Uncompensated Care and the Safety Net

06.04.2025 | 1 min read

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About the Show

Uninsured individuals often rely on hospitals for emergency care, the most expensive part of the health system. That cost doesn’t disappear—it shows up in everyone’s insurance premiums. This episode helps reframe affordability by examining how charity care, Medicaid, and federal subsidies work together to manage that cost upstream.

In this episode, we explore the hidden costs of uncompensated care, how hospitals and insurers work together to support vulnerable populations, and the impact of federal and state policy decisions on health insurance coverage rates in Michigan.

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Transcript

Chuck Gaidica:

Welcome to the special series of a Healthier Michigan Podcast, coming to you from the Mackinac Policy Conference where we're taking a closer look at one of the most urgent challenges in healthcare today, affordability. In this episode, we're discussing something many don't consider but that affects all of us, uncompensated care. When someone doesn't have health insurance, it can be common to go to the emergency room because hospitals must provide treatment. But that care often goes unpaid by the individual receiving the care and the cost doesn't just disappear, it gets spread across the health system showing up in higher premiums for people who do have insurance. So, how do we reduce these hidden costs? What role do charity care, free clinics and state and federal policies play in keeping people covered and preventing emergency care from being the only option?

We'll break it all down with the help of hospital leaders, insurers and policy makers who are working toward affordability and access for everyone in Michigan. Our expert guests include Rob Casalou from Trinity Health, Andy Hetzel from Blue Cross Blue Shield of Michigan, Congresswoman Debbie Dingell and Michigan Representative Curt VanderWall who are helping us to connect the dots between coverage, community care and cost.

Chuck Gaidica:

So, dropping by our big, beautiful blue backdrop and table is Andy Hetzel who's vice president of corporate communications at Blue Cross Blue Shield of Michigan. It's good to see you.

Andy Hetzel:

Well, it's good to see you and I'm happy to be here finally. As the executive producer of this podcast, I'm a guest for the first time so I'm very excited.

Chuck Gaidica:

Don't you have people who could pull some strings? You could have been here a long time ago, yeah. It's great to see you nonetheless.

Andy Hetzel:

Thank you, Chuck. They prefer to keep me behind the scenes.

Chuck Gaidica:

Oh, okay.

Andy Hetzel:

But I'm here to talk about something very important to us today so I'm pleased to be here.

Chuck Gaidica:

Well, and we've been talking about this on the podcast, when people go without insurance, it obviously makes healthcare insurance or healthcare itself more expensive for all of us. Can you explain what happens in this process because I don't think everybody computes this in their mind? They get their blue card, they go and they get treated but there is a cost to this.

Andy Hetzel:

There is but we need to start with the people first. We need to talk about the people who actually are uninsured and what we as organizations that are involved in healthcare in Michigan do to support our broader community and the needs of people. And Blue Cross is significantly invested in this effort but so are our partners in care especially the non-profit health systems in Michigan. So, we have a state that's fairly unique, most of our health systems are non-profit which means that they are mission driven to open their doors to everyone through their emergency rooms who needs emergency care. Many of those people come to the emergency room because they don't have health insurance and they don't have a regular doctor relationship and they find themselves in situations that are very desperate and they wind up in the hospital emergency room which is a very expensive place to receive healthcare. And considering that many of those conditions are very bad at the time that those people seek care, they become complex and expensive to treat.

Sometimes, oftentimes, a health system will try to collect the cost of providing that care back from the person receiving it if they don't have insurance. Most of the time, that effort is unsuccessful and so the health system can't collect on those folks and so they charge off the cost and it goes into a part of the ledger that every year they compute, it's called charity care. Every non-profit hospital does it and those costs eventually find their way back to be paid for by the profitable side of that health system's revenue base which is commercial insurance like Blue Cross Blue Shield of Michigan, other HMOs in Michigan, we pay part of the hospital costs for that charity care through our negotiated rates. And so, that's where the connection point happens between people without insurance, the health system that provides the necessary care because they have a mission to support those people and the commercial payers and our members and customers.

Chuck Gaidica:

So, there are many ways to create a stop gap, I will, one of them could be a free clinic and I know that Blue Cross has been involved with some of these organizations that are partners, really true partners for decades, right?

