In this issue:

Health Care is Michigan’s Largest Employer

Medicaid Cuts Hurting Millions across Michigan and Nation

Economist: Covering the Uninsured Would Save Billions

Emergency Department Visits Reach Record High, CDC Reports

Editorial: The Key to Better Health

Health Care is Michigan’s Largest Employer, Will Generate Thousands of New Jobs in the Future

Health care is Michigan’s largest employer, providing more than 472,300 direct jobs and 254,340 indirect jobs that pump $29.8 billion a year in wages and salaries into the state’s economy, concludes a study released on June 3 by the Partnership for Michigan’s Health.

The study, titled the “Economic Impact of Health Care in Michigan,” quantifies the substantial economic impact of health care in the state and includes regionalized information showing Michigan health care workers and their employers pay more than $8 billion annually in taxes.

The study is an analysis of data compiled by the Minnesota IMPLAN® Group Inc. and includes data and information from the U.S. Bureau of Economic Analysis, the U.S. Bureau of Labor, and the U.S. Census Bureau. The study was released at the Detroit Chamber of Commerce Mackinac Policy Conference on Mackinac Island. Key findings include:

• With more than 472,300 direct jobs, health care is Michigan’s largest single employer. As a sector, total direct health care employment exceeds Michigan’s agricultural and automotive manufacturing sectors. Michigan’s direct health care workers earn about $21.2 billion a year in wages, salaries and benefits.

• More than 254,340 Michigan citizens work in jobs that are indirectly related to health care or induced by the health care sector. Michigan’s indirect and induced health care workers earn about $8.6 billion a year in wages, salaries and benefits.

• Direct, indirect and induced health care jobs total more than 726,640 in Michigan. Wages, salaries and benefits for direct, indirect and induced health care jobs total $29.8 billion in Michigan.

• 58 Michigan counties have more than 1,000 direct health care jobs.

• 19 Michigan counties have more than 5,000 direct health care jobs.

• 14 Michigan counties have more than 10,000 direct health care jobs.

“With our economy in transition, health care is emerging as Michigan’s most important source of good jobs,” said Spencer Johnson, president of the Michigan Health & Hospital Association. “The investment Michigan makes in health care supports the delivery of lifesaving services and supports more jobs than any other sector in Michigan.”

Today, nearly 16 of every 100 Michigan jobs are directly or indirectly created by health care, the study found. Other studies show that Michigan will create roughly 100,000 new health care jobs between now and 2015.

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Medicaid Cuts Hurting Millions of People across Michigan and Nation

Virtually every state is reeling to control skyrocketing Medicaid costs, and nearly all states are slashing Medicaid funding, reducing benefits or doing both. Some states are tossing hundreds of thousands of people off Medicaid, leaving them with no source of health care.

In the current fiscal year, 43 states have limited access to prescription drugs, 15 tightened eligibility and nine cut benefits, according to the Progressive Media Project in Madison, Wisconsin. In an effort to balance their 2006 budgets, states are eyeing massive cuts.

• In Michigan, where a record 1.42 million people are now relying on Medicaid, the governor has proposed $125 million in Medicaid cuts for 2006. Some Republican legislators want even deeper cuts. Michigan has slashed Medicaid funding by more than $540 million since 1998, even as the caseload has skyrocketed.

• Tennessee Gov. Phil Bredesen originally announced plans to cut 323,000 adults from TennCare, but he recently agreed to limit the cuts to only about 225,000 people. TennCare covers about 1.3 million people — or nearly 23 percent of the state’s population. When it was created in 1994, it was considered a national model because it was more generous than most expanded Medicaid programs.

• The current Ohio budget includes significant cuts in Medicaid payments to the state’s six children’s hospitals. The state has also frozen Medicaid reimbursement for the next two years.

• When all of Missouri’s Medicaid cuts take effect, an estimated 100,000 low-income parents, people with disabilities and elderly citizens will lose their Medicaid coverage.

• Proposed cuts in North Carolina would impose new income limits that would eliminate eligibility for thousands of residents. Benefits would be reduced for tens of thousands of additional Medicaid patients.

• In Pennsylvania, the state would pay for only a certain number of visits to the doctor and hospital for Medicaid patients under cuts proposed by the governor.

One state bucking the trend is Oklahoma, where lawmakers have approved $63 million in state oil and gas reserve funds for Medicaid, allowing the state to qualify for an additional $200 million in federal Medicaid matching funds. The money will be used to increase Medicaid reimbursements to hospitals and physicians to help close the gap between the cost of care and what the state Medicaid program can afford to pay.

This spring, Congress approved $10 billion in cuts to state Medicaid funds over the next seven years, which will put even greater pressures on states to reform their Medicaid programs.

“In terms of Medicaid, Michigan and virtually all other states are in a precarious and worsening crisis,” said Spencer Johnson, president of the Michigan Health & Hospital Association. “States face the predicament of needing to find more revenues, reduce benefits or dismiss thousands to millions of people from eligibility. None of these solutions is easy, but denying health care to children, families, elderly and disabled citizens would lead to a health care crisis the likes of which we have not seen as a nation. And that would do nothing but drive costs higher for those of us who have private health care insurance and our employers.”

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Economist: Covering the Uninsured Would Save Billions

Health care economist Kenneth Thorpe projected that four models proposed by the National Coalition on Health Care to expand health care coverage to all Americans would save more money that they would cost to implement. In its report, the coalition proposed four models for achieving universal health coverage: requiring employer-based coverage while providing subsidies for low-income Americans, expanding existing public health insurance programs, creating new public programs for the uninsured, and publicly financing universal coverage. Thorpe said each model would reduce health care spending by at least $320 billion over 10 years when combined with quality and safety improvement, administrative simplification and cost-containment measures. The number of uninsured Americans is expected to grow to 54 million from the current 45 million within a decade, he said.

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U.S. Emergency Department Visits Reach Record High, CDC Reports

Emergency department (ED) visits in the United States reached a record high of nearly 114 million in 2003, while the number of EDs continued to decrease to 3,910, according to a report by the U.S. Centers for Disease Control and Prevention. The report attributes the rise in visits to increased use by adults, especially those age 65 and over, and said Medicaid patients were four times more likely to seek treatment in an ED than those with private insurance. “Emergency departments are a safety net and often the place of first resort for health care for America’s poor and uninsured,” the lead author noted.

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The Key to Better Health

Spencer Johnson, president Michigan Health & Hospital Association

Michigan residents, relatively speaking, are not very healthy. Among the 50 states, we in Michigan are looking up from the bottom on far too many health status indicators.

• Our rates of obesity and tobacco use lead nearly all states (in other words, we are nearly the worst on both of these indicators).

• Our rates of diabetes are alarmingly high among the states, and especially among our African American and Native American populations.

• We rank nearly worst in the nation in incidences of chronic heart disease.

For virtually all of these indicators, Michigan citizens have the power themselves to improve.

We can move more. We can eat better. We don’t have to smoke.

Move more. Eat better. Don’t smoke. Those are the three steps to improving the health status of thousands of Michigan citizens. Collectively, they also are the theme of Michigan Surgeon General Kimberlydawn Wisdom’s “Michigan Steps Up” campaign to improve the health of Michigan citizens.

All Michigan residents share a concern these days about access to affordable health care. It’s time more of us take some personal responsibility for improving our own health status, which will do more to keep health care costs in check than any public policy that could possibly be fashioned in Lansing or Washington.

For more information about Michigan Steps Up, visit www.michigan.gov/surgeongeneral.

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