Grand Valley State University has released its annual West Michigan health care report. The Health Check report analyzes health trends in Kent, Ottawa, Muskegon and Allegan counties and compares it with national data. WGVU’s David Limbaugh spoke with one of the report’s authors, Visiting Professor of Economics at GVSU, Cody Kirby, about some of his findings.
Cody Kirby: The first thing we find is an increase in healthcare demand in West Michigan stemming from two factors. One: we're finding evidence of increased population. So, as more people come here, we would expect healthcare demand to rise, rising healthcare costs, and therefore straining our hospital system. We also find that our population is getting older. And as they get older, that would contribute to higher demand as well. When we look at some of our chronic conditions like asthma, heart disease, depression, these have all been increasing since the start of the pandemic. And again, as those prevalence rates creep up, we're sending more people to the hospital for those conditions. That's an increase in demand, increases the cost of healthcare overall, as well as strains the hospital system. And I want to be able to say something about our ability to meet that demand. So, I turned to healthcare supply and, in particular, I turned to labor supply. Now we're finding that employment is up both in healthcare occupations and overall, in West Michigan, but that success isn't met in all occupations. There's a lot of healthcare occupations right now that have shortages that are present. And one of those occupations, which is really popular, is what's happening among our registered nurses. Some interesting things have actually come out about our registered nurses. If we look at our registered nurses, and in particular, we look at job replacement rates. So, I define replacement as individuals that have exited the occupation or have retired. So, I want you to think of it as our ability to retain existing talent. Well, since the start of the pandemic, job replacement rates in Grand Rapids have been significantly lower than the national average, which tells us that there's something about Grand Rapids and really the state of Michigan overall that is able to retain. These registered nurses. So, we're retaining our nurses better than the average health care provider across the country. Now, I want to be able to say something as well about new job growth. So, what's happening to the new positions that are being created among registered nurses? I interpret this as our ability to attract new talent. And when we look at our ability to attract new talent, on average in West Michigan, it's significantly higher than what we're observing nationally as well as at the state level. So, there's something happening in West Michigan. We're able to attract new talent and we're able to retain it better than the average healthcare provider across the country, yet we still have this shortage. Well, it turns out this labor shortage isn't something that's just happening in West Michigan or Michigan overall. It's happening in every state across the country right now. And if we were to rank shortages by state, what you'd actually find is that the shortage that we're observing among a lot of our occupations and in particular registered nurses, the shortage that we're observing in West Michigan is actually relatively small compared to the rest of the country. Now, what's driving this nursing shortage? Like, how can we help get rid of it? What can our firms do. And for that, I turn to look at inflation adjusted earnings. And when I look at inflation adjusted earnings, something odd is actually happening. And it's that our earnings expectations are not keeping pace with the national average. So somehow, we're able to attract and retain nurses better than average, yet we're paying them below average. And from a healthcare provider's perspective, that's a great thing, right? They're getting lower costs. But I also offer it as a warning shot, which is how long can we get away with doing that? How long can we not keep pace our wage expectations or our wage growth? How long can that not keep pace with the national average? And yet we still keep attracting and retaining talent better than average. So, I want to say something about, you know, the future of our labor supply, which is what's happening at the university level, what's happening to our enrollment data. And if we look at enrollment into nursing programs, well, since the start of the pandemic, it's been largely constant. However, if we look at enrollment data in West Michigan in particular, so if I pulled data from Grand Valley, Grand Valley's nursing program is up by like 26 % since the start of the pandemic, which is great news because if we can keep those workers in West Michigan and we can put them into our hospital system, it helps abate some of that shortage that we're also observing. So that's really the key findings that I take away from this research.
David Limbaugh: Visiting professor of economics at Grand Valley State University, Cody Kirby, thank you so much for talking with us today.
Cody Kirby: Awesome. Hey, I appreciate the call.
