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Infographic by Rachel Harper Infographic by Rachel Harper

Michigan’s $35 billion health care industry continues to grow

BY Sunday, May 14, 2017 01:24pm

Employment in Michigan’s health care sector grew steadily during the first half of the decade, reaching nearly 588,000 jobs as of 2015 and generating an economic impact of about $35 billion.

An annual report from a trio of Lansing-based health care organizations illustrates the size of the industry across in Michigan, where hospitals alone employ some 228,000 people and often rank among the largest employers in their respective communities.

Health care employment overall as of 2015 was up by about 30,000 jobs from 2011, when the industry had an economic impact of $31.4 billion, according to this year’s report from the Partnership for Michigan’s Health.

The annual economic impact report is a collaboration of the Michigan Health & Hospital Association, Michigan State Medical Society and the Michigan Osteopathic Association.

The relative consistency of employment across the period indicates a return to stability for the industry following the turmoil of the recession, said Peter Schonfeld, chief operating officer for the Michigan Health & Hospital Association.

“You really didn’t see big variations over those four years,” Schonfeld said. “Employment (in the industry) has been holding steady and there’s been modest growth.”

Health care in Michigan supported another 340,522 jobs indirectly in 2015 that paid $15 billion in wages, salaries and benefits. The industry’s overall economic impact was $50 billion with 928,949 total jobs, which generated $14.8 billion in federal, state and local tax revenues.

Data from the three organizations show that health care employment overall grew at a pace of 5.3 percent from 2011 to 2015, slightly faster than hospital employment, which grew 4.1 percent over the same period.

That difference could result from an array of factors that include how employers design benefits — people now pay more out of pocket to access care, for instance — plus a continued transfer to outpatient settings of medical care and procedures that hospitals traditionally provided.

“(Hospitals) are making efforts to reduce readmissions (and there’s) more efficient and effective health care delivery to provide care in lower-cost settings,” Schonfeld said. “If you look, outpatient care is growing and inpatient has more plateaued.”

Schonfeld notes that when Michigan expanded Medicaid eligibility in April 2014 under the federal Affordable Care Act, patient visits to hospital emergency rooms did not see a corresponding increase, while office visits to primary care physicians did.

The 2017 economic impact report cites 2015 data from the American Hospital Association that indicates an inpatient hospital admission in Michigan costs an average of 11.7 percent less than the national average, and was 10.9 percent below the average of Great Lakes states including Illinois, Indiana, Ohio, Wisconsin and Pennsylvania.

“Health care is a more efficient component in Michigan than it is in other states and it should be part of the economic development strategy,” Schonfeld said. 

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