Year in Review

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Augustine

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Within Pennsylvania’s northeastern metro outpost of “eds and meds,” an illuminating lineup of trends unfolded during 2017 within the sectors of education, medicine, and of course, business.

The Institute for Public Policy & Economic Development painted an enlightening picture of the regional economy with data from its most recent studies. According to the findings, and as opposed to many local beliefs, NEPA was not an exceptionally cheap place to live during 2017.

The Scranton area’s overall cost of living was 101 percent of the national average, with Wilkes-Barre logging a 103 percent average above the national norm. Regional housing and grocery costs were also comparable to national averages.

Within the housing arena, median home prices in the region did remain below the statewide and national averages. For Lackawanna County minimal changes have occurred in median home price since 2011, but within Luzerne County the median price came in higher than 2011 but still slightly below the 2013 peak.

One big cost factor with a significant difference from the national average is health care. The regional health care cost index, overall, remains lower than the national average.

NEPA is witnessing some changes to its historically parochial population. The Institute has indicated that states responsible for adding population to Lackawanna and Luzerne counties now include New Jersey, New York and West Virginia. Puerto Rico actually ranked among the top ten donor locales for Lackawanna County.

However, the “brain drain” of youth with vital job skills and intellectual power away from NEPA is continuing. The Institute’s poll of regional college students, with questions on their post-graduation plans, has revealed that only 28 percent indicated that they planned to seek employment within NEPA after graduation.

EDS ACTION

NEPA’s educational community, one of the region’s most powerful economic sectors, dealt with mounting limits to the number of 18-year-olds available for enrollment during 2017. Thomas Botzman, Ph.D., president of Misericordia University, also noted that a seemingly constant investment in brick-and-mortar has been ongoing within NEPA’s many collegiate campuses, but this trend must inevitably ebb.

In the case of Misericordia, evolution of the student body has also occurred. A full 46 percent of the student base is now enrolled within some sort of health care curriculum, thereby matching these students to job availability when they graduate.

New programs offered by Misericordia include a doctorate degree in occupational therapy, plus respiratory therapy in partnership with Luzerne County Community College. Overall, an educational commitment has also been made to teach inter-disciplinary medicine that emphasizes prevention, genomics, IT and patient navigation for modern integrated care.

Dr. Botzman reported that the infamous 2008 financial crash and subsequent Great Recession crushed American labor mobility, but during the past decade the economy has rebounded and created the best job market for graduates since the recession began. Further educational evolution has allowed online courses to become a gateway to traditional campus attendance, and two-year skilled trade educations now include the humanities, communication and critical thinking.

“A problem we are now being forced to address involves the perception of value for a four-year degree,” said Dr. Botzman. “This involves the student value proposition and the true value of education. Add in government funding cuts for education, changing demographics and shifts in technology, and educators are facing many ongoing challenges.”

Several process changes involving enrollment numbers occurred within collegiate education during 2017, with the capacity to create big regional changes, according to Gerald Zaboski, vice provost for enrollment management and external affairs at the University of Scranton. One of these involves the Free Application for Financial Aid (FASFA) process.

FASFA has traditionally used tax data from the potential student’s prior year, creating a situation where the collegiate applicant had to wait till year end and taxes were compiled to apply for admission. This crazed process gave rise to a mad application rush.

Now, FASFA uses applicant tax data from the prior year, allowing a more thorough and relaxed collegiate applicant process. This is generating better school-to-applicant communication and granting more time for colleges to analyze the applications in the interest of being as generous with financial aid as possible.

“There’s no way to know how much financial aid an applicant will receive until they actually apply for admission,” said Zaboski. “This refined FASