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By Spencer Johnson, President
Michigan Health & Hospital Association

Ask any community member or a business looking to relocate, and they will tell you that together with education and public safety, hospitals are one of the indispensable services that lay the foundation for wellbeing and prosperity.

Next year, Michigan’s healthcare sector will face many uncertainties, including a massive budget deficit, record-high and increasing Medicaid rolls, mounting physician and nurse shortages and the debates surrounding national healthcare reform. However, 2011 inherently holds opportunity for progress. November’s elections have ushered in new leadership and legislators who have willingly pursued the opportunity to face these challenges head on.

The Michigan Health & Hospital Association (MHA) and the state’s community hospitals look forward to working with the Snyder administration and newly elected lawmakers to ensure their support for hospitals’ efforts that are already yielding higher quality, greater efficiency, lower costs and healthier communities.

Hospitals are more than community health stewards, they are top employers. Healthcare is Michigan’s largest private sector employer, providing jobs to nearly one million residents who earned $45 billion in wages and paid $14 billion in taxes in 2008. The economic impact of hospitals extends beyond salaries and benefits provided to the more than 200,000 people they employ. Hospitals and their employees purchase local products and services, such as laundry services, food, clothing, cars, etc., thereby supporting countless other businesses.

Despite the size of the healthcare workforce, the need for more clinicians is outstripping the supply. To prepare for these increasing personnel needs, the state must preserve medical liability reforms. An unfriendly liability climate hinders hospitals’ ability to recruit and retain physicians and directs resources away from much-needed patient care. Erosion of these reforms would return Michigan to the medical liability crisis of the 1980s, rather than allowing the state to move forward as a national center of excellence for healthcare and adapt to the growing importance of hospital-physician alignment. In the year ahead, Michigan will see its providers increasingly align to ensure safe and efficient care for their patients.

For years, Michigan has slashed Medicaid reimbursement to providers, leading to severely inadequate rates that do not cover costs of care. This makes it difficult for physicians to treat Medicaid patients and for hospitals to maintain costly services for the program’s record-high 1.9 million recipients. As a result, many citizens have no access to primary care and must seek services in hospital emergency rooms, delaying needed care and resulting in cost shifts to the private sector. As a result of healthcare reform, more people will be joining the Medicaid rolls this year and next — making adequate reimbursement critical.

Michigan community hospitals provide care to all who walk through their doors, regardless of ability to pay. In fiscal year 2008, Michigan community hospitals lost more than $700 million dollars on Medicaid services, and provided more than $797 million in uncompensated care. To ensure that the needs of their communities can be met, many have partnered with other hospitals or healthcare systems to achieve additional stability and cost savings. In these lean economic times, Michigan hospitals will continue their efforts to be among the most efficient in the nation.

In the last decade, Michigan hospitals have created and implemented innovative collaboratives that voluntarily and significantly improve healthcare quality. These pioneering efforts, now emulated nationwide, are being lauded by government leaders, supported by federal agencies and replicated by experts. Led by the MHA Keystone Center for Patient Safety & Quality and the MHA Patient Safety Organization, Michigan hospitals are participating in evidence-based initiatives to improve care as they use data and best practices to improve outcomes. Through these efforts, Michigan hospitals are implementing procedures that significantly reduce infections, develop safer obstetrics care, improve emergency room care, lower the risk of surgical errors, reduce avoidable re-hospitalizations and more. These initiatives also lower Michigan hospitals’ costs, which are below the national average and rank lowest among the six Great Lakes states, saving employers $500 million every year.

These challenges, along with the myriad issues presented by healthcare reform, will be central to the work of the state’s hospitals and the MHA in the coming year.

As 2011 welcomes new faces to Lansing, the MHA and Michigan community hospitals stand ready to face the matters that lie ahead. If protected, healthcare’s role as an economic engine and community steward has the ability to be a steadying force, using high-quality, efficient, and low-cost care to support economic recovery and ultimately, lead to a healthier Michigan.