CEO of the Michi-
your security, and save you up to 30%.
Last year, Crain’s reviewed integration ef- delivering coordinated care to Med- managed care. The three prepaid in- gan Association of Mental Health
forts in Arizona, Florida and Iowa. Officials icaid patients is connecting mental patient health plans in Wayne, Oak- Boards, said Detroit Wayne’s ap-
there were optimistic that integration of be- health providers with primary care land and Macomb would work proach and a dozen other mental
havioral health and physical health were work- doctors and nurses. Providers and closely with the health systems to health organization pilot proposals
ing out for providers and patients. some mental health agencies use link patients with primary care pro- would negate the need for Medicaid
Over the past decade, more than 30 states case managers to locate doctors and viders with the goal of reducing visits HMOs to manage the public health
“We recently switched to imageOne.
have moved to integrate physical health and coordinate care, but the effort has to emergency departments and ad- systems $2.4 billion Medicaid be-
Not only was it a substantial cost savings, but
behavioral health services under health plan never been consistent, leaving many missions to hospitals, said Ron havioral health budget.
or behavioral plan oversight. States are looking consumers without integrated care. Hocking, Detroit Wayne’s COO. “None of the (mental health pro- the overall experience has been extraordinary.”
to lower costs, reduce service duplication and A pilot plan proposed by the De- If successful, the regional pilot posals) calls for physical health” fi-
improve care coordination and quality for troit Wayne Mental Health Authority could be expanded statewide. nancing integration, Sheehan said. -Michael P. Kolb
their citizens. aims to address the lack of medical “We wanted to demonstrate coor- “Integration would be conducted Chief Information & Security Officer
Fourteen states (28 percent) contract with doctors willing to treat behavioral dinated care at the provider level,” clinically by cooperation, working Dickinson Wright
HMOs for a fully integrated complement of be- health patients and coordinate care Hocking said. “We can make huge with the health plans” to coordinate
havioral and physical health benefits, exclud- more effectively with health plans. improvements in emergency and physical health.
ing pharmacy benefits, but most HMOs sub- In a Section 298 pilot project sub- crisis care by going after the high uti- Other non-HMO pilot studies in-
contract out for behavioral health, according mitted to the state, Detroit Wayne lizers. Those not in Medicaid HMOs. clude Medical Network One, which
to a report by Open Minds Institute, a consult- said it would partner with fellow The top 500 people with the highest proposes to work with the Judson
Contact us for a free assessment.
ing firm in Gettysburg, Pa. mental health authorities in Ma- total costs.” Center, Oakland Health Integrated
imageOneWay.com | 800-799-5377
Eleven states (22 percent) contract with comb and Oakland counties and Hocking estimated there could be Network, Oakland Family Services
HMOs but exclude at least one behavioral collaborate with two unspecified as many as 1,500 consumers in the and Common Ground to coordinate
health category such as substance abuse or de- health systems in Southeast Michi- three counties who could use the pi- care.
velopmental disability. Another 16 states (32 gan to help Medicaid mental health lot system. Based on existing mod- Another multi-mental health ad-
percent), including Michigan, carve out most patients find primary care doctors els, he estimated that if even 500 vocacy pilot model includes Arc-
behavioral health benefits from HMO con- and coordinate care. consumers were managed effective- Michigan, Association for Children’s
tracts, the report said. In Detroit Wayne’s Metro Region ly using the program, the state could SEE PROGRAMS, PAGE 11
10 CRAIN’S DETROIT BUSINESS // MARCH 20, 2017
SPECIAL REPORT: HEALTH CARE SPECIAL REPORT: HEALTH CARE
tives and enhancing coordination service providers, most of which are rates based on complexity and acuity
HMOS
across medical and behavioral health nonprofit. levels of patients. In addition, the
FROM PAGE 9 care providers who participate in After legislative hearings, Snyder’s health plans would receive quality in-
Services through its Priority Health Michigan’s Medicaid program will re- boilerplate budget proposal was re- centive bonuses under a pay-for-per-
Choice Inc. duce fragmentation in the delivery of vised in April to allow a 120-member formance program based on meeting
Guy Gauthier, vice president of care, improve communication, and workgroup to recommend best ways predetermined health outcomes.
