Health Care, Higher Education, and Human Resources

West Michigan employers 'undecided' on offering health plans

January 10, 2014
| By Pete Daly |
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West Michigan employers 'undecided' on offering health plans
GVSU economics professor Paul Isely discusses regional health care trends at the Eberhard Center. Courtesy GVSU

Hospitals in four West Michigan counties are experiencing increasing outpatient traffic from beyond the region — and many companies here aren’t even sure if they will offer their employees a health insurance plan next year.

Those are just two of the many details revealed this morning at the 2014 West Michigan Health Care Economic Forecast at Grand Valley State University’s downtown campus.

Area health professionals and GVSU economics faculty members shared the latest trends and their predictions regarding regional health care at the fifth annual summit hosted by the university.

Economics professors Sonia Dalmia and Paul Isely shared results of their health care trends survey in Kent, Ottawa, Muskegon and Allegan counties, followed by a discussion by a four-person panel: Jeff Connolly, president of West Michigan operations of Blue Cross Blue Shield of Michigan; Jim Haveman, director of the Michigan Department of Community Health; John Kennedy, president of Autocam and Bill Manns, new CEO of Mercy Health Saint Mary’s Hospital.

Employers

GVSU surveyed companies throughout the region that employ more than 50 people and got a response rate of more than 20 percent.

The survey focused on the companies’ response to the ACA and their provision of health care benefits to their employees.

“They certainly are shifting costs to their employees,” said Isely, adding that about half of the firms that responded to the survey said they were shifting health care costs to their employees “because of the Affordable Care Act, not because of other changes.”

“From an economic point of view, the scary part . . . is that about a third of the firms are undecided as to whether they will have employer-sponsored insurance plans a year from now. That’s an amazing number,” Isely said.

He noted, however, that there is a lot of uncertainty in general at many companies, which are holding off on hiring more employees and making new investments, while they wait to see what direction the economy is headed.

“That’s certainly slowing down growth,” he added.

Demand

Isely said outpatient use of the regional hospitals by people from outside the region has doubled over the last 10 years — “and we know people aren’t twice as sick as they used to be.”

That increasing reputation of the region’s health care systems is bringing in money to the region from outside, “a much more powerful dollar from the economic point of view,” Isely said.

The number of patients continues to climb, a combined result of the aging Baby Boomer population and the 700,000 people in Michigan getting insurance coverage for the first time through the Affordable Care Act.

Workforce

Another major economic consideration is local generation of health care workers to meet the increasing demand for health care.

Isely said statistics show the western half of the Lower Peninsula is producing a surplus of low-skilled health care workers — but the opposite is true in regard to higher-skilled professionals, particularly registered nurses.

“We’re producing about a hundred fewer (RNs) every year than we think we need,” Isely said. Ironically, he added, “we’re not seeing their wages go up as fast as one could expect.”

The GVSU economists suspect that it could be “deferred retirements” among RNs that is behind the stats.

In Michigan, in particular, where thousands of auto workers lost their jobs in the past 10 years, an RN married to a former auto worker would become the primary breadwinner and be more likely to put off retirement longer than expected.

Higher up the skills ladder, in terms of training and compensation, are physician assistants.

Isely said competition among hospitals for PAs is driving their incomes up, showing more demand for them in this region than predicted by federal health care experts, “which is interesting.”

Patents

The report also looks at health care-related patents, because an increase in patents indicates more research activity and greater economic potential in that region.

Comparing January 2011 through October 2013 to the 2000-2010 time frame, the average number of patents issued to inventors in Kent County increased by 49 percent.

The largest number of patents issued in the region overall went to Access Business Group International, a division of Amway, for non-prescription, health-related compounds, especially vitamins.

Costs

The GVSU report also reflects the dollar cost of certain chronic diseases in the region, based on data supplied by Priority Health, BCBSM and Blue Care Network.

The cost of having diabetes typically ranges from $10,000 to $11,000 a year, but the economists have calculated that the individual cost can be cut by about 10 percent “just by taking the recommended tests every year,” according to Isely.

The total cost of diseases such as diabetes and asthma is estimated at $200 million or more each in the region.

With the Grand Rapids area GDP estimated at about $38 billion, the total cost of all diseases “starts to become a very big number” in the local economy, Isely said.

The full 65-page report can be found on the GVSU website.

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