Episode 326- The Cost Squeeze In Health Care. With Rob Casalou

This episode of The Common Bridge is part of a special 21‑part series of interviews recorded with healthcare leaders from across Michigan during the 2026 Mackinac Policy Conference, in partnership with the Michigan Health and Hospital Association

Health care isn’t just a line item anymore, it’s the issue that keeps showing up in every hallway conversation. From the 2026 Mackinac Policy Conference, we sit down with senior health care executive Rob Casalou to get a clear-eyed view of what’s pressuring hospitals in Michigan and across the country, and why the usual policy debates are starting to miss the real story. 

We compare what Rob sees across multiple states, from Michigan’s purple-state gridlock to places like Iowa, where lawmakers are moving to penalize inappropriate insurance claim denials. We get specific about how “denials” can shift from legitimate documentation checks into a strategy that delays payment and inflates administrative costs. We also talk about why states as different as California and Idaho still end up wrestling with the same core topics: 340B drug pricing, site-neutral payments, hospital-based reimbursement, and the challenge of explaining any of it in plain English that connects to patients and communities. 

Then we zoom out to the bigger warning lights. Rob explains why HR1 and upcoming Medicaid revenue hits, combined with simultaneous changes to 340B and site-neutral rules, could put some hospitals at real risk. We also ask the question that keeps coming up in Michigan health care finance: if Medicare and Medicaid now represent the bulk of patients, how do we modernize those programs instead of constantly cutting around the edges while carrying the administrative costs of a fragmented system? 

If you care about Michigan health care policy, hospital sustainability, and what actually drives costs, listen through and share it with someone who still thinks this is just about “waste.” Subscribe, leave a review, and send us your take: what’s the first fix you’d make?

Transcript

This episode of *The Common Bridge* is part of a special 21‑part series of interviews recorded with healthcare leaders from across Michigan during the 2026 Mackinac Policy Conference, in partnership with the Michigan Health and Hospital Association. In these short conversations with his guests, Rich explores regulation, cost pressures, workforce challenges, and the future of health care in Michigan and around the country.

Rich Helppie  

We’re at the Mackinac Policy Conference on behalf of the Michigan Health and Hospital Association and *The Common Bridge* podcast and Substack page. We’re talking today with a very senior health care executive, who has been chief executive in more places than I care to name, Rob Casalou. Rob, great to see you, my friend.

Rob Casalou  

Nice to see you, Rich. Thanks for having me.

Rich Helppie  

How have you been, and how’s the conference been?

Rob Casalou  

The conference is—every year is a little different. This year it’s an election year, so everyone’s got their election wings on, and there’s a lot of talk about the midterms and a lot of anxiety up here this time around.

Rich Helppie  

Indeed, and healthcare is front and center this year. We’re not talking about too many other things. You know, climate, economics, interest rates—those kinds of things you’re not hearing a thing about. But we are certainly hearing about healthcare.

Rob Casalou  

Yeah, well, we’ve been on the menu for the last two years with what happened in D.C. and all the discussion here in Michigan and across the country. So I’m not surprised. And let’s face it, healthcare is growing enormously expensive every day, and it’s unsustainable the way we’re doing it.

Rich Helppie  

Indeed. We have to look at fixing the system; it can’t be fixed by the components. Now, you’ve been chief executive of health systems in Michigan. You’ve been health system CEO of multiple systems you’ve been responsible for, and in recent years you’ve also taken some responsibility for Trinity outside of Michigan—correct? One perspective we have not had a chance to talk to anybody about today is: how are we doing compared to other states? Are we doing some things better, some things worse? What are you seeing out there?

Rob Casalou  

Well, we’re seeing a lot of variety. We’re in 25 states. I cover about nine of those—everywhere from California to Idaho. When you start talking about the politics in the states we’re in, they’re very different. Michigan is clearly a purple state, no doubt about it. But when I go to our hospitals in Iowa or California or Idaho, it’s more homogeneous politically.  