Andy Hetzel:

Yes. The non-profit network of free clinics in Michigan does extraordinary work. Volunteer doctors and nurses in the community keeping access points available to people who are without insurance for some reason. They've lost a job, they're between jobs, they can't afford the subsidized health insurance on the marketplace, they earn too much money through work to qualify for Medicaid, they're uninsured so there's a gap there in the safety net. And we've helped fill that gap by providing financial support to these free clinics and, over the last 18 years, Blue Cross Blue Shield of Michigan is the largest private funder of our network of free clinics. So, about $18 million we have given to that network of clinics to keep their doors open, provide essential services to people who are underinsured in our communities and, down the line, helping to prevent some of that uncompensated care that we were talking about in hospitals at the beginning of our conversation.

Chuck Gaidica:

And examples that you could give us of investing in primary and preventative care that seems to help this idea of avoiding these expenses being passed through. Preventative care we've talked about for years, a lot of us practice that in our own lives but you don't really assign high value to staying healthy in advance because sometimes stuff happens.

Andy Hetzel:

Stuff happens and, when you're uninsured, you simply do not seek out preventive care. You don't get vaccinated, you don't go for a check-up because, when you're uninsured, you have to pay out of pocket for those services and it's sometimes very tough to do on a family budget when that budget is already strained. And so, the free clinics that we support in Michigan have expanded their use of preventive care services in the clinic setting so patients can go in, they can see a doctor, they can have conversations with that physician about their health conditions, they'll get advice, they can get vaccines, they can get preventive care services in the free clinic setting that keeps their health better than otherwise, prevents those conditions from worsening like we were talking about at the beginning and those folks ending up in the hospital emergency room unable to pay.

And again, all of that translates into better care for people, support for people in need in our communities, support for our non-profit health system partners and, down the line, support for our members and customers through better affordability of health insurance.

Chuck Gaidica:

Well, so you're explaining this connecting point between insurers, policymakers, communities, so many titans of those industries are walking around here on Mackinac island this week. And how did they all support the safety net? Is it viewed the same as it is by Blue Cross, this idea of tightening up the netting, if you will?

Andy Hetzel:

Yeah. The safety net needs to be thought about as a continuum, okay, because in every community, you have people who are less fortunate, you have people who are more fortunate. The more fortunate people can access services in the healthcare system more easily than people who are less fortunate and so, as an organization that serves all people in Michigan everywhere in Michigan, Blue Cross is invested in making sure that access points are available whatever your situation. So, we're very proud to serve about 5 million members here in Michigan and around the country with excellent health insurance and we're proud that our health insurance gets them in the door to see their doctors, to have their surgeries, to have their babies in the hospital, provide the services necessary to keep them healthy and while we're proud of that.

But outside of that, we're also equally as proud to support the safety net in our communities to support people in need and really deliver necessary services in the healthcare system in concert with physicians and nurses and hospitals to really provide that continuity of care access points here in our state to make sure that we're taking care of people.

Chuck Gaidica:

Well, it's really good to know. It's good to know for all of us because explaining it the way you have brings home the idea that it is eventually possibly costing us all something.

Andy Hetzel:

Yeah. And these free clinics provide an essential service, they serve about 400,000 emergency visits they have prevented over the last 20 years by serving people at the community level in the community setting. And those avoided emergency room visits have translated into $200 million in avoided costs in our health system that have not made their way into the premiums that people pay for their private health insurance. So, that story is about us all being in this together and, by working together and supporting each other, we can help people who pay for private health insurance, we can help people without health insurance, we can help make our communities healthier and work together as partners.

Chuck Gaidica:

It's all good stuff. Andy, it's good to see you.

Andy Hetzel:

Good to see you, Chuck.

Chuck Gaidica:

Yeah, thanks so much.

Andy Hetzel:

Thanks.

Chuck Gaidica:

Rob Casalou joins us, he's president and CEO of Michigan region Trinity Health. Good to see you as always.

Andy Hetzel:

Yes, great to be here and good seeing you too.

Chuck Gaidica:

Yeah. Same time next year, right? Yeah, it's like Groundhog Day of the movie, I get to see you again but that's a joy.

Rob Casalou:

Yeah.