Medicaid with Priority Health, said promote a more comprehensive ap- to improve the state’s Medicaid be- In its contract, Blue Cross propos-
the Grand Rapids-based HMO’s Ka- proach to an individual’s care.” havioral health system. es to cover physical health, behavior-
lamazoo County pilot proposal is only UnitedHealthcare, the nation’s But like the previous two draft re- al health, intellectual disability, sub-
a framework for a larger plan that largest health insurer with 39 million ports, the final report recommends stance use disorder treatment and
could be replicated in other counties. total members, proposes to use its ex- that the state maintain the current bi- pharmacy services.
It already has a similar integrated sys- perience with integration in 22 other furcated funding streams to health Cotton said contracting with men-
tem in Kent County. states covering 5 million members’ plans and mental health organiza- tal health providers would be similar
“Typically, the most complex folks physical and behavioral health ser- tions. to how Meridian contracts with hos-
with behavioral health (also) have vices, initially excluding developmen- Thus, the $2.6 billion Medicaid pital systems, medical groups, physi-
complex medical problems,” Gauthier tally disabled populations, in one or mental health system in fiscal 2018 cians and other providers.
said. “You need to work with them at all of its managed care regions in would operate much the same for the “What we would do is simply take
the patient level.” Care managers, for Michigan. next year, unless the state Legislature out a surplus layer of money,” said
example, can help patients navigate “Within our integrated model, authorizes regional pilot studies and Cotton, referring to the 10 regional
complex health issue and make sure members would receive a single, diverts some funding to health plans. PIHPs. “The more I look at it, if (the
there are no gaps in care or communi- comprehensive assessment that in- In late January, Medicaid HMOs, system is) not carved in, I see a ton of
cation between the physical and the cludes all physical and behavioral PIHPs and mental health organiza- overhead and wasted money. I’ve
behavioral side. health needs as well as identifies tions began submitting pilot propos- never seen so many middlemen.
Under the current system, care co- needs for social supports,” said Unit- als to MDHHS. Fourteen pilot projects They would be gone. There would be
ordination is unclear, Gauthier said. edHealthcare Community Plan of were submitted by the eight HMOs. some administrative savings. But the
“You don’t know what you don’t Michigan in its proposal. The Michigan Association of Health bulk of savings would be in the clini-
know. Some could (have a) very good UnitedHealthcare already con- Plans submitted its own plan for state cal areas.”
caregiver and could be OK,” he said. tracts with several community mental Legislature to consider. Pallone said community mental
“On the other side, if they don’t have health agencies in the Lower Peninsu- The proposals health programs already have 99 per-
(a) good caregiver and there is lack of la to manage the behavioral health are all carve-ins cent of the contracts with the PIHPs.
coordination on the provider part,” visits covered by Medicaid now, said of behavioral “Contracts would go to the AAA, Eas-
there could be problems — for in- Dennis Mouras, CEO of the United- health to physical ter Seals, Hope and all the communi-
stance, when a primary care provider Health Michigan operation. health, said ty mental health programs,” he said.
doesn’t know if someone recently Mouras said UnitedHealthcare Dominick Pal- “The state would mandate that the
went to the ER. also has met regularly with several PI- lone, MAHP’s ex- (community mental health pro-
Priority’s goals are to increase ac- HPs to coordinate care of specific ecutive director. grams) be part of the contracts. We
cess to behavioral health services and members who have behavioral health Pallone said agree with that.”
physical health services, cut health issues. But he said the best way to co- most of the pro-
care costs, provide the right care at the ordinate care is through an integrated Dominick posals would ex-
right time, increase care coordination, financing approach. Pallone: Move clude some be- PROGRAMS
and educate members in self-man- “We have a whole person care forward with pilots. havioral health
agement skills. model that provides a single point of populations, FROM PAGE 9
Blue Cross Complete, the Medicaid contact” to members, Mouras said. such as the developmentally disabled Mental Health, Epilepsy Foundation,
HMO subsidiary of Blue Cross Blue “The team includes a registered nurse, population. Patients with mental ill- Mental Health Association, Disabili-
Shield of Michigan, also said its expe- a master’s degree social worker and a ness and traumatic brain injury would ty Rights Coalition, Michigan Protec-
rience with integration in Iowa and community health worker.” be served by the health plans. Each tion and Advocacy Service and the
several other states gives it an advan- Mouras said UnitedHealthcare’s health plan would contract separately National Alliance of Mental Illness.
