Economic Climate - Healthcare
A Message From Jim McConoughey
One of the most visible and fastest growing sectors of our economy in Central Illinois is the Healthcare Industry. This sector employs over 15% of the workforce in the Tri-County area, and is one of the top industries along with Manufacturing and Transportation. There has been $300 million in the past year and a half invested on the healthcare building and construction side. In past five years, about a billion dollars in new construction projects and deliverable care systems have been put in place. Healthcare is a booming industry for our region.
The need for the Healthcare Industry is about to grow! The baby boomers are going into their most health care use years. The aging population will soon be putting more demand on the industry creating a need for more healthcare workers. The Illinois Department of Employment Securities projects that from 2004-2014, more than 5,000 jobs will be created in the healthcare industry, which is a 21% growth in workforce. That growth represents 25% of the total growth of all industries that this region will see, making it the fastest growing industry in the region.
We are already dealing with a shortage in healthcare professionals in the region and the community will need to do something to increase the capacity of training programs and enhance the recruitment programs for physicians in the near future.
We met with people inside the Healthcare Industry to get their opinions on what's happening right now and how the recession is affecting them. We hope you find this information useful.
“The Economic Situation:
A National Overview and Local Update”
Paul Macek, President and CEO of Proctor Hospital, says the biggest impact this economic recession has on the healthcare industry is with the credit markets. He says the ability for hospitals and healthcare organizations to access credit markets is more difficult. “That’s important because we use the credit markets to fund major capital expansion programs and buy new technology and new equipment.”
Macek says in a recessionary economy, the demand for Medicaid services increases, but the ability of the state to fund it decreases because of decrease in tax revenue. “It takes the state much longer to pay hospitals for services provided. In fact at Proctor we are seeing a 120 day delay from treatment to state repayment.” He says there has also been an increase in Medicaid population in our region and his hospital has seen an uptick of 4-5% uninsured for 4th quarter of 2008.
Dr. Andy Chiou a vascular surgeon with the Peoria surgical Group says we have a unique climate of healthcare in Central Illinois thanks to Caterpillar. “Cat helped create a great insured program for employees. We do slightly better here in healthcare than other areas because of that.” Dr. Chiou believes the economic downturn will affect all of us, but at the doctor level he thinks there is a bit of insulation. “A lot what we do is affected by policy or insurance plans enacted a year or more ago. Any major changes that occur may take a year or two to have full impact.” He also says those who are unfortunately laid off still have insurance for a limited time so they’re covered for a while still. “We’ll see delays on things like elective surgeries but that hasn’t happened yet. The east and west coast is seeing a major decline, but we aren’t yet.”
Dr. Chiou stresses that people shouldn’t put off going to the doctor, “You don’t put off repairing your car. The more you put off a trip to the doctor, the worse it could end up.” He says routine maintenance on your self is important. “You tend to pick up small things that might be fixed early instead of waiting until something dramatically bad happens and sends you to the emergency and that will be harder on you and your pocketbook.”
Macek and Chiou both say while we are in a recession, they believe the economy isn’t as bad here as other regions of the country. According to Macek, “We don’t experience the significant peaks and valleys like the east and west coasts.” He says the fact that we are also fiscally conservative in the Midwest makes a big difference. Proctor has instituted a 3% wage increase this year and is looking for employees to hire, so there is a bright spot.
Dr. Joshua J. Lewer
A few notes on the Healthcare Industry
In 1960, aggregate health expenditures in the United States were 5.1% of GDP; by 1997, the health expenditure share stood at 13.6%. This is about were it is today, meaning that $1 of $7 dollars spent in the economy are health related.
Healthcare sectors have increased over twice as fast as the rest of the economy from 1999-2008. Healthcare construction spending continues to increase nationally and locally.
In 2008, healthcare related fields were attributed with making over 500,000 jobs. The fastest areas of growth include: imagining centers and home hospice.
The U.S. Department of Labor projects occupational employment growth from 2006-2016:
A. All occupations +10%
B. Health care practitioners +20%
C. Health care support staff +27%
Wages have increased nearly twice as fast as the national U.S. labor market.
Here in the Peoria MSA, healthcare related employment has increased from 15% of total employment in 1990 to over 17% in 2007. Peoria is the healthcare center of Illinois outside the Chicago area.
Dr. Andy Chiou on healthcare:
Jim McConoughey on healthcare:
Paul Macek on healthcare:
February 3, 2009