With a herd of smart, ambitious and experienced candidates running for governor in Wisconsin in 2026, wouldn’t you think that they would surface some striking and innovative proposals for the governance of the state?
So far, seven Democrats and two Republicans have offered their services once in the governor’s mansion. There could be a couple more by the filing deadline June 1.
All nine of the candidates will have predictable sound bites about the people coming first, the taxes being kept low (Wisconsin now ranks in the middle of the pack for state and local taxes combined), for clean elections, for safer streets and improved school outcomes.
But the major issues facing the state should separate the candidates prior to their primary elections on August 11. Let’s take the overriding issues one at a time in the coming weeks and months on where each of them stand on the biggest challenges in Wisconsin.
Arguably, the biggest economic challenge is health costs. They are killing the budgets of the average family and the bottom line of many companies. Consider the staggering number that Milliman Consulting has projected for a family of four: $35,119 for a family covered by an employer insurance plan in 2025. Add another expected increase of $2000 in 2026.
Typically, employees pick up 20-25% of that cost.
On average, health costs have increased by about 6% annually since 2005 – double the rate of inflation for all costs. What have Wisconsin governors, attorneys general and insurance commissioners done about hyperinflation in health care? Not much.
Some of the primary causes of soaring health costs have been the merger mania among health care systems. Almost every health care company in Wisconsin has been merged into a bigger system. Why is that? It’s quite simple.
They merge to gain market power on the sell side. Once they have achieved a monopoly or duopoly in a region of the state, they can raise prices virtually at will. There is little market competition to discipline prices, and there is no regulation to keep the prices in line.
Wisconsin has the fourth highest hospital costs in the nation.
Wisconsin AG Josh Kaul
Governor Tony Evers and Democratic Attorney General Josh Kaul have taken a duck on controlling the merger mania. Kaul’s Republican opponent, Eric Toney, Fond du Lac district attorney, has a wide open opportunity to call for trust-busting of the health care giants in Wisconsin. It should be a winning issue for him among voters who have been slammed by health cost premiums and deductibles.
Will he join that battle? The fat cats in the health care industry have just raised a campaign spending pool of more than $300,000 in 2024, and they will use their influence and money to convince politicians to protect the status quo that enables hyper-inflation in health prices.
(I know a little about monopoly pricing power. I used to run local newspapers that essentially were local monopolies in communities they served. We didn’t worry too much about cost controls; we just raised our rates every year to more than cover our cost increases.)
Here is an example of how convoluted the health care market has become: the major health care provider corporations own some of their own health insurance companies. The providers are the seller of health care, and they own the buyers of health care, the insurers who supposedly represent companies and individuals buying medical care. How crazy is that? The sellers own the buyers!
The two Roosevelts, Franklin, a Democratic president and Teddy, a Republican president, knew how to deal with robber barons. They broke up the monopolies and they regulated them.
Wisconsin was a precursor of regulation of monopolies, or near monopolies, in the utility sector. The Wisconsin Public Service Commission was organized in 1907 to oversee price increases in energy, water and telecommunications.
Why not the creation of a similar public co
mmission that would approve or disapprove of consolidations in health care and their annual price increases? I know of no economist who opposes that idea.
The health care industry in Wisconsin had an opportunity to follow the lead of John Toussant, former CEO of ThedaCare in the Fox Valley, in the introduction of lean disciplines into his system. (ThedaCare has since merged with Froedtert Health of Milwaukee.)
John Toussant, former CEO of ThedaCare
Toussant’s brilliant concepts improved quality in his system and made a major dent in price inflation. A few small systems, such as Bellin Health in Green Bay and Gunderson in La Crosse followed his lead, but the biggest systems in the state chose instead to emphasize price increases over quality improvement and efficiency.
In addition to controlling price increases, a new public service commission for health care could insist upon the spread of lean disciplines in Wisconsin hospitals and clinics.
Health care management is complex. But smart politicians should, on behalf of citizens, be able to cut through the complexity toward solutions that work.
Wouldn’t it be refreshing to hear such problem-solving concepts coming out of the mouths of our would-be governors?
