By Wendy Ake & Suparna Bhaskaran
November 14, 2017
Detroit’s fiscal health is often held up as an exceptional case—in 2014 its bankruptcy was said to be the result of “a terrible and unique set of circumstances.” Now, though, we see Chicago, Seattle, and other cities discussed as the “next Detroit.” In particular, Puerto Rico is put into competition with Detroit—“which is the worse insolvency?” Data shows though that even between 2008 and 2013, 28 cities had entered bankruptcy or its equivalent—including six cities in Michigan, all of them in three southeast counties where over 60 percent of the state’s Black African American population lives.
There is no reason to anticipate that the problems leading Detroit to a revenue crisis will not be visited upon other cities—indeed it already has been. Many of the structural roots of Detroit’s revenue problems are familiar—large population loss from the core of the city and its exodus to regional areas, a center city badly hit by a foreclosure crisis from which it has not recovered, inadequate regional and local public transportation, shrinking state revenues, and deep racial segregation across the regional area exacerbated by these circumstances.
These patterns are echoed in cities throughout the US—in some cases with less intensity than was felt in Detroit. Low-income communities of color in Detroit have faced high volumes of foreclosures, vacant properties, and ill health. Ill health and housing problems are entangled—one influences the other. And, these have historical roots. The 1940s and 50s redlining and blockbusting and reverse redlining in the 1990s and 2000s were determinants of Detroit’s current challenges. Among all US cities, in 2007 and 2008, Detroit topped the rates of national home foreclosures. By 2010 Detroit had a housing vacancy rate of 23 percent and the rate continues to be high in different parts of the city.
A new report published by the Just Public Finance program at the Haas Institute describes the relationships between Detroit’s access to water, housing, and the unrolling of Michigan’s Medicaid Expansion program—Healthy Michigan. What has and is happening on the ground in Detroit showcases what happens when decisions around healthcare policy are limited to addressing clinical care and excludes enormous opportunities to promote physical health through interventions outside the walls of the clinic. The report argues that water and sewer infrastructure and housing are key points of intervention to create better health for Detroiters. Fundamentally, the paper argues that this narrow approach to healthcare policy has become a hallmark of healthcare policy because the political debates are argued among corporate sectors of the healthcare industry. The political power of the healthcare industries greatly outweighs that of citizen advocate groups and local government actors.
The taxonomy of the healthcare industry can be organized by the following sectors—pharmaceutical, medical devices, insurance providers, hospitals, and physicians. The interests and positions among these groups are often divergent, and policy debates on healthcare may sometimes appear meaningful when they arise between these sometimes-conflicting corporate sectors.
When healthcare policy is debated on a stage where power is disproportionately in the favor of industrial sectors in the healthcare industry those forces set the frame of debate and it is narrowed to clinical interventions, such as health insurance, reimbursements for Medicaid and Medicare providers, VA hospital benefits, medical student education and training, teaching hospital funding, and incentives for employers who provide care and consumers. The accelerating cost of healthcare is left unrestrained by these arrangements and institutional relationships.
In Detroit, these dynamics are most clearly seen in two ways. The first demonstration is the way Detroit has experienced the roll out of Medicaid Expansion under the state’s Healthy Michigan Plan, a significant strength of the Affordable Care Act. The second way to see the limits and successes of healthcare policy is to consider access to housing and water in Detroit.
Detroit’s insecure provision of secure safe housing and clean water is a critical problem to solve and is an example that can be instructive for other places and people. It is a health problem—not only a housing or infrastructure problem. These systems are entangled and looking for a solution involves their simultaneous analysis. As critical infrastructure ages across the nation and as climate change adaptation raises the bar for what is demanded of it, it’s clear that Detroit is a signal of what is to come in many more places. It’s a problem in need of innovative solutions, which would be of benefit to all.
Medicaid Expansion Under the Patient Choice and Affordable Care Act, Michigan’s Healthy Michigan Plan, & Detroit
Close to a million people in Michigan depend upon the Affordable Care Act for health insurance underwritten by funds from the federal government. Under the ACA, these funds were locked-in for 10 years for states, although this arrangement is under threat in potential replacement legislation. Detroit and Wayne County residents have some of the highest enrollments under Healthy Michigan—175,000 Wayne County residents are enrolled in the plan. The net effect on the state budget has been estimated to be $553.9 million in FY 2016.
Michigan stands to lose $3.4 billion in federal funds and cuts in jobs in hospitals, clinics, construction and retail associated with the Healthy Michigan Plan. The state also stands to lose tax revenue from insurance companies and hospitals (estimated at $194 million in FY 2016). The defunding of Planned Parenthood will disproportionately impact low-income women of color in Detroit as 65 percent of Planned Parenthood patients in Michigan are low-income. This defunding will severely affect women’s health services including cancer, HIV, and STI screenings and prevention, reproductive health services, free birth control, and LGBT health services.
