When public systems fracture, change doesn’t stop, it shifts. Progress comes not from fixing individual problems, but from removing the structural barriers that prevent systems from working, especially when oversight outpaces capacity. Michigan’s redesign will succeed if responsibility, authority, and accountability are clearly aligned, and providers are treated as partners in building and sustaining care, not obstacles to manage. Pull Up Your Chair & Let’s Start the Conversation. [2026-01]
The Redesign & The Path Forward
Building a Community Mental Health System People Can Rely On
Across the country, community mental health systems are under sustained pressure from rising demand, workforce shortages, and growing public expectations. Over the holiday break, I read two books that help explain why so many public systems struggle to respond at scale: Why Nothing Works by Mark Dunkelman and Abundance by Ezra Klein. Both arrive at a similar conclusion from different directions. Modern systems are often very good at oversight, caution, and control, but far less effective at building and sustaining the real-world capacity people depend on. The result is not a failure of intent, but a structure that makes it difficult to turn funding and policy into timely, reliable care.
A stronger community mental health framework begins by making responsibility clear and operational, aligning authority with accountability for access, quality, and stewardship of public dollars. It assumes capacity is something to be deliberately built and protected, not managed around. Workforce, facilities, crisis services, housing supports, and community-based care are treated as essential infrastructure, with policy and contracting designed to encourage participation, investment, and long-term sustainability. Rules exist to protect people and public funds, but they are structured to reduce friction, standardize what truly needs to be standard, and allow providers the flexibility to meet local needs. Person-centered care, freedom from conflicts of interest, and protection from unfair competition are not secondary values; they are the DNA the system of care should be wrapped around, ensuring that funding and oversight entities do not compete with the providers responsible for delivering care.
As Michigan continues its community mental health redesign, this framework offers a starting blueprint for a system that is always a work in progress. It reinforces the direction of the state’s redesign by making its goals more achievable in practice, grounding accountability in clarity rather than complexity, and supporting providers as partners in delivery rather than obstacles to manage. It envisions a system where predictability replaces friction, where expanding capacity is rewarded, and where outcomes such as access, continuity after crisis, and stability in the community guide decisions. Most importantly, it provides a shared set of principles that PIHPs, CMHSPs, providers, and policymakers can align around, not as a final answer, but as a common foundation for shaping a system that can grow with demand, adapt as needs change, and reliably deliver care at scale while using public resources responsibly.
For the latest on Region 10 PIHP v Sate of Michigan (COC 25-000143-MB), link to the Court of Claims website.
What the Path Forward Means for Providers
As Michigan moves along the path forward toward building a community mental health system people can rely on, providers are beginning to prepare for what it will mean to work with the PIHPs that will be selected. The most important shift is understanding that successful partnerships are built through structure, not personalities, power, or control. Real collaboration should show up in the architecture: honest collaboration and consultation with providers, written commitments to transparent and uniform contracting standards, clear separation between utilization management and provider engagement, and dispute resolution processes that do not rely on informal CMHSP-style gatekeeping or retaliatory actions. These elements signal whether a PIHP is prepared to operate as a steward of public funds rather than as a gatekeeper or competitor.
Direct relationships between PIHPs and providers, statewide standards in place of local variance, and formalized decision-making reduce the influence of informal power without confrontation. When roles are clear and expectations are documented, providers can engage the system directly and predictably, and accountability becomes easier to manage for everyone involved.
Clarity around partnership is essential, especially during a transition. Partnership does not mean guaranteed contracts or the absence of oversight. It does mean predictable rules, timely payment, meaningful voice, and being heard before decisions are finalized rather than after. A PIHP that is structurally fair does not need intermediaries to manage relationships. Trust, when built into the system, reduces friction, cost, and risk, and allows providers to focus on what matters most: delivering care.
