President’s Letter

Health Care Research and Economic Development

The “New Economy” is about the transformation of all industries and the overall economy and it is here to stay, according to a report by the Progressive Policy Institute (PPI).

The New Economy represents a complex array of dramatic changes, including “reorganization of firms, more efficient and dynamic capital markets, more economic churning and entrepreneurial dynamism, relentless globalization, continuing economic competition, and increasingly volatile labor markets.”

Michigan, a traditionally strong manufacturing state, now has only 19.8 percent of its labor force working in this field, but manufacturing remains an important force in bringing in money from outside the region that, in turn, supports local businesses.

The automotive industry is organizing work around advanced manufacturing technology, demonstrated by the Navistar’s Indianapolis plant which, after $285 million in new investment, moved from 900 workers making 175 engines per day in 1994 to 900 workers producing 1,400 engines today.

Health care has organized around technology in its diagnostic and treatment regimens, and now is applying information technology to its business and informational needs. Potential savings to the industry are estimated to be in the 15 to 20 percent range, a substantial amount given that we spend 16 percent of our gross national product on health care, compared to nine percent spent in Japan.

In 2006, the Michigan Public Heath Institute was pleased to provide project management and infrastructure support in the preparation of the report to the Governor – Conduit to Care – a plan developed by 200 volunteers drawn from industry, the provider community, public health, university and insurance experts. Principles of consumer privacy, security and confidentiality guided report preparation which emphasized the need to create strong regional health information organizations serving all of Michigan.

Health care research organizations, like MPHI, are made up largely of those in “knowledge jobs.” In the old economy, our state prospered by having workers who were skilled with their hands and could work in physically demanding occupations. Today’s knowledge workers succeed with their minds, and they are concentrated in managerial, professional, and technical positions. While Michigan ranks 19th out of 50 states in this category with 10 percent of its labor force in knowledge jobs, 70 percent of MPHI’s 200 workers are in this category. And all of these jobs were created since the company’s founding in 1990.

During its 16 year history, MPHI has brought $58 million into the local Mid-Michigan economy from federal, foundation, nonprofit and private resources. With its academic partners at the University of Michigan, Michigan State University, and Wayne State University, we find our health care researchers to be competitive with any in the nation. We are positioned for a bright future.

Jean C. Chabut, President, MPHI Board of Directors
Deputy Director, Public Health Administration, Michigan Department of Community Health