The 2010 Patient Protection and Affordable Care Act (ACA) was legislation with many facets and components, to say the least. Here we focus on the ACA’s Medicaid Expansion policy—which in Michigan became the Healthy Michigan Plan. The Healthy Michigan Plan was rolled out in Detroit during the city’s public finance problem and its bankruptcy process. Therefore, the ACA’s Medicaid expansion was laid out on top of a housing system not recovered from the Great Recession and a municipal revenue system that made water utility costs unaffordable for a large number of the city’s low income—and mostly Black or African American—residents.
In this study, three observations are made about the ACA, Medicaid Expansion, the Healthy Michigan Plan, and the way it touched down in Detroit. The state of Michigan was able to increase access to medical care for vulnerable communities in Detroit—people who currently and historically were disadvantaged in employment opportunities, housing, and other critical opportunity structures. Secondly, it was through the ACA, in particular the Medicaid expansion program, that the Obama administration was able to infuse large amounts of federal funds into states and distressed municipalities. While a New Deal-type policy package lacked political will, the universal aspirations of affordable healthcare “wrapped” the targeted aid for vulnerable low-income people, and in Detroit this targeted federal funds to low-income people of color. Finally, the roll out of Medicaid Expansion in the ACA occurred in the context of dramatically reduced federal grants to states during and after the Great Recession and the imposition of austerity solutions to declining public revenues. This left many state governors whose politics objected to federal “interference” in healthcare to welcome the infusion of additional revenue—especially in the case of covering the accelerating costs of healthcare.
In this way, Medicaid Expansion and the goal of a Healthy Michigan—and a healthy Detroit—are key moments to examine what it means to attend to residents’ physical health through clinical and non-clinical measures. You can make inferences about a person’s health via clinical indicators, for example blood glucose, blood pressure, mental wellness, and body temperature.
If we understand that the healthcare industry corporate sectors play a large role in determining healthcare policy, we see one of many reasons that healthcare policy maintains a focus inside of the clinic. Yes, ultimately the goal is for a person’s body to have healthy indicators—but the path to those outcomes can come from clinical interventions and interventions beyond the clinic. In fact, some studies indicate that factors outside the clinic—sometimes called social determinants of health—“have a larger impact on individual and population health than the healthcare system.” In fact, austerity itself has been associated with poor health outcomes.
Detroiters Access to Safe Water & Housing
To be able to talk about individuals’ physical health as measurable by clinical and non-clinical indicators, one has to first grasp and see the different ways physical violence is inflicted by structures and systems that exclude different people and places. Understanding the ways this happens in different places (in Detroit a main problem is based in housing and water access) can lead to better policy and strategies that promise long-term efficacy. In contrast to structures that promote inclusion, structural violence causes injuries inflicted by housing systems, infrastructure design, or disinvestment that end up barring different groups of people from the opportunities afforded to others.
In the case of Detroit, we are led to focus on the problem of well-being as a question of access to clean water and housing. Losing access to consistently safe housing and water is an existential threat which historically and currently presents challenges to individual and population health. Forced segregation increases community isolation, exclusion from quality social services, and surveillance and policing by the criminal justice system. In turn, isolation, systemic indifference, surveillance and policing deepen individual and community poverty. In addition to stripping away social safety net and wealth, forcibly segregated communities experience disinvestment, housing and educational security, meaningful work opportunities, and nutritious food.
In Detroit, while living under the burdensome conditions, communities have risen to counter that threat and its effects. Residents have organized, supported one another, created multiple versions of alternative plans for water infrastructure, and see beyond simple survival. Teachers, neighbors, families, churches, and local organizations have tried to figure out what role they can play in providing emergency assistance. Most importantly, the city and its residents see, expect, and demand more for their neighbors and community. They want the city—including its water utility infrastructure—to create a sense of belonging and inclusion. They want the city to provide secure access to housing and water. But these are minimum expectations, these are the basic components of survival. More is expected and imagined. Detroit can have greater resilience, wealth, and health than before the dawn of its current challenges.
Unfortunately, mass water service shutoffs and fee hikes are not something new for Detroit city residents. Additionally, residents have been subjected to a range of unfair and aggressive bill collection practices. These practices were brought on by many of the same conditions that led to the city’s bankruptcy, including population loss, declining property values, disinvestment, and aging infrastructure. For example, since 2005 Detroit has linked unpaid water and sewage bills to property taxes. Foreclosures are triggered not just by amounts of unpaid property taxes, but by the amount of unpaid property taxes and unpaid water bills. This accelerates the timeline of foreclosure processes and in turn speeds the buildup of abandoned properties and insecure housing for residents.
These problems rippled and amplified during the bankruptcy process as the city’s most valuable asset was inappropriately brought into the court mediated restructuring plan—the Detroit Water and Sewer District. This asset was effectively transferred to a newly created regional entity, the Great Lakes Water Authority. The city of Detroit, like many US cities, is part of a significant metropolitan regional variation and disparities in service quality and cost. Higher rates and lower quality are often associated with segregated spaces of low-income residents and communities of color, places of divestment, and depopulation. In Detroit, the fixed costs of water infrastructure coupled with decreased demand for water/sewage service contribute to rising water rates—creating additional burdens for people.