I’m seeing some interesting things. For instance, we’ve talked a lot about denials being a big issue, with commercial payers using denials as a strategy not to pay. The state of Iowa passed a law recently penalizing commercial insurers for denials.  

How does that work? Well, we’re going to see how it works, because this bill just passed. But I think the Iowa legislature, which is largely Republican and conservative, has listened to the healthcare community saying, “No more.” I also think there might be a little guilt in all of this, because when HR1 got passed—largely by a Republican majority in Congress—it hurt healthcare. It hurt it in states that rely on those voters. So I think some of the more red states are now looking at what they can do to help hospitals, believe it or not.  

Michigan right now is swirling on issues that other states are kind of landing the plane on—like 340B, like denials and related issues. You don’t see many bills getting passed in the Michigan legislature, because there’s gridlock on those issues.

Rich Helppie  

I see. Denials would be a fascinating topic. But if you penalize someone for issuing a denial that they ultimately approve, wouldn’t that give them more incentive to sustain the denial? That’s why I’m curious how that might work.

Rob Casalou  

I think the goal is to be more reasonable about it. There are different ways to deny. You can just say, “I’m not going to pay,” and come up with a technical, flimsy reason to deny. Or you can ask for more information—maybe the medical record isn’t complete. There’s legitimacy in making sure claims are appropriately paid. But a lot of insurers have taken a lot of liberties with that. Many of the big nationals, like United and others, have done that, and I think some states are saying, “Enough. We’re not buying it, and we’re going to put more restrictions on your ability to do it.”

Rich Helppie  

I can’t think of two states more different than Idaho and California. They’re very different. What are you noticing in the contrast between those two, and how does it relate to our state here?

Rob Casalou  

One thing that’s actually true—and there’s some humor in it—is what I heard when I was in Boise just a week ago. The population in Idaho is growing; Boise is exploding right now. I asked, “Where is it coming from?” They said it’s political refugees from California and Oregon. I asked, “Are you kidding me?” and they said, “No, it’s actually true.” People are choosing where they live based on their beliefs, values, and politics, and I’ve been watching that.  

In states like Idaho, which are extremely conservative, when we come in as a faith‑based system it gets pretty tricky. They have very high standards about things like end‑of‑life care and beginning‑of‑life care. We’re challenged as a faith‑based organization in some of those states, because they hold us to a certain standard there, and the bishops and others are very involved.  

But politically and policy‑wise, everyone is talking about the same things. 340B, site‑neutral payments—all the issues we talk about are the same topics in all the states; they’re just wrestling with them in different ways.

Rich Helppie  

Is anyone doing a good job with them?

Rob Casalou  

I can’t say that with a straight face. I’d say the Iowa example on denials is a good one. Maryland also has a very unique reimbursement model; we’re in Maryland as well. They’ve had a kind of global budgeting system there for decades, and it’s now being looked at as a potential reimbursement model across the country. They’re experimenting in Maryland—many people don’t know that. It would be worth watching Maryland for a bit to see whether their new pilot, the way they’re going to redo the program, could make sense in other states.

Rich Helppie  

Let’s turn to the MHA for a bit. The MHA has a long, storied history. It’s the only association of its type that has 100% membership. When you look at the MHA, what kind of job do you want to see them doing, and how are they doing?

Rob Casalou  

I’d answer that the same way I’d answer for our industry: we’re sometimes our own worst enemy. Let me use 340B as an example. We’ve been fighting pharma over 340B. It’s not even a taxpayer issue—we all know that. It’s pharma money going to hospitals and to people. We’ve never put a face on 340B. We’ve never said, “Here are the people who actually benefit from this.”  

This isn’t about hospitals’ bottom lines; it’s about the people in our communities who benefit. We’ve done a really lousy job of humanizing some of these programs. We get caught up in the technical side.  

