Mark Sanchez: This is a coalition of advocates and health care providers and social service groups around the state called Protect MI Care. And it, on Tuesday morning, had a virtual news conference where it talked about this ‘Big, Beautiful Bill’ that Congress passed and President Trump signed last week. What's that going to mean? Well, part of it targets Medicaid, and we're looking at $1 trillion in spending cuts from Medicaid over the next decade beginning in late 2027. What does that mean? For Michigan, that's about $6 billion in revenue that hospitals in the state are going to lose based on their payer mix of private insurance, Medicare, Medicaid. Brian Peters, who's CEO of the Michigan Health and Hospital Association, he talked about this could cause some of those rural hospitals to close or force them into looking for a partner for hospitals that are already financially struggling, or this could cause them to feel more financial pain, cause them to look at a merger or consolidating. We could have more consolidation within the hospital industry that we have seen quite a bit over the last 10 years. Interesting what the party also brought up is, you're a new doctor coming out of college, coming out of medical school, serving your residency, or a nurse, or some kind of other health care professional. You're deciding where to go for your career. Do you choose those rural hospitals knowing what's coming down the road over the next several years, that they're facing these Medicaid cuts, and rural hospitals tend to have a higher Medicaid population and higher poverty and higher Medicare populations. If you know these cuts are coming, that's going to affect that hospital's operations in the years ahead, do you choose to go there for your career stop or to start your career? So, there's just a lot of ramifications to this bill that hospitals are going to have to work through and try to figure out. Most of which is just, where do you make up that $6 billion in that revenue that Medicaid represents over the next decade?
Patrick Center: Urban populations and urban hospitals also are impacted by this because there is this domino effect through the system.
Mark Sanchez: Yeah. And that's, that's part of what folks at the coalition we're talking about yesterday, especially Brian Peters at the MHA. There is a domino effect. From workforce, where does the workforce go from just patient care? And he also talked about if some rural hospitals, especially he really focused on those, but if some hospitals, because their Medicaid funding gets reduced, they have to eliminate or reduce medical services or close. That affects everybody. That affects everybody's ability to access care from how long you're going to be waiting in an ER and things like that. You take that much money out of the system, there are clear consequences for it and the hospitals are now trying to figure it out and prepare for what's ahead.
Patrick Center: The state was also represented in this virtual news conference, Health and Human Services, and trying to figure out how you make up for those federal dollars.
Mark Sanchez: That is the big question. It's also a political question. Does the state decide to put more of its own money into the Medicaid fund? And you know, this is a 50-50 partnership between the feds and the states. Does the state make that up? Well, what's that going to do to the state budget? What's that going to do to your taxes if the state goes forward with that? And how does the state fund it? Those are big questions that lie ahead for the folks in Lansing. And it's all a political situation where, you know, are the Republicans in the state legislature, are they willing to put more state money into Medicaid? Probably not was the general consensus of the group that was talking yesterday.
Patrick Center: We're talking with Crain's Grand Rapids Business staff writer, Mark Sanchez. Michigan has never had more wineries, but there's an issue as demand shrinks. How do you support all the wineries?
Mark Sanchez: We've seen this industry really come up. Anybody who's ever gone to the Southwest part of the state down Berrien County, the wineries there, or you go up to the Old Mission Peninsula or the Leelanau Peninsula for your wine tour. You've got these wonderful wineries that make some pretty good wine. They've been growing for many years, and you've seen this growth in the industry to the point where you have so many wineries now. And just like the craft beer industry over the last number of years, it's hitting that market saturation point. And that's occurring at a time where folks are not drinking as much wine. In fact, the International Organization of Vine and Wine reported that wine consumption declined by 3.3% in 2024 alone. That's the lowest global consumption in 60 years, more than 60 years since 1961. So, you have a lot of wineries over the last 20, 30 or more years that have come up in the state and been formed. Some, such as St. Julian (Winery & Distillery) down in Paw Paw in the southwest part of the state, has been around more than a century operating as a winery down there. And so, they're now looking at this situation, that lower consumption, more players in the market and just as an example in the story my colleague Abigail Poirier did last week, St. Julian saw its wholesale wine sales decline by 10% year over year. You know, that takes an effect on the business. Folks who enjoy wine and you love going to these wineries around the state, there's an issue coming. The market's hitting saturation point and it's going to have to work itself out.
Patrick Center: These wineries are really large. We’re talking about acres and acres of land to grow these grapes.
Mark Sanchez: Yeah, some are large and some are small. And just to give you a little bit of an example, Michigan had 1,400 acres of wine grapes planted in 2003. That acreage grew by 141% to more than 3,300, almost 3,400 acres as of 2024. That's according to the Michigan Wine Collaborative. And the number of wineries open in Michigan has also grown since the pandemic from 175 in 2023 to 258 as of this year. That's an increase of 50 % and that's data that comes to us from the Michigan Craft Beverage Council. So again, in the last number of years, you've seen this industry grow, many more people creating their own wineries and making their own wine to sell. And again, a lot of folks enjoy these wineries for their weekend tours and their wine tours. but the market is hitting a point where perhaps it cannot support all of them.
Patrick Center: Speaking of supporting businesses, you and I have talked about this over the years. We have a new Grand Rapids-based loan fund that is supporting minority owned businesses.
Mark Sanchez: Yeah, this is called the Capital Access Fund of West Michigan. It's starting out at $3.25 million. It's supported by an allocation, appropriation, the Kent County board of commissioners made back in late 2022 from the Kent County share of the American Rescue Plan Act funding. So, this is basically a capital fund. It's going to focus on backing minority-owned businesses in the Grand Rapids area for loans of $10,000 to up to $250,000 for minority, small business owners. And it's just an area to help folks who have had historically difficulty accessing capital and credit to give them another line. And the Urban League of West Michigan is working on this. It partnered with some other groups, including the Boston Square Neighborhood Association, the Grand Rapids Media Initiative and Film Incubator, and Legacy and Love LLC. All are nonprofit organizations. And they really want to grow this fund. Right now, it's just launched here a little more than a week ago. It's taking applications from small business owners, and it really wants to grow the fund up to maybe $25 million. It's a revolving loan fund, so as folks pay back their loans, that money goes right back into the fund to loan to other people. And right now, they're going to start reaching out to some of the banks in the marketplace, banks and credit unions, and see if they will invest in this fund. This capital access fund, this is what's known as a CDFI, Certified Development Financial Institution, as designated by the U.S. Department of Treasury. And it makes loans to folks. Basically, they're small businesses, they're running, they're operating, they're doing okay, but maybe they don't have the collateral or maybe that entrepreneur doesn't have the extensive track record that the bank would like to see. They're solid loans, but they don't quite qualify yet for the conventional commercial loan from a bank or credit union. So, this is the bridge. They can go here to one of the CDFIs in the state and get the capital and credit they need to go forward and grow their business. So again, it's the Capital Access Fund of West Michigan. It's focused on minority-owned businesses. And we'll see how these folks grow and expand and build this capital pool for these small companies.
Patrick Center: Crain's Grand Rapids Business, staff writer Mark Sanchez. Thank you so much.
Mark Sanchez: Thank you, Patrick.