The article below is from MiBlueDaily, which is affiliated with Blue Cross Blue Shield of Michigan.
MiBlueDaily
March 4, 2026
Every hospital that is part of the Blue Cross Blue Shield of Michigan provider network has a contract that determines how much your insurance pays for each service provided there. These contracts are routinely negotiated and Blue Cross’ role is to represent you – serving as your negotiator to keep the cost of hospital services from growing too fast.
Payment for hospital services constitutes nearly half of the health insurance premium, and these costs have been growing because of many factors, including hospital system consolidation as big systems like Michigan Medicine get bigger and leverage their scale to gain a greater share of each dollar.
Blue Cross has been negotiating new payment terms with the University of Michigan Health System, also known as Michigan Medicine, for many months. Michigan Medicine is demanding payment increases of 44% over the term of a new contract. This level of cost increase is unacceptable to us. While we want our members to receive excellent care that the doctors, nurses and staff of Michigan Medicine provide, those services must be affordable. Each health insurance dollar spent in a hospital ultimately flows downstream into your health insurance premiums. In this time when many Michigan families and employers are finding it hard to pay for health insurance and all their other rising costs, we must balance access with affordability.
Our proposals have been fair and responsible. They pay Michigan Medicine more, not less. They account for the same rising costs every business is facing, while also directing additional payments toward quality outcomes and better patient care. This approach of paying for better results is the heart of a payment reform movement toward value-based care.