Chuck Gaidica:

A lot of the focus now in this conference is about affordability of healthcare. Charity plays a big role in that as well, right? So, why is it important for us to understand that charity connection to hospitals?

Rob Casalou:

Yeah. Well, all hospitals provide some level of charity care. For us at Trinity, there's two reasons. One, it's part of our mission, it is part of what we stand for as a faith-based health system but also it's our obligation to the community, we're not for profit, we need to return value to the community. And also, charity care is important because, if we don't provide it, people don't get care and then they get sicker down the road and then they end up in an emergency room and the costs are even higher. So, there's a lot of reasons to provide it.

Chuck Gaidica:

Well, that's an interesting thing when you mention emergency care because that's the first line of defense or at least the first thing people think about often is let's get to the emergency room. And there's this idea that, if you get to the emergency room and you can't afford to pay the bill, well, that's just the way it works but that really is something that affects all of us down the road, right?

Rob Casalou:

Absolutely. And when someone comes into the emergency room, we are not doing wallet biopsies, okay? We're not looking at their ... But then later on, emergency rooms are very expensive so you have to think about those costs, those bills come due and so that's when we have a financial assistance policy that gets in place because we don't want to have anyone become medically bankrupt.

Chuck Gaidica:

And I guess for me as a consumer, just wearing that hat for a minute, just walking around everyday life, I've never really given as much thought to unpaid care as I had in thinking about even talking to you today.

Rob Casalou:

Oh, yeah. Well, we're thinking a lot about it now because it's gone up so substantially over the last couple years in particular.

Chuck Gaidica:

So, when you look at the universe of what's happening in insurance, what solutions do you think would help expand insurance coverage and for what? What do people need? And when they're in need, what could be better for them?

Rob Casalou:

Well, right now, the hot topic is Medicaid and what's happening in the federal level and we're looking at some bad things happening with Medicaid and a lot less of our community on Medicaid going forward. That means our uninsured ranks are about to grow dramatically and so our charity care will go up as a result. Now, when you look at the people that are in the gap, the people who are now not going to have Medicaid but they can't afford private health insurance, they're in that no man's zone, right?

Chuck Gaidica:

Even through the exchange, they can't afford that.

Rob Casalou:

They can't afford it. So, the solution is really may be more about how can we help them in that gap, how we can provide insurance at a lower cost. Or in some cases, it's about social needs, it's more about their access to food or housing, what they call the social determinants or influencers of health because, a lot of times, those lead to consuming healthcare. If we can keep them from consuming healthcare, we can then avoid a lot of that charity care.

Chuck Gaidica:

So, when you look to support vulnerable patients then part of it is charity care but this other part is really getting ahead of the curve to extend your health span, right? You're trying to get your health span, not just your life span, we all want to go as long as we can but to try to be healthy along the way.

Rob Casalou:

Absolutely. Every patient who comes in our hospitals or in our clinics, our medical offices are screened for social determinants. We want to know are they isolated, can they read, do they have literacy to understand what we're telling them, do they have food access, all of those issues. And what we do is connect them with resources to try to solve those because often solving those solves some of their health issues as well.

Chuck Gaidica:

And very often, if you live in a food desert, you don't have access, it may be the party store at the gas station is the closest place to find food and we all know those choices are not always the best. Not disparaging those guys but it's not always the greatest choices.

Rob Casalou:

Yeah, unfortunately ... And we have a lot of food deserts in Michigan and where they are it's processed food, it's high salt, it's high fat and, obviously, that leads the diabetes and other issues.

Chuck Gaidica:

So, do you feel your job is also educating the public, not up to the point in which you're seeing them in an emergency situation but even in preventative care, right?

Rob Casalou:

We've made a tremendous investment at Trinity in that. We have farms now at three of our hospitals, we provide a food hub in Ann Arbor, we provide housing options. We're outside of our classic what I'll call traditional healthcare mode in a lot of the investments that we make.

Chuck Gaidica:

Anything else exciting that's happening right now in the Trinity system because life in general is changing at the speed of light sometimes, yeah?