ICYMI
Crisis Services
Michigan Business Beat | Sara Lurie, CMHA-CEI, Remarkable Progress -New Crisis Care Center, Michigan Business Network
Rural Care
Michigan awarded more than $173 million in federal funding to strengthen rural health
The Michigan Department of Health and Human Services has been awarded $173,128,201 for fiscal year 2026 by the Centers for Medicare & Medicaid Services under the Rural Health Transformation Program to support access to health care in rural communities across Michigan. The funding is part of a $50 billion national initiative, through CMS, with $10 billion available annually from 2026 through 2030, aimed at improving rural health care delivery, supporting providers, and advancing new approaches to care coordination. According to the state, the award will help address funding shortfalls linked to federal Medicaid cuts while strengthening the long-term sustainability of rural providers. Before submitting its application, MDHHS gathered input through an online survey and two listening sessions, which informed a proposal focused on strengthening regional partnerships among rural hospitals, clinics, and community organizations; recruiting and retaining rural health, behavioral health, and community health workers; expanding prevention, chronic disease management, and integrated behavioral health care; advancing rural interoperability through technology tools such as telehealth, remote patient monitoring, and data exchange; and establishing digital referral networks to connect residents with local care, prevention, and wellness resources. For more details, visit the MDHHS news release announcing the award.
Related:
Peters Introduces Bipartisan Bill to Strengthen and Expand Mental Health Services in Michigan’s Rural Communities
U.S. Senator Gary Peters (MI) introduced bipartisan legislation to strengthen and expand mental health services in Michigan’s rural communities. The Expand the Behavioral Health Workforce Now Act – which Peters introduced with U.S. Senator Steve Daines (R-MT) – aims to help states grow their behavioral health workforce, particularly in rural areas, to ensure mental health resources are accessible across the state. Specifically, the bill would require the Centers for Medicare and Medicaid Services (CMS) to issue guidance for states on ways to increase education, training, recruitment, and retention of mental health and substance-use disorder providers under Medicaid and the Children’s Health Insurance Program. “I’m proud to join my colleague in leading this bipartisan bill to help ensure all Michiganders can access quality mental health care from trained professionals. With the demand for mental health support higher than ever before, this commonsense legislation would help states strengthen this critical workforce to expand the mental health services available in rural and underserved communities,” said Senator Peters. The Expand the Behavioral Health Workforce Now Act is supported by the National Alliance on Mental Illness (NAMI).
Peters has been a consistent advocate for mental health care, supporting policies that expand access to quality, affordable treatment. Earlier this year, Peters introduced a bipartisan bill that would increase access to care in areas experiencing shortages of mental health care professionals. In 2024, Peters also cosponsored bipartisan legislation to expand access to telemental health care. Source: US Senator Gary Peters, News Release.
Workforce
Michigan’s minimum wage increases by $1.25/hour starting 1/1/2026, Bridge Magazine
Funding
Valvoline Inc. Donates $100,000 to Children’s Miracle Network Hospitals to Support Pediatric Mental Health Initiatives, University of Michigan Health-Sparrow
Legislative Updates
Rep. VanderWall named ‘legislative champion’ by Mental Health America, Rep. Curtis VanderWall (R-Ludington)
Addiction
Industry News
2025 Behavioral Health Trends Recap – Progress, Setbacks, and the Road to 2026, Behavioral Health Business News
The Top Behavioral Health Stories of 2025, Behavioral Health Business News
If you are a nonprofit behavioral health provider in Michigan, and not a member of the MI Care Council, MI Behavioral Health & Wellness Collaborative, or the Michigan Association of Substance Addiction Providers, or just interested in collaboration, please contact [email protected], for more information on the value of membership. If you know of someone who might find this content, please share this link to the newsletter.
Disclaimer: This newsletter is intended for informational purposes only. Sources have been cited where applicable, and while some content may have been drafted with the assistance of AI, all material has been reviewed and edited by humans. We strive for accuracy, but if you believe something is incorrect or misrepresented, please reach out via direct message so we can review and correct the record if necessary.
