Education and Job Growth

This section examines labor supply and its ability to meet healthcare demand by analyzing employment and inflation-adjusted earnings for various healthcare occupations in the U.S., Michigan, Grand Rapids, and Detroit since the onset of the Great Recession in 2005. By 2012, total employment in Grand Rapids had returned to its pre-recession level, highlighting a quick recovery from the Great Recession. In comparison, employment in Detroit failed to recover from the Great Recession until late 2019, when the economy was then affected by the COVID-19 pandemic. Again, Grand Rapids recovered quickly from the pandemic, returning to its pre-pandemic level in 2022, while Detroit's economy did not recover until late 2023. 

Analyzing aggregate employment data fails to account for the heterogeneity within and between occupations. Therefore, we break down our aggregate employment measures by industry and occupation. Since the onset of the Great Recession, healthcare has become a vital component of the overall economy. For example, the fraction of workers employed in healthcare increased from 7.6 percent to 10.4 percent in Grand Rapids between 2005 and 2024. Approximately 1 in 10 West Michigan residents works for a Grand Rapids-based healthcare provider. A comparable story unfolds in the U.S., Michigan, and Detroit data.

Focusing on healthcare, we find that employment in healthcare practitioner and technical occupations and healthcare support occupations increased by 110.1 percent and 83.3 percent in Grand Rapids since the start of the Great Recession in 2005. Employment in these occupations continuously increased in Grand Rapids throughout the sample. In other words, we find that healthcare practitioner and technical occupations and healthcare support occupations were largely unaffected by the Great Recession in West Michigan. The employment gains observed in Detroit exceed the estimates found in Grand Rapids during the same period. These findings relate to the trends observed in inflation-adjusted earnings. We find that while Grand Rapids- and Detroit-based healthcare providers are attracting and retaining more workers, they are doing so at a low cost, as evidenced by below-average inflation-adjusted earnings growth, which will make it harder to attract and retain talent in the future.   

Turning to the COVID-19 pandemic, we find that employment in healthcare practitioner and technical occupations exceeded the national growth rate in Grand Rapids and Detroit. However, while employment in healthcare support occupations exceeds the national average in Detroit, it lags behind it in Grand Rapids. Changes in inflation-adjusted earnings can plausibly explain these results. For example, the increases in Grand Rapids-based healthcare practitioner and technical occupations can be plausibly explained by above-average inflation-adjusted earnings growth, which attracts and retains talent. Meanwhile, the decrease in healthcare support employment can be explained by below-average inflation-adjusted earnings growth. The low employment growth in Detroit for healthcare practitioners and technical occupations, and healthcare support occupations can be explained by below-average inflation-adjusted earnings growth.  

The remainder of the section examines job replacement rates stemming from occupational exits and retirements, new job growth rates, and inflation-adjusted earnings changes for the top ten occupations with the highest turnover in the U.S., Michigan, Grand Rapids, and Detroit. We find that, for many healthcare occupations in short supply, the replacement rates observed in Grand Rapids and Detroit are considerably lower than the national average, highlighting an above-average ability to retain existing talent. Meanwhile, for many healthcare occupations, new job growth rates in Grand Rapids and Detroit exceed the national average, indicating an above-average ability to attract new talent. Both findings suggest that the labor shortage for many healthcare occupations in East and West Michigan is less severe than the shortage observed nationally.   

To attract new talent and retain existing employees, we analyze inflation-adjusted earnings in each occupation since the onset of the Great Recession in 2005 and the COVID-19 pandemic in 2019. For some healthcare support occupations, we find that inflation-adjusted earnings growth exceeds the national average in Grand Rapids and Detroit, which would help attract and retain talent. However, for many occupations, the inflation-adjusted earnings growth rates do not keep up with the national average, indicating cost savings for our healthcare providers, making it hard to attract and retain talent, and unlikely to abate the labor shortage in the future. 

Lastly, we examine undergraduate enrollment to assess the availability of future new hires. We find enrollment gains across many healthcare programs in the U.S. and Grand Rapids. For example, since 2019, enrollment gains have been observed in degrees, including those from the health professions, health sciences, administrative services, public health, and graduate-school preparatory programs. Additionally, nursing enrollment at Grand Valley State University has increased by 25% since the onset of the pandemic in 2019.

Medical Innovation

There has been an increase in medical patent activity in West Michigan since the 1990s, along with a growing number of new innovators. Patents with inventors residing in Kent County have increased from an annual average of 12.8 from 1990 to 1999 to 46.3 from 2000 to 2009, with a decrease to 30.6 patents from 2010 to 2024. However, behind these averages is a concerning development — a significant decrease in the number of medical patents since 2014, mirroring a decline seen nationally and statewide. In addition, medical patenting in the region comes from a relatively small number of companies. One positive development was a sharp increase in local patenting in 2023, though patenting fell back in 2024.

Because patented medical innovations have a great potential for creating wealth and economic growth in West Michigan, continued research and development support is vital. Fortunately, National Institute of Health funding in West Michigan has grown substantially, possibly resulting in innovations and knowledge that do not result in patents.