Rob Casalou:

Well, I think right now what we're trying to do, we're in 25 states and Michigan's our largest presence, which I'm happy to say, but we're in 25 states. All those states are in a different place both politically, economically, what's going on with Medicaid. I think for Trinity right now, what we're trying to do is remind everyone we're here to stay and we're going to solve these issues but we're concerned right now about the charity care, the rise and it's doubled for us in two years here in Michigan, the unpaid cost of Medicaid. So, these are becoming burdens we're trying to figure out how we're going to solve in the years to come.

Chuck Gaidica:

And when you say in the last two years, that's looking in the rear-view mirror, that's not including what's all been talked about in recent time with Medicaid?

Rob Casalou:

Oh, yeah. In real dollars for this year that we're in that ends in June, our fiscal year, $43 million of actual unpaid care, $20 million of uncompensated care from Medicaid just in Trinity Michigan. Multiply that by all the health systems, it's a huge number, yeah.

Chuck Gaidica:

Well, we're glad you're here to help us navigate that moving forward. It's good to see you, Rob.

Rob Casalou:

It's good seeing you too, Chuck. Thanks for the invitation.

Chuck Gaidica:

Oh, you're welcome. Congresswoman Debbie Dingell is with us, Michigan sixth district of the US Congress. It is nice to see you.

Congresswoman Debbie Dingell:

Chuck, it is great to see you.

Chuck Gaidica:

And may I speak of your shoes?

Congresswoman Debbie Dingell:

You may speak of my shoes.

Chuck Gaidica:

They're all shiny and glittery they look like Dorothy's shoes.

Congresswoman Debbie Dingell:

Well, some of my friends are trying to get me out of heels particularly in parades because I've been known for walking in parades for decades in heels. So, I said, "Okay, I'll go to Skechers but they're going to look good."

Chuck Gaidica:

Do they feel good though all the hoofing that we have to do?

Congresswoman Debbie Dingell:

Yeah. Actually, they are. I have to adjust to Skechers from heels but yes.

Chuck Gaidica:

Well, they look great.

Congresswoman Debbie Dingell:

Thank you.

Chuck Gaidica:

Yeah, it's really good to see you. So, we're talking a lot this year about affordability. I'm hearing a lot of people from county governments to hospital systems to non-profits talk about partnerships. And I'm so encouraged that, I just mentioned this a minute ago, cats and dogs are starting to live together. We've finally figured out that we can have partnerships across political aisles and from government to private and beyond. Isn't that encouraging to you?

Congresswoman Debbie Dingell:

Yes, it is encouraging. I've spent my whole life trying to build those partnerships and bring people together. Though, quite frankly, I wish I was as hopeful, optimistic as you are because I also think it's more partisan than I've seen in a very long time especially when it comes to issues like healthcare and Medicaid and food assistance so let's pray.

Chuck Gaidica:

Well, I'll do that and then let's talk a little bit briefly, we could go on for a while, federal programs, Medicaid, ACA subsidies, they've all helped people get insurance. Why do you think keeping these programs in place is important for healthcare?

Congresswoman Debbie Dingell:

I know why they're so critical because we've expanded the number of people that have access to healthcare, we've expanded children and families and we ... I'll never forget when Rick Snyder, our Republican governor, expanded, took advantage of the Affordable Care Act and actually John Dingell and Rick Snyder stood on the stage at then Oakwood, now Corewell and it was like two little kids, they knew that they were going to make a difference in people's lives. And the bills that we've been considering, the bill we passed in the House which I pray is not going to be the final bill, is going to rip health insurance away from millions of people across the country, 14 million to be exact but, here in this state, hundreds of thousands and that worries me.

Chuck Gaidica:

So, is this the biggest risk in your view of people losing coverage? The single biggest risk or are there others?

Congresswoman Debbie Dingell:

Well, the Medicaid bill that just passed obviously is the big one right now, yes.

Chuck Gaidica:

So, when you look ... Let's talk about being optimistic. You're at a conference here, you're seeing a lot of different people, speaking to different people and they're approaching you, what makes you optimistic about trying to make healthcare more affordable?