The MHA, like all of us, can do a better job explaining the benefits of these programs and making it clear this isn’t about padding bottom lines. With site‑neutral payments, everybody’s eyes roll back in their head—what does that even mean? Hospital‑based pricing and all that. These archaic structures were put in place for good reasons at the time, and those reasons may still be valid, but everyone’s forgotten them. There’s no institutional memory.  

So the MHA and industry leaders all have to keep coming forward, having conversations, and educating people. I feel like that’s half the battle right now.

Rich Helppie  

Indeed, that makes a lot of sense to me. If public service announcements were humanizing the issues—“Ask your legislature if 340B is good for you,” instead of just “Ask your doctor if this is right for you”—it would actually ease the public‑policy job for the MHA in Michigan. And of course, they do a great job as a convener and getting people to talk.

Rob Casalou  

Oh, yeah. They’re a powerful voice because they represent us. When they talk to a legislator, that legislator knows the MHA is speaking for 134 hospitals. They’re not speaking just as a generic lobbying organization. Because of that member unity—and I’ll say this, having worked in other states—this is by far the strongest hospital and health association in the country that I’ve come across. We have some good ones elsewhere, but from my experience, MHA stands above them.

Rich Helppie  

Indeed, I’ll echo that. I’ve had many of them as clients and spent a good amount of time with them, and Michigan is clearly the gold standard as far as that goes. So, good job, Brian Peters.  

Rob Casalou  

Yes—Brian and the team have done a great job.

Rich Helppie  

Rob, when you think about healthcare policy and what we could do as a state or as a nation, I’m sure there’s a long list of changes you’d like to see. If there were one or two things you think would really make a difference, what would they be?

Rob Casalou  

One big thing is that we have challenges coming at us from every direction. HR1 took a huge bite out of us, and there’s more coming than has actually hit yet. When that fully lands next year, we’re going to take a devastating loss of revenue on Medicaid. At the same time, 340B, site‑neutral payments, and other issues are on the table.  

If they all go the wrong way for us, this industry is going to be crippled. I’m not being hyperbolic; it would be devastating. One of my hopes is simply: stop—you’ve done enough. Take a breath and see what happens when HR1 actually goes into effect, because you may be losing hospitals and people along the way. If you implement major cuts to 340B and site‑neutral at the same time, forget it—the system could collapse. They really have to be careful.  

If policymakers truly want to do something meaningful, then tackle the structure of the system itself. Everyone says our Medicaid system is so complex and that we’d never design it this way if we were starting over. Okay, then start over. Don’t just keep complaining about the system and nibbling at it with more cuts; fix it.  

Seventy‑two percent of all our patients in Michigan for Trinity are Medicare and Medicaid. We’re almost a fully government‑payer organization, like every other health system. Commercial insurance is becoming a fraction of our business now. No offense to Blue Cross or anyone else, but it’s a Medicare‑and‑Medicaid show now. If we don’t fix those two programs, this is not going to work very well. That would be my policy hope.

Rich Helppie  

I would strongly support you on that, because the numbers show we’re pretty much at a government‑sponsored health system anyway—nationally we are.

Rob Casalou  

Exactly. It’s crazy because we’re not officially a single‑payer system, although we’re starting to look like one, yet we have all the administrative costs of a non‑government, non‑single‑payer system. Canada, for example, doesn’t have insurers and all the extra layers we do. I’m not saying we should be Canada, but they don’t have the same layers of cost that we’ve built into our system. We have to think about that.

Rich Helppie  

Yet their patients are lined up at health systems in the United States because they can’t get access.

Rob Casalou  

We treat a lot of Canadian patients.

Rich Helppie  

Some of that spend is capacity that we’re effectively buying in the U.S.

Absolutely.  

We’ve been talking with Rob Casalou, one of the most senior chief executives in healthcare. On behalf of the Michigan Health and Hospital Association and *The Common Bridge* podcast and Substack page, this is your host, Rich Helppie, signing off.

Sources