tage. “person-centered approach” results with the state, as they do now under Like Detroit Wayne’s, the non-
“Collaborative efforts between in reduced administrative and clinical medical services contracts, he said. HMO pilots do not propose to as-
Rebuilding Detroit’s Neighborhoods
Medicaid health plans and (mental costs by reducing unnecessary utiliza- “We would move forward with (re- sume combined financing for behav-
health organizations) to coordinate tion and improveing the patient expe- gional) pilots” to test various ap- ioral and physician health services,
(cid:76)(cid:77)(cid:70)(cid:61)(cid:3)(cid:65)(cid:70)(cid:3)(cid:76)(cid:71)(cid:3)(cid:76)(cid:64)(cid:61)(cid:3)(cid:68)(cid:65)(cid:78)(cid:61)(cid:3)(cid:71)(cid:70)(cid:68)(cid:65)(cid:70)(cid:61)(cid:3)(cid:61)(cid:78)(cid:61)(cid:70)(cid:76)(cid:3)(cid:71)(cid:70)(cid:3) member care are currently in place, rience. proaches, Pallone said, rather than Sheehan said. They focus on improv-
but do not fully accomplish the goal of implementing a fully integrated care ing care coordination for consumers
(cid:63)(cid:107)(cid:98)(cid:93)(cid:90)(cid:114)(cid:37)(cid:3)(cid:70)(cid:90)(cid:107)(cid:92)(cid:97)(cid:3)(cid:43)(cid:45)(cid:37)(cid:3)(cid:43)(cid:41)(cid:42)(cid:48)(cid:90)(cid:109)(cid:3)(cid:47)(cid:51)(cid:44)(cid:41)(cid:105)(cid:39)(cid:102)(cid:39) integrated health care management,” Snyder budget model all at once across the state. with mental health, substance abuse
said Blue Cross in its pilot proposal. But Pallone said all pilots would and developmental disorders. Some
from the campus of the University of Detroit Mercy “With claims data and care plans split Early last year, Gov. Rick Snyder’s have complete financing of behavior- models also include innovative val-
to celebrate the work and impact This Old House had on Detroit across multiple payers, neither entity proposed fiscal 2017 budget called for al and physical health care services. ue-based payment models to im-
has a complete picture of the mem- the state to consider combining the “Financing would come to the prove efficiencies.
(cid:63)(cid:94)(cid:90)(cid:109)(cid:110)(cid:107)(cid:98)(cid:103)(cid:96)(cid:3)
ber, which inhibits the ability of both state Medicaid program’s physical health plans and then payments “We want to integrate the care, not
(cid:109)(cid:97)(cid:94)(cid:3)(cid:97)(cid:104)(cid:102)(cid:94)(cid:104)(cid:112)(cid:103)(cid:94)(cid:107)(cid:108)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:109)(cid:90)(cid:101)(cid:94)(cid:103)(cid:109)(cid:3)(cid:95)(cid:107)(cid:104)(cid:102)(cid:3)
entities to effectively coordinate ser- and behavioral health budgets. would go to (community health pro- integrate the payment,” Sheehan
(cid:77)(cid:97)(cid:98)(cid:108)(cid:3)(cid:72)(cid:101)(cid:93)(cid:3)(cid:65)(cid:104)(cid:110)(cid:108)(cid:94)(cid:51) vices in a holistic manner to meet all Immediate backlash came from grams) and providers,” Pallone said. said.
