Editorial

With medical center developments, caution over congratulations is advised

September 30, 2016
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Grand Rapids Business Journal is reporting on several multimillion-dollar medical center developments, as Spectrum Health expansions continue in Ottawa County, and Mercy Health begins construction on its $271 million complex in Muskegon. Caution rather than congratulations is advised, as it adds to increasing cost of care for West Michigan residents.

The buildout to remain competitive with other health care providers nets a similar result as the “arms race:” stockpiles, plentiful numbers of (empty) beds and “shared cost” to anyone needing use of medical care. Metro Health announced plans to join the University of Michigan Health System in June, and Spectrum in March fought to create a vast new surgical center in Grand Haven, effectively monopolizing services usurped from the long-existing North Ottawa Community Health System run by the community. The community ownership of community hospitals is a concept Spectrum has eschewed.

It is important to note creating choices remains important, though unrestricted and unsupervised expenditures create, across the board, increases for those who need health care in this region.

Grand Valley State University Health Education Provost Jean Nagelkerk and Seidman College of Business Associate Dean for Undergraduate Programs Paul Isely annually team up to provide a detailed report and the causes and effects of health care costs, competition, drug costs and the general health of regional residents. The 2015 report “West Michigan Health Care Economic forecast” showed hospital expenses rose 108 percent over the past 10 years, 78 percent faster than cities of similar size and in Detroit.

Isely also noted consolidation of medical services is occurring around the country, not just in this region, but West Michigan reflects “almost double the level on non-competition as the east side of the state.”

In 2014, the Business Journal reported the American Medical Association ranked Michigan the third-least competitive state in the commercial health insurance market. AMA president Dr. Robert Wah told the Business Journal, “The dominant market power of big health insurers increases the risk of anticompetitive behavior that harms patients and physicians and presents a significant barrier to the market success of small insurance rivals.”

The Michigan Department of Health and Human Services would be well advised to create a checks and balances reform based on the results of these financial studies.

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