Center for Studying Health System Change

Lansing's Economic Doldrums Threaten Broad Health Care Benefits

Continued Economic Slump Leading to Increases in Patient Cost Sharing

News Release
Oct. 6, 2005

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—The languishing economy in Lansing and the rest of Michigan is threatening workers’ broad health benefits and the ability of local and state governments to sustain coverage for low-income people, according to a new Community Report released today by the Center for Studying Health System Change (HSC).

Lansing has a history of relatively comprehensive employee health benefits—largely a result of collective bargaining agreements in the automobile industry. But the continued sluggish economy has prompted employers to start shifting more health care costs to workers. Michigan’s slow economic recovery also has led to persistent state budget problems, threatening major cuts in public health insurance programs.

"So far, the benefit changes have been modest for the most part, but employers, especially small firms, are looking for ways to shift health costs," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Other key findings of the report, Lansing’s Calm Health Care Market Belies Increased Competition, Economic Doldrums, which is available here, include:

• Physician groups have become more active in seeking other revenue sources--in the form of services traditionally provided by hospitals--in response to financial pressures.
• Sparrow Health System has maintained its market leadership position, but Ingham Regional Medical Center has become a stronger competitor as its merger with McLaren Health Care Corporation, headquartered in Flint, enhances its capabilities.
• The Ingham Health Plan, an innovative, limited benefits coverage program sponsored by Ingham County government, has expanded to cover an estimated 50 percent of the county’s uninsured residents and serves as a model for other Michigan counties.

Lansing is one of 12 communities across the country tracked intensively by HSC researchers through site visits. The new report is based on a May 2005 site visit and interviews with nearly 70 Lansing health care leaders, representing health plans, employers, hospitals, physicians and policy makers.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.