(cid:3)(cid:68)(cid:94)(cid:111)(cid:98)(cid:103)(cid:3)(cid:72)(cid:8)(cid:60)(cid:104)(cid:103)(cid:103)(cid:104)(cid:107)(cid:15)(cid:77)(cid:104)(cid:102)(cid:3)(cid:76)(cid:98)(cid:101)(cid:111)(cid:90)(cid:15)(cid:75)(cid:98)(cid:92)(cid:97)(cid:90)(cid:107)(cid:93)(cid:3)(cid:77)(cid:107)(cid:94)(cid:109)(cid:97)(cid:94)(cid:112)(cid:94)(cid:114) of the member’s needs and maximize the public men- “We would contract with private and
cost efficiency.” tal health com- public providers.” How Detroit Wayne's
(cid:70)(cid:104)(cid:93)(cid:94)(cid:107)(cid:90)(cid:109)(cid:94)(cid:93)(cid:3)(cid:91)(cid:114)(cid:51) Blue Cross said it could improve munity, which pilot would work
care coordination by speeding up the collectively ‘Patient-centered’
(cid:60)(cid:97)(cid:107)(cid:98)(cid:108)(cid:109)(cid:114)(cid:3)(cid:70)(cid:92)(cid:61)(cid:104)(cid:103)(cid:90)(cid:101)(cid:93)(cid:3)(cid:90)(cid:103)(cid:93)(cid:3)(cid:70)(cid:90)(cid:107)(cid:101)(cid:104)(cid:112)(cid:94)(cid:3)(cid:76)(cid:109)(cid:104)(cid:110)(cid:93)(cid:90)(cid:102)(cid:98)(cid:107)(cid:94)
process for identifying patients who called Snyder’s Because Detroit Wayne, Oakland
require behavioral health or physical budget proposal In MAHP’s pilot proposal, Pallone and Macomb and its contracted
(cid:76)(cid:105)(cid:94)(cid:92)(cid:98)(cid:90)(cid:101)(cid:3)(cid:96)(cid:110)(cid:94)(cid:108)(cid:109)(cid:108)(cid:3)(cid:98)(cid:103)(cid:92)(cid:101)(cid:110)(cid:93)(cid:94)(cid:51)
health services, as well as using a sin- a takeover of the said Medicaid HMOs agree to take agencies see patients with mental
University of Detroit Mercy President (cid:58)(cid:103)(cid:109)(cid:97)(cid:104)(cid:103)(cid:114)(cid:3)(cid:64)(cid:90)(cid:107)(cid:98)(cid:91)(cid:90)(cid:101)(cid:93)(cid:98) gle information technology system, public mental care of patients the same way the health issues on a daily basis, Hock-
Director of Public Affairs for the Land Bank (cid:60)(cid:107)(cid:90)(cid:98)(cid:96)(cid:3)(cid:63)(cid:90)(cid:97)(cid:101)(cid:94)(cid:3) simplifying prescribing for doctors, health system prepaid inpatient health plans ad- ing said they are in the best position
removing access barriers to patients, and a recipe for minister their contracts with the to coordinate physical and behavior-
(cid:90)(cid:103)(cid:93)(cid:3)(cid:104)(cid:109)(cid:97)(cid:94)(cid:107)(cid:108).
assigning care coordinators to each Brian Calley: disaster. state. al health services.
patient and conducting regular pro- Pushed back on But Lt. Gov. “We are advocating, on the con- “We have a much closer relation-
vider team meetings. proposal last year. Brian Calley tractual side, that what is in the 10 ship with them and can reach out to
WATCH
“We believe that a comprehensive pushed back, ex- PIHPs, we pull out all relevant re- those consumers, not by coordina-
THURSDAY, March 30
care delivery model will promote pos- plaining that the public mental health quirements and put those into our tion at the financial level, but at the
itive health outcomes for enrollees in provider system would remain intact. contracts,” Pallone said. “We are full- patient level,” Hocking said.
9PM ET Michigan’s Medicaid program,” said Calley suggested the governor’s in- risk entities and are paid on a capitat- But Hocking said finding a prima-
Heidi Chan, market president with tention was only to replace the 10 re- ed (per member per month) basis ry care physician is a huge hurdle for
(cid:77)(cid:97)(cid:90)(cid:103)(cid:100)(cid:3)(cid:114)(cid:104)(cid:110)(cid:3)(cid:109)(cid:104)(cid:3)(cid:104)(cid:110)(cid:107)(cid:3)(cid:108)(cid:105)(cid:104)(cid:103)(cid:108)(cid:104)(cid:107)(cid:108)(cid:51) Blue Cross Complete, in an email gional prepaid inpatient health plans using the state’s rate-setting meth- people who have mental health is-
statement to Crain’s. with the Medicaid HMOs for greater ods.” sues and are not in a Medicaid HMO.
“A model that would more closely integration of services. The PIHPs cur- Under Blue Cross’ proposal, “There are a lot of primary care
integrate medical and behavioral rently receive state funding and con- MDHHS would award contracts to doctors who don't want to accept the
health is the wave of the future for the tract with about 46 community men- Medicaid health plans and pay the Medicaid rate. Part of our proposal is
program,” she said. “Aligning incen- tal health agencies and another 83 plans based on monthly capitation those who participate with us, con-