Employers Have Power To Regulate Health Care Costs

May 29, 2002
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Grand Rapids Business Journal readers have once again indicated health care benefit costs to be their No. 1 concern, which also is reflected among their peers nationally. This issue of Grand Rapids Business Journal provides a comprehensive report on what business owners can expect in the near future, including “rapidly escalating” costs.

Business leaders assuredly will be watching the CEOs of health care in the greater metropolitan area, especially as every metropolitan hospital and most every lakeshore hospital plans major construction this year. On the occasion of Grand Valley State University’s groundbreaking for its Center for Health Professions across from Spectrum Health’s Butterworth campus, GVSU Foundation President Richard M. DeVos noted, “We’re not building a new medical center, we’re building a new industry for West Michigan, as one of the major employers and empowering forces in our economy is taking place up here.”

Indeed. Health care is big business in the local economy, all associated prescription drug and high-tech care notwithstanding. Spectrum’s heart hospital will cost $88.4 million, and there are additional consolidation, renovation or expansion plans for critical care and cancer treatment facilities and DeVos Children’s hospital. Metropolitan Health begins state review of its long-needed suburban hospital campus plan, projected to cost more than $150 million. St. Mary’s, faced with use of an aging facility and finding itself the beneficiary of generous donations, will begin work on the Lacks Cancer Treatment Center. Muskegon Mercy General is expanding its emergency department with an $8.9 million upgrade and Grand Haven’s North Ottawa Community Health System is nearing completion of its $11 million ambulatory care facility.

Might this be precipitated by rampant competitiveness — my-donor-beats-your-donor ego pumping — or need? The Alliance For Health, which has been a community-based watchdog on such health care issues for more than three decades, indicates there are as many factors spurring such initiatives as reasons for health care related cost increases.

A recent Alliance seminar on costs noted increases in the metro population, baby boomer aging and the ability to bring new technology to this side of the state rather than cross-state travel. If Spectrum’s advertising is any indication, these costs — and its patients — are spread to upper reaches of Michigan’s mitten.

The regionally recognized Alliance seminar speaker, Robert Hoban, also predicted employers will demand more accountability and value from health care providers, and move from “sickness-based models” to one based on prevention and an emphasis on collaboration. Hoban, senior vice president of Michigan Delivery Network (a consortium of hospitals and care providers), noted the nation will spend an estimated $4.63 trillion on health care in the next eight years. In the year 2000, the nation’s health care tab was $1.31 trillion.

Hoban resolutely believes employers are going to be the catalysts of change in health care delivery. Such is the case in the greater metropolitan area as business chiefs continue to lend the Alliance oversight and studious review.

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