GVSU faculty researchers: Health care wages not keeping up with inflation in Michigan

Roughly one of every 10 employees in West Michigan works in health care, yet their wages are not keeping up with inflation, according to an annual report by Grand Valley faculty researchers.

Daniel Montanera and Cody Kirby, economics faculty members at the Seidman College of Business, presented the state of the region's health February 13 during the 17th annual West Michigan Health Economic Insights event at the DeVos Center for Interprofessional Health. The event was a collaboration by GVSU's Kirkhof College of Nursing and Seidman College of Business, Blue Cross Blue Shield, Blue Care Network and Priority Health.

The annual Health Check report analyzes health trends of residents in Kent, Ottawa, Muskegon and Allegan counties and compares that data nationally and with residents in the metro Detroit region.

Key Health Check findings

Kirby said West Michigan and Detroit hospitals and health care organizations attract and retain employees at rates above the national average, but the inflation-adjusted incomes of those workers have not kept pace with the national average.

Since 2005, the inflation-adjusted earnings of health care workers have increased nationally by 10.7 percent. The inflation-adjusted incomes of West Michigan health care workers have increased by only 3.9 percent during the same period, while earnings in Detroit have fallen by 9.6 percent.

"It's really a warning shot," Kirby said. "How long will attraction and retention rates be above average if wages for those employees are not keeping up with inflation?"

Kirby and Montanera also found that asthma and chronic obstructive pulmonary disease (COPD) are on the rise on both the east and west sides of Michigan. New to the Health Check report this year is the inclusion of air pollution data from the U.S. Environmental Protection Agency.

Kirby said in 2024, the latest reporting year available, air pollution in West Michigan and Detroit exceeded what the EPA considers a healthy guideline. 

Also, smoking and vaping have increased in both West Michigan and Detroit. The researchers said while traditional cigarette smoking has declined, the rise in vape smoking "produces no notable difference in smoking behavior over time."

Montanera said among health care expenditures for chronic diseases, asthma expenditures are the outlier, rising 26% from 2023 to 2024 for West Michigan residents, according to data from private health plans administered by Blue Cross Blue Shield, Blue Care Network, and Priority Health. By comparison, expenditures for coronary artery disease, depression, diabetes and other chronic conditions rose by 3% or less during the same period. 

He added that the rise in asthma-related expenditures could be attributed to changing guidelines in how it is treated, with recommendations for inhaled corticosteroids paired with long-acting beta agonists rather than short-acting beta agonists.

Also, Montanera said the average length of stay in hospital (ALOS) in West Michigan has gone from the lowest among the communities tracked to the second-highest. ALOS has increased from an average of more than 5 days per admission to just under 6.5 days, a 23% increase in two years. 

Montanera said the increase can be attributed to managed care organizations, specifically Medicare Advantage programs, being more selective in directing patients to rehabilitation and nursing facilities, while those post-acute facilities are struggling with staffing and capacity to accept patients. 

"High ALOS is a problem as it creates additional costs for serving patients who should no longer be in the hospital and they’re taking up beds from patients who do need to be there," Montanera said.

More information about the Health Check report is online.