Health Care and Higher Education

Lakeshore leaders call for regulating health care costs

The 2018 Health Check noted Grand Rapids patients pay approximately $3,000 more per hospital admission compared to Detroit.

March 9, 2018
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(As seen on WZZM TV 13) Business leaders from along the Lakeshore came together earlier this month for the 2018 Health Check, a report conducted by economists from Tulane University and the GVSU Seidman College of Business, which analyzed health trends and costs in Kent, Ottawa, Muskegon and Allegan counties.

Lody Zwarensteyn, who moderated the employer panel during the event, summed up the general concerns from those in the room: health care costs are too high, and they are increasing for the wrong reasons.

Zwarensteyn is the former president of Alliance for Health, a nonprofit that was “dedicated to improving the quality and value of health care in West Michigan,” which ceased operations in 2015 due to lack of funding.

The report’s data showed hospital charges per admission “are significantly higher than the national average and approximately $3,000 greater per admission” in Grand Rapids compared to Detroit, where wages and patient numbers are much higher.

The report notes this is the fourth consecutive year of higher spending, particularly for coronary artery disease and diabetes, in West Michigan compared to the Detroit region.

And average expenditures of patients with hyperlipidemia, coronary artery disease and asthma increased at a higher rate than in Detroit. 

The report also noted average annual expenditure of patients with coronary artery disease was $25,469 to $30,445 in much of Ottawa County, compared to Muskegon and Kent counties, which reached $42,153 in some areas. 

Paul Isely, the associate dean for undergraduate programs at the Seidman College of Business, said the reason for higher overall costs in the region is due to one of three issues: higher price, differences in treatment or sicker people. 

Looking at the data, he said behavior suggests people in West Michigan are “not substantially sicker” than those in Detroit or the rest of the country. Zwarensteyn called the area “boringly normal” regarding healthiness.

“So, that brings us down to the types of care we have and the price,” Isely said. “Both of those are places where I think we need to explore more deeply to understand which is the driver.” 

Isely also noted the number of health care professionals has decreased, and their wages are growing less quickly — or have decreased — compared to health professionals in the rest of the country, except for physician assistants.

Zwarensteyn put it plainly: “Sometimes the costs are higher because we charge more.”

That rise in costs accompanies increased expenditures in capital and equipment, Isely said.

Zwarensteyn said there is too much construction and expansion from health care providers to show who is “bigger and better,” not based on a need for increased facilities. When there are more facilities than needed, that in turn drives up costs.

“What we’re finding is non-health care economic decisions are driving a lot of what’s going on, and that’s stupid,” Zwarensteyn said. “It’s a poor use of resources, and our politicians have to realize that.”

He pointed to the recently constructed Health Pointe building in Grand Haven, a partnership between Holland Hospital and Spectrum Health. Officials from Grand Haven’s North Ottawa Community Health System hospital have expressed concerns regarding its ability to survive after Health Pointe’s opening. 

Zwarensteyn said he believes the intent of building the 120,000-square-foot integrated care campus is questionable.

“It’s meant to drive the hospital out of business,” he said. “That’s avaricious, predatory behavior. It’s not really the kind of thing that most of us would want, and yet here it is.”

Zwarensteyn said there needs to be better adherence to the certificate of need — a law aimed at requiring health care providers to demonstrate the need for services before expanding capacity — and “pressure to expand it.”

And he said there needs to be a greater diversity in voices influencing legislation on the subject.

There is not a strong employer lobby, such as the Alliance for Health, as there once was, so the only voices contributing to legislative decision making, he said, are “those of the vested interest,” such as the hospitals and medical society.

“So, they’re getting a very narrow, biased bit of input, and that’s a real problem,” he said.

“We have to bring it back to a public consciousness, and that means bringing back an organization that can speak for a community — a broad community, not special interests.”

There was agreement from Dennis Furton, superintendent of Spring Lake Public Schools, and Wendy Brown, benefits analyst and administrator for ADAC Automotive, a tier 1 automotive supplier with 1,100 Michigan employees, about 900 on the lakeshore.

“Whatever we need to do to make costs decrease is going to be the way we have to go,” Brown said.

Employees do not want to travel for health care, she said, especially the low-income employees. “They want to stay home.”

Brown and Furton said it should be the employers’ responsibility to ensure employees are getting the best coverage and care options, but health care providers also have a responsibility to do what’s right.

Jennifer VanSkiver, chief communications officer for North Ottawa Community Health System, agreed. 

“The question that I think remains to be answered is … How much more time do we need to look at that data and see it’s trending in the wrong direction? And who is accountable for that?” VanSkiver said.

She said employers’ voices “absolutely hold the key” to making changes and creating a “regulating force.”

It’s important to remember that ultimately, health care providers are there to serve patients and employers, she said.

“As a hospital administrator, we need to welcome that discussion.”

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