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Detroit Medical Center CEO calls insurers’ No-Fault bluff

May 15, 2018 by Steven M. Gursten

Auto insurers balk at Detroit Medical Center CEO Conrad Mallett’s offer for a dollar-for-dollar price cut with hospital charges and No-Fault insurance premiums

Detroit Medical Center CEO's offer for dollar-for-dollar cuts calls No-Fault insurers' bluff about wanting to lower auto insurance premiums.

Did Detroit Medical Center CEO Conrad Mallett just call-out the auto insurance industry’s bluff about its so-called “commitment” to lowering No-Fault car insurance premiums for Michigan drivers?

Yes, he did.

In his Crain’s Detroit Business story, “DMC exec challenges auto insurers to cuts,” Chad Livengood reported that Detroit Medical Center CEO Conrad Mallett (a former Michigan Supreme Court justice) “is ready to”:

“[D]o a deal with auto insurance companies on reining in how much hospitals charge for auto accident victims … [b]ut only if the carriers agree to dollar-for-dollar cuts in the no-fault insurance premiums shouldered by drivers …”

Specifically, as Livengood reports in his April 29, 2018, story, Mallett has made the following remarkable, put-your-money-where-your-mouth-is offer:

“I will give if you will give, Mr. Insurance Company … You do a 1 percent cut, I’ll do a 1 percent cut. You do a 20 percent cut, so will we. You do a 25 percent cut, so will we. I will write my guarantee down.”

Not surprisingly, there’s been no word whether the insurance industry – or any particular insurer – has responded to Mallett’s offer, let alone accepted it.


Offer from Detroit Medical Center’s Mallet exposes auto industry hypocrisy on No Fault Reform

Of course, the insurance industry won’t acknowledge Mallet’s offer to match cuts. Actions speak louder than words. Words come really easy for the insurance industry when it comes to so-called “promises” to lower rates in exchange for getting more of what it wants, but when it comes time to put these promises in writing with guarantees, the insurers quickly balk.

But even so, this is a big development. We’re seeing the two political titans openly clash on the issue of auto No Fault insurance.

The auto insurance companies accuse the hospitals and doctors of charging too much for medical care and services when No-Fault is paying.

And the medical providers have accused the insurers of never paying bills on time, of making them engage in costly and protracted litigation that requires them to hire lawyers just to get paid on simple matters. Also, the medical providers note the insurance companies refuse to guarantee any cost savings for consumers if the medical providers, hospitals, and doctors were to acquiesce and agree to ratchet down their medical charges or to agree to fee schedules.

The back and forth has resulted in a long-standing stalemate.

Until now, perhaps?

After all its bluster about wanting to lower premiums if only hospitals and medical providers would agree to get their costs for auto accident-related services under control, Mallett – officially speaking on behalf of DMC, while unofficially testing the waters for the entire state’s medical community – has called the auto insurers’ bluff.

Detroit Medical Center CEO’s offer for dollar-for-dollar cuts helps us see auto insurer’s true colors

The timing of DMC CEO Mallett’s offer – and the silence from the auto insurance industry that greeted it – is very interesting.

First, after several brutal rounds in the legislature in recent years involving bills to dismantle No-Fault in ways that line insurers’ pockets while eroding vital benefits and protections for car accident victims, it confirms that the insurance industry’s heart is not with consumers, but with itself and its ability to generate profits.

Second, it suggests that the auto insurance may not have been so particularly interested in – and offended by – the charges that hospitals and doctors bill to No-Fault for treating car accident victims.

Rumors are swirling that an insurance-industry backed No-Fault bill, Senate Bill 787, may soon be getting some legislative attention in the Senate.

Of course, it’s a horrible bill: It aims to boost No-Fault insurer profits by enticing older drivers to use their retirement accounts, savings and Medicare to cover medical expenses if they’re injured in an accident.

Conspicuously missing from this parade of horribles is any proposal to control, limit or otherwise restrict what hospital and doctors can charge to No-Fault for caring for and treating car crash victims.

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