Economic Development and Health Care

West Michigan’s clinical labs make $505M annual impact

Labs directly contribute $132.28M and support 1,000 jobs in region.

May 24, 2019
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A new economic impact study shows that 222 clinical labs created an overall economic impact of $505 million and supported more than 2,100 jobs in West Michigan last year.

That includes a direct impact in West Michigan of $132.28 million, including $73.52 million in wages for more than 1,000 jobs, with average salaries between $63,000 and $73,000.

While labs account for a small fraction of U.S. health care costs, they are essential to assist clinicians in monitoring, diagnosing and treating disease, according to Washington, D.C.-based American Clinical Laboratory Association, which commissioned the nationwide study.

Individualized health care, called precision medicine, depends on advances in clinical laboratory techniques, the ACLA said.

For the more than 1.6 million seniors in Michigan, access to clinical lab services is crucial for identifying, treating and monitoring chronic disease, said Julie Khani, ACLA president.

“Providers and patients know that in addition to delivering valuable health information, labs also drive significant savings for the health system, helping identify and diagnosing diseases in earlier stages before costly interventions are necessary,” Khani said.

“This new report sheds light on the other important ways in which the industry supports the state, including its contribution of more than $278 million in state and federal taxes.”

Public and ACLA member data from more than 53,600 laboratories across the country was analyzed for the study, carried out by New York City-based John Dunham & Associates.

Local impact was detailed according to each state’s congressional districts. In this case, West Michigan is covered by districts 2, 3 and 6, which stretch from Ludington to St. Joseph County.

In the West Michigan area, the report shows an economic impact to lab suppliers of $129.4 million, including $38.73 million in wages for nearly 700 workers in fields such as travel, manufacturing, finance and transportation.

The “conservative” estimate of induced impacts — the ripple effect of initial spending —in West Michigan is $243.29 million, supporting more than 1,400 jobs in multiple fields.

In Michigan, 1,206 clinical labs have an overall impact of $2.38 billion and support more than 15,000 jobs. This includes $803.7 million in direct spending, including $439.83 million in wages that support 6,112 jobs.

Additionally, $278.85 million in federal, state and local taxes are levied from activity in Michigan.

Nationally, the industry created over $106 billion in output, just under 0.52% of GDP. They supported more than 688,000 jobs and over $44 billion in wages. This does not include the more than $14 billion in state and federal taxes levied nationwide.

Khani said the analysis reinforces the “important human and economic costs at stake if senseless cuts to Medicare reimbursement for lab services continue” under the implementation of the federal Protecting Access to Medicare Act of 2014.

Effective Jan. 1, 2018, the Centers for Medicare and Medicaid Services reimburses clinicians a weighted median of private payor rates for most tests.

“Now more than ever, we must fight to protect seniors’ access to their essential lab benefits,” Khani said.

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