For Bob Riney, president and CEO of Detroit-based Henry Ford Health, the high cost of healthcare is not a pricing problem — it reflects deeper structural flaws in the current financing system.
“I think we all have to start by recognizing that healthcare financing has been uneven and convoluted for decades,” Mr. Riney said. “We do not have a financial model that serves us well.”
His comments come as healthcare costs rank as Americans’ top economic concern, according to a recent KFF Health Tracking Poll, and as national health spending climbed 7.2% in 2024 to $5.3 trillion, or 18% of GDP, according to CMS.
Mr. Riney said state-by-state variation in Medicare and Medicaid rates, differences between growth and aging markets, and rural versus urban dynamics account for significant performance variation in the U.S. Policymakers have responded with well-intended “fixes or patches,” including premium reimbursement for hospital outpatient departments, the 340B drug pricing program and critical access payments.
“The challenge is they have been short-term stabilizers but have not helped create a permanent reset for healthcare economics,” he said.
Henry Ford Health — which has 50,000 team members and more than 550 care sites across Michigan — provides nearly $800 million annually in uncompensated care and coverage. Mr. Riney said that financial reality reflects broader gaps in coverage and access nationwide.
In a recent conversation with Becker’s, Mr. Riney discussed where he believes change must begin, how uncompensated care shapes investment decisions and what measurable progress should look like over the next five years.
Editor’s note: Responses have been lightly edited for clarity and length.
Question: You’ve argued that we consistently underfund primary care, behavioral health and prevention while pouring billions into crisis care. From where you sit as a health system CEO, what would have to change first to truly rebalance that equation?
Bob Riney: First, we have to recognize that there are many stakeholders in the healthcare financial ecosystem. Some are nonprofit. Some are for-profit and beholden to stockholders. There are different philosophies in the financial model. It is not about one being right and the other being wrong. It is about the inherent conflict that can exist between a health system in the country that has very different, competing and conflicting financial interests.
In my mind, I would encourage the government, both at the state and federal levels, to get all stakeholders to the table and hold them financially harmless so they are motivated not to protect their own interests but to participate in fundamental redesign. Hold them harmless for a period of time and create an approach to look at three to five different models of care that might work and test them. From that, we could find a pathway to adoption.
I really believe value-based care is one such model that may not be the panacea for the entire country but can certainly drive value in a different way in organizations that have the business and cultural model to flourish in that construct, as well as employers and states willing to support it. To really drive value and show return on investment, value-based care has to have a long-term commitment. If you are expecting a major drop in the trendline on healthcare costs in two years, that is not likely. But you will see it if you commit to sticking to that approach over time.
At Henry Ford, we have 500,000 people in various forms of value-based contracts, some of which we have been doing for nearly 20 years. It was called managed care and has been called different things. We can now prove that, for those populations, we have been able to improve value and decrease the cost or inflation of healthcare. It has been through heavy lifting and heavy learning, and we still are not at our optimal point. The concept has been proven, but we need to organize it more and have all stakeholders as part of that journey.
Q: Henry Ford Health provides nearly $800 million annually in uncompensated care — clear evidence of gaps in coverage and access. How does that financial reality shape the way you think about investing in prevention and community-based services?
BR: With $800 million in uncompensated care, it requires that we have a very diverse enterprise in terms of a great balance of ambulatory care, hospital care and home care. It means that we leverage digital and artificial intelligence solutions as much as we can to create efficiencies. It means we have to rely on our donor community and philanthropic community in very significant ways. We have chosen not to cut community programs, even though financially it is very challenging to keep them afloat. Rather, we have doubled down on connecting with donors and foundations that see the real value we are putting in place.
The reason we have not cut those programs is that to really improve people’s health, you have to take a holistic view. If support in their home life is the reason their health is so poor, we can have them in and out of our clinics all day long, but we are not going to get to the root of the problem.
I will give you an example of something the city of Detroit has implemented — Rx Kids, a maternal and infant cash assistance program. Mothers are often making a choice between going to their OB visit or keeping their job. This program pays mothers a flat amount every month during pregnancy and in the first year of the child’s life to help ease burdens such as transportation and ensure they follow up on pediatric visits and immunizations.
Even though that is not a Henry Ford program, it is a great example of a holistic approach. If we can keep moms going full term because of prenatal care versus delivering babies early who spend two months in neonatal intensive care units at extraordinary cost, that is value-based care.
Q: You’ve pointed to life expectancy gaps and the disproportionate impact of chronic disease, substance use and mental health on overall costs. For health system leaders nationally, what does measurable progress actually look like over the next five years — and how should CEOs hold themselves accountable?
BR: We can impact mortality rates in a number of ways. One is really continuing our journey on chronic disease management and things like diabetes — things that we know with tight management have very different outcomes than they do with loose management. There are a series of chronic diseases that affect so many people. We have gotten better as an industry, and a lot of healthcare systems have stepped up and done tremendous work. But we still know we have opportunities and gaps in diabetes management and diabetes education. I use that as one example.
We also know that integrating mental health into primary health and improving access to mental health is going to be key to reducing suicide rates in this country, which are much higher than in many other developed countries. Unfortunately, it disproportionately affects young people. When very young people are dying by suicide — and by gun violence — that has a significant impact on mortality rates. Strengthening mental health and the integration between mental health and primary care will have an impact.
The third issue is making sure our elderly population is getting care in a very organized way so they are not cycling into emergency rooms and being admitted every 30 days. That means shifting more care into people’s homes. It means developing technology so we can connect with patients regularly — reminding them about medications, checking in on them — and connecting with family members from an education standpoint. A lot of what cycles elderly individuals back into the hospital is a breakdown in continuity of care.
We do not need to boil the ocean. If we really look at what is driving the biggest impact areas, those are the areas I would go after.
At the same time, we need to continue to double down on innovation and advancement of cures and discoveries. Sometimes, people think value-based care means we would shift away from sub-specialists or new cancer discoveries or gene therapies. I say absolutely not. This is not an either-or proposition. It is both. We need to continue to lead the world in discoveries that alleviate suffering and disease, while also organizing care in a way that helps people live healthy lives as long as possible. We have to do both.
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