Demographic Changes

In this report, we continue to track population growth rates and demographic changes in the U.S., Michigan, West Michigan, and East Michigan. We observe an increase in West Michigan's population, along with continued population aging. We anticipate that West Michigan's population growth will lead to higher healthcare demand, resulting in higher healthcare costs for West Michigan residents and increased healthcare utilization. Similar trends are observed in East Michigan and at the state and national levels.    

West Michigan's population growth rates closely track the national averages, while simultaneously outpacing both statewide averages and those observed in East Michigan. For example, the population of West Michigan has increased by 11.4 percent, 2.3 percent, and 1 percent since 2009, 2020, and 2023, respectively. Meanwhile, the population has increased by only 1.4 percent, 0.7 percent, and 0.6 percent at the state level during the same period. We find evidence of a long-term decrease in East Michigan's population, accompanied by a recent resurgence that outpaces the Michigan average.           

We continue to observe long-term population aging among all geographical samples. For example, between 1990 and 2024, West Michigan's population aged 65 and older has continued to grow, increasing from 11 percent of the total population to 17.1 percent. Similar trends are observed in East Michigan, statewide, and nationally. Since younger generations subsidize Medicare for older generations, a decrease in the share of younger age cohorts highlights future challenges for Medicare's funding mechanism and its solvency.

Health Care Overview

In this section, we continue to report on different disease prevalence metrics and their causal factors across East and West Michigan. Furthermore, we break down these overall trends by race and gender to examine heterogeneity within and between each cross-section of data. The results highlight a recent increase in chronic lung conditions, including asthma and chronic obstructive pulmonary disease (COPD), that can plausibly be explained by a recent surge in smoking and air pollution levels observed in each locality. Second, we find evidence of an increased prevalence of heart conditions, including heart disease, heart attack, stroke, and cardiovascular disease, that may be explained by increases in obesity and a deterioration in physical health. Third, we find an increase in diabetes diagnoses, which is particularly evident among West Michigan’s non-white residents. Fourth, we see a recent rise in kidney disease, primarily impacting the male population. Fifth, we continue to observe a decline in mental health, showing increases in depression diagnoses. Finally, we track the proportion of people delaying care for cost-related reasons and show a link to the recent decline in economic activity since the start of the COVID-19 pandemic. Disease prevalence metrics are positively related to healthcare demand. Therefore, we anticipate that the rise in these conditions will lead to higher healthcare costs and strain healthcare providers in the future. 

Turning to asthma, we find that the number of diagnoses has increased by 3.8 percent in West Michigan, with no apparent difference between males and females. However, when asthma is broken down by race, we find evidence of an 11 percent surge in asthma cases among West Michigan’s non-white population. Furthermore, we analyze smoking prevalence and air pollution as causal factors plausibly contributing to the rise in asthma cases. While traditional cigarette smoking is on the decline among all genders, we find a 3.7 percent increase in cigarette use among West Michigan’s non-white citizens. We continue to find evidence of a substitution from traditional cigarettes to e-cigarettes, with electronic smoking up by 5.7 percent in West Michigan since the onset of the COVID-19 pandemic in 2020. Turning to air quality, we track particulate matter pollution in East and West Michigan and find that levels in both locations typically exceed the U.S. Environmental Protection Agency’s (EPA) recommended guidelines for a healthy environment. 

Next, we examine heart conditions, including heart disease, heart attack, stroke, and cardiovascular disease. All heart conditions appear to follow the path laid out by heart disease, which shows a 2.9 percent increase since 2020. Heart disease seems to be a problem among West Michigan’s white residents and males. For example, during the same period, West Michigan’s white citizens reported 3.3 percent more heart disease diagnoses, with a 4.7 percent increase within the male population alone since the start of the COVID-19 pandemic. To explain the rise in heart disease, we examine obesity rates and the prevalence of poor physical health. Our causal factors indicate increases in obesity rates across these strata of data, including a 4.1 percent surge in poor physical health measures since the onset of the pandemic. 

In examining the diabetes data, we find a 3.1 percent increase in diagnoses since 2011, with a 3.7 percent increase since 2023 alone. By breaking down the data by race, we find that West Michigan’s white population has observed a 3.1 percent increase in reported cases since 2020, which pales when compared to the 7 percent rise in cases within West Michigan’s non-white community. The increase in diabetes appears to be driven by a recent surge in reported female cases.

The recent mental health crisis unfolding in West Michigan warrants further discussion. For example, clinically diagnosed depression has increased by 7 percent since the onset of the pandemic in 2020, which is reflected in the data by race and gender, as well. However, depression has increased by 11.6 percent in West Michigan’s minority populations, along with a 12.4 percent rise in reported cases by females. On a positive note, men appear to be growing more comfortable seeking help, with male cases up by 3.5 percent over the last year.

Finally, we turn to parties delaying care for cost-related reasons, which highlights an increase in delayed care since the beginning of the COVID-19 pandemic in 2020. For example, since 2020, 4.4 percent more West Michigan residents are reporting delaying care for reasons related to cost, which is of particular concern among our non-white residents.

Benchmarking Communities

Compared to a group of peer communities, we find that the hospital admission rate in the Grand Rapids region in 2023 reached a new record low for the city (78.27 admissions per 1,000 residents in Grand Rapids vs. an average of 107.23 in the peer communities). This represents a 3 percent decrease for Grand Rapids, while the admission rate increased by 1 percent for the benchmark communities and the national average increased by 2 percent. As a result, the admission rate in Grand Rapids is now 19 percent below the national average, which is an increase from last year’s 14.8 percent difference. In 2023, Grand Rapids and Muskegon experienced a 3 percent decrease in outpatient visits per capita while that for all other communities increased slightly. While Grand Rapids region still has the highest per capita outpatient visits to hospitals of all comparison communities, it is only 71 percent above the national average in 2023, compared with 79 percent in 2022.

The most concerning trend for Grand Rapids is the rapid rise in average length of stay in hospital. This increased by 10 percent between 2022 and 2023, which follows two previous years of high growth. Average length of stay declined slightly in all comparison communities between 2022 and 2023. As a result, in just two years, Grand Rapids went from having the lowest average length of stay to having the second highest, behind only the benchmark communities. To the extent that this change reflects a greater severity among inpatients, with each requiring greater utilization of hospital resources, this could portend greater strain on Grand Rapids’ already low hospital capacity.

The data on number of hospital personnel and compensation per worker reveals that the COVID-related burnout among hospital-based personnel remarked upon in previous versions of this report had largely resolved by 2023. This is because hospital-based personnel per capita largely leveled off between 2022 and 2023 while real compensation tended to decline, indicating that hospitals were able to retain personnel without increasing real compensation.

Major Medical Conditions: Expenditure and Utilization Analysis

We used member data provided by Blue Care Network, Blue Cross Blue Shield of Michigan, and Priority Health to examine average annual expenditures and health care use for those diagnosed with at least one of the following six chronic conditions: asthma, coronary artery disease (CAD), depression, diabetes, hyperlipidemia, and low back pain.

Understanding that, from year to year, small coding changes may affect the composition of the diagnosis categories, the most concerning finding from 2024 is a sizeable increase in expenditure per member diagnoses with asthma. This grew 26 percent in the KOMA region and 28 percent in Detroit, revealing this to be a statewide problem rather than a regional one.  Further analysis suggests that almost 90 percent of the expenditure increase per member with asthma is due to higher spending on prescription drugs, likely due to higher prices or more expensive medications, as the annual prescription fills per member did not change much. The other chronic conditions saw modest changes in expenditure per member, although the increases tended to be greater in the Detroit region. In KOMA, in addition to the aforementioned asthma, spending was up for those diagnosed with low back pain (+1 percent), CAD (+1.2 percent), and hyperlipidemia (+0.3 percent). Spending was down for depression (-0.8 percent) and diabetes (-3.5 percent). Spending also increased significantly for healthy patients (+3 percent). This is following general increases in expenditures observed in 2023.

Expenditure in Detroit between 2023 and 2024 tended to increase for these conditions (excluding asthma) with increases of between 1.3 and 5.9 percent. As was previously mentioned, the spending increase for asthma was much greater. Expenditure increased in Detroit for healthy patients (+2.6 percent), but only slightly less than in Grand Rapids. The rapid growth in asthma spending is a concern, particularly if this reflects greater severity and intensity of treatment among members with the diagnosis.

Disparities

The member data from Blue Care Network, Blue Cross Blue Shield of Michigan, and Priority Health were linked with 2020 census data on population, mean household income, and race at the ZIP-code level. The goal of this section is to examine differences in private insurance coverage, underlying health characteristics, and the prevalence of several chronic conditions across ZIP codes with different income levels and racial concentrations. Furthermore, the insurance plans contributing data to this section provided detailed information on total member months by ZIP code. We observe patterns that are consistent with disparities by income and race in Michigan, although there are differences between the east and west sides of the state.

Concerning income, KOMA and Detroit regions exhibited comparable disparities between High- and Low-Income ZIP codes in the underlying health characteristics of the population. This is despite KOMA having less disparity in household income than Detroit. The average risk score among residents of the Low-Income ZIP codes of the KOMA region is 15 percent greater than that of the High-Income ZIP codes; it is 21 percent greater in the Detroit region. While patterns in income disparities in chronic condition prevalence were similar in the two regions, as has been noted in previous versions of this report, there were some reductions in these disparities, which is encouraging.

Concerning race, some different patterns in health disparities remain in 2024 between the two regions, but these differences are more muted than in the past. An exception was diabetes, where the opposite racial disparity is observed in the two regions. Average risk scores were higher for High Share Black ZIP codes than for High Share White ZIP codes in Detroit, while this was not the case in KOMA. There were sizeable percent increases in the prevalence of several conditions (asthma, depression, diabetes, and low back pain) among the High Share White ZIP codes of KOMA, compared to small or no changes in Detroit.

To summarize, both KOMA and Detroit regions showed some general reductions in racial disparities in the prevalence of chronic conditions, which is encouraging. For KOMA, it tended not to be due to improving conditions among the High Share Black ZIP codes, however, but from worsening conditions among the High Share White ZIP codes, which is a troubling development.