Congresswoman Debbie Dingell:

I don't think right now we're talking ... We need to make healthcare more affordable. I'm working with my buddy Carter who's a Republican from Georgia on how do we make prescription drugs more affordable, how do we lower the costs. Hopefully, someday we'll get to the bills that we've introduced together, we've got to get through this reconciliation and budget period first. But right now, we're not talking about making healthcare more affordable, we're talking about how do we ensure the people that have it continue to have access to it, that's the number one fight right now.

And the other thing that was in this bill, Chuck, that really worries me is it's the biggest cut in food assistance that we've seen in the history of this country. I just don't think a child should go to school hungry and we saw the report yesterday of how many children in Michigan are homeless that were going to school in this state. Yeah, these are moral obligations we have to try to give every child a healthy start, a good start.

Chuck Gaidica:

And we've talked to hospital leaders who have also said that some of these ideas of getting all of us healthy but especially with kids with food insecurity, some of the tangible results may not be known for 20 years. But how can you go to school and learn if you don't have a breakfast? It seems really basic and yet we're still fighting some of these battles, right?

Congresswoman Debbie Dingell:

We're fighting these battles more than we've had to in recent years and that's what's at stake right now and that's what I'm going to fight for tooth and nail.

Chuck Gaidica:

So, uncompensated care in hospitals is a big one and that leads to affordability. All of us tend to have to pay for that in one way or another, maybe we don't see it coming. So, this idea of getting people healthy in advance is one way of maybe we stay out of the ER but that's another part of this puzzle, it's another big piece.

Congresswoman Debbie Dingell:

So, if people have Medicaid or they have access or they have health insurance, they'll hopefully do more preventative care, go to the doctor when they're sick, they're not afraid to call until they wait until they're so sick that they end up in the emergency room. And you are correct about uncompensated care increases the cost of healthcare for entire communities. So, it's another reason why we want to get preventative care right now, preventative medicine, teach people healthy ways, teach people how to eat correctly, get the immunizations that they need. If an immunization is free, they're going to get it and that helps keep people healthy. The Affordable Care Act covers flu shots and now we're having a debate about what immunizations people should be getting and it's a very interesting time in our country's history.

Chuck Gaidica:

And we've also heard from people on this podcast in the past couple of days, you've talked about food insecurity. If you don't have transportation to go get a vaccine, a flu shot, you may wind up sicker and wind up in the ER at some point. So, there are all these pieces that point to outcomes that we all don't want to hear about.

Congresswoman Debbie Dingell:

Well, we got to hear about it and we got to work on it together.

Chuck Gaidica:

So, working on it together includes lawmakers working with organizations like Blue Cross Blue Shield of Michigan making things better. Are you encouraged there by the partnerships that you see and hear about?

Congresswoman Debbie Dingell:

I've always worked with Blue Cross Blue Shield and, last night, I had some of the hospital leaders and Blue Cross Blue Shield in one room and said, "We're all doing okay, right?" And there've been some tough negotiations but, quite frankly, I heard we were able to get Michigan's 2025 Medicaid application approved by HHS in January and the hospitals in Blue Cross Blue Shield worked together on that because they knew the patients that they were going to take care of needed that and that's what we all need to be doing more. All of these issues that keep our communities healthier, that help take care of our children, take care of our seniors, take care of working men and women, if we can all support each other, nurture each other, we're all healthier and better off for it.

Chuck Gaidica:

And while we do tend to focus a lot on kids because they are the future, the senior population, the increasing age of the average age of Americans points to all kinds of other issues that are coming at us like a freight train.

Congresswoman Debbie Dingell:

They are. When I've been out and I've had people just burst into tears, a woman whose husband has Alzheimer's who's in a nursing home said to me, "Are they going to throw them out? Am I going to lose my coverage?" Medicaid is the largest payer of long-term care in this country and many people just need a helping hand, they want to stay active and alert and in their own communities, it's why I've been trying to get home with community-based care passed, we've got a million people on the wait list right now. So, there are a lot of things we're working on together, Blue Cross Blue Shield has been a great ally as many of the healthcare groups and community groups, senior groups, caregiving groups have all been as well.

Chuck Gaidica:

Well, Debbie, it's good to see you.

Congresswoman Debbie Dingell:

Chuck, it's good to see you.

Chuck Gaidica:

Thanks. Representative Curt VanderWall is here with us, 102nd district Michigan House of Representatives. Good to have you with us.