Health Care Sector Battles Constraint vs. Expansion

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The healthcare sector of the Southwest Michigan business arena faces challenges from expanding to handle the load, talent recruitment issues, and the seemingly never-ending constraints of the regulatory overlords. That’s the 50,000 foot level view generated by the latest industry sector survey results collected by the change agents at Kinexus.

The Benton Harbor-based agency has launched launched a series of surveys intended to both gauge industry sector needs and develop benchmark information, while aiding in the overall success of the economic vitality of Michigan’s Great Southwest.

Their latest study sector is the healthcare industry. Kinexus reports today that of the 424 healthcare employers in the tri-county area of Berrien, Cass & Van Buren Counties, 11-percent of the industry responded to the survey. In their latest survey, Kinexus indentified that tri-county area providers are expanding service offerings and facilities while also balancing regulatory uncertainty.

Kinexus CEO Todd Gustafson tells us, “Healthcare is one of our region’s most vital industries, providing an estimated 10,571 jobs and $609 million in economic impact on Berrien, Cass, and Van Buren Counties inclusive of wage impact, taxes, and property income taxes.” He adds, “We hope the data collected is a resource for the regional healthcare providers as we work to address their business challenges and provide them with long-term, sustainable solutions.”

Nationally the health care sector is struggling with rising costs, uneven regulatory standards, and transformation to value-based health care. Despite the concerns, Kinexus has found that our tri-county providers are trending in the right direction and poised to grow at 10.1-percent by 2024 compared to the nation at 19.8-percent.

Medical advancements, technology implementation, and an increase in aging population have led our tri-county providers to begin both short and long term planning. Nearly 54-percent of survey participants indicated that they will be undergoing an expansion of services or increasing their footprint over the next 2 years or are currently expanding.

Those expansions are in alignment with the current data for the tri-county area. With 18-percent of the tri-county population being 65 or older, representing 50,770 individuals, it’s important to have the infrastructure in place to support those who are in need of patient care services.

Tri-county healthcare providers also reported that they are facing many constraints within the industry such as limited training facilities and regulatory uncertainly.

Nearly half of the healthcare providers indicated that the lack of applicants applying was a concern in terms of talent recruitment. As the local population and healthcare needs grow, area employers are struggling to capture the talent needs for trained medical professionals, specifically licensed professionals such as Registered Nurses and Social Workers. The average annual salaries of these positions indicate Registered Nurses at $59,342, Certified Nursing Assistants at $27,206 and Social Workers at $44,782.

Alex Grumbine is Director of Business and Industry for team Kinexus. He says, “With the continued growth and talent requirements of the healthcare industry, we need to focus on increasing the availability of educational training facilities to enhance program completions to meet demand. We do not see a lack of individuals interested in pursuing careers in healthcare but more lack in infrastructure to train the number of people interested in programs. I’m glad to see Southwestern Michigan College is taking a proactive role in expanding their healthcare department.”

Southwestern Michigan College (SMC) is planning a $9.6 million expansion to add an additional 17,000 -square-feet to their Nursing and Health Education Wing, for the fall 2018 classes. SMC Board Chairman Thomas F. Jerdon says, “It’s quite a building and the need for expanded nursing education facilities in our region is clear.”

Survey results also revealed that 57-percent of healthcare providers reported that they are providing more training and development for their existing staff to overcome their talent issues. In addition to the talent infrastructure crunch, almost 40-percent of survey takers indicated that applicants are looking for more pay as the second largest issue disrupting recruitment efforts.

Regulatory uncertainty, a national challenge, has carried over to local healthcare providers as the leading current strategic planning concern. Fully 70-percent of participants stated that regulatory impacts over the next one to two years could affect the landscape of patient care and service providers.

As Kinexus continues to learn from surveying the industry, they aim to enhance their partnerships with local area training providers by increasing awareness of and investment into training opportunities. If you are interested in pursuing a career in healthcare or an organization needing to up-skill existing employees, you are encouraged to connect with your local Kinexus office.

Kinexus intends to roll out the third series of surveys to the Hospitality industry in the next week.

Kinexus is an organization that invests its time and resources into creating integrated solutions for business, workforce, and community challenges to promote economic vitality in the Southwest Michigan region. For more information, you can visit www.Kinexus.org, or follow along on Twitter @KinexusGroup or through Facebook at Facebook@KinexusGroup.