To make access to clean water difficult is to make survival difficult—water is a fundamental need for sustaining human bodies. Lack of access can interfere with temperature regulation, metabolism, the flushing of waste/toxins, hydration and other important functions. Reliable access to clean water can protect against dehydration, stroke, seizures and can protect organs, bones, muscle and blood. Harms that are clearly and easily preventable in US cities can add to one’s disease burden, quality of life, and mortality, especially if a person is already ill with a chronic or life-threatening condition or disability.
Additionally, lacking access to stable housing and clean water creates toxic stress and trauma—for adults, caregivers, and children. Losing access to clean water—and hot water—creates problems with personal hygiene and can increase personal stigma and powerlessness, which exacerbates economic and health inequalities. Living under austerity solutions to economic crises is associated with poor health outcomes. Individuals have to contend with cleaning their own human waste, sanitation and girls and women have to deal with additional stigma of how to deal with menstrual blood. These additional health burdens intensify already remarkable health disparities in marginalized groups of people and the places they live. In the case of Detroit these effects primarily fall on low-income people of color and the areas of the city where they live.
Determining Healthcare Policy
The search for healthy cities and healthy residents is the search for closing inequalities and not only closing the gap but raising the standards for everyone. As evidenced by the political theater around repeal and replace, or repeal and delay, or neglect, the ACA’s universal aspiration and targeted funding for vulnerable and stigmatized communities was not sufficiently structured to have enduring stable political support. The quest for better health outcomes for everyone, including people who suffer greater ill health, is a question of building political power, securing better housing and water and wastewater infrastructure.
While many healthcare industries found themselves opposing proposed substation legislation, the ACA remains as law but is weakened by the twin “flaws.” It is widely thought to increase government’s role in making individual decisions and it is thought to divert public resources to people who are thought to be undeserving and people who do not benefit from collective concern and empathy. For a complex arrangement of factors—the ACA being a keystone of the first Black African American presidency, American values shifting from meritocracy to resource hoarding, to the rising costs of healthcare that were not resolved by the legislation—the ACA has lost popular support. The current healthcare system, beyond the scope of the ACA, divides people into competing interest groups as private and public programs serve different groups differently—pregnant women, seniors, low-income children, low-income adults, those with employer-linked benefits, and more.
The segregation of people labeled as an Other is etched into the streets and neighborhoods of Detroit and similarly situated cities. In turn, health is segregated and read from the geographic script of who benefits or is excluded from opportunity—opportunities in the form of secure housing, sustainable infrastructure, or nearby quality health facilities. For example, a study of Ohio’s Franklin County showed that there is a 20-year difference in the life expectancy of seniors based upon the zip code of residence. This disparity is also tied to patterns of race, ethnicity, and poverty status—these are questions of place and opportunity as measures of wellness.
Often shifting alliances and posturing of different corporate spheres in the healthcare industry determine policy decisions. Each sector carries great political weight and healthcare policy proposals shift alliances. Often these differences and different interests shape decisions and debates on policy. People and citizens currently have vastly less political power than corporations. Recent efforts to “repeal and delay” or “repeal and replace” have produced an unusual alliance between hospitals, insurers, and physicians. Although for very different motivations, these corporate interests aligned with public demonstrations in opposition that leveraged citizen political power and tactics.
The corporate forces that exert extreme power in healthcare policy debates are not often motivated by public health concerns. They are motivated by corporate interest to keep healthcare policy inside the clinic. Because of this misplaced interest, too often, this constellation of policy decisions generates economic instability, persistent racialized and class injustice, and physical and psychological distress—and the ill health outcomes associated with these circumstances. In effect, healthcare policy defeats its named purpose—to provide health to people and the places they live. Healthcare policy often wears on community health, hardening old and new inequities. Given new arrangements of political power and influence, healthcare policy could accomplish dramatic positive outcomes and be better suited to its name—to provide and realize healthcare.
Medicaid Expansion provides increased coverage, access to much needed acute and preventative clinical care, and relief to state and hospital budgets. However, it is limited to the biomedical clinical indicators of health rather than a response to community wellbeing. The ACA does require hospitals to conduct a Community Health Needs Assessment, a consistent standard for the assessment to identify community non-clinical needs is not established. The ACA also allowed for demonstration projects which left the space to design programming that integrated clinical and non-clinical indicators as sites of building wellbeing. The ACA presents a massive investment of federal dollars to low-income communities, often low-income communities of color. The policy, or future healthcare policy, can build on the potential to weave together clinical and non-clinical components of wellbeing and systematize treatment in both spheres.
Editor's note: The ideas expressed in this blog post are not necessarily those of the Haas Institute or UC Berkeley, but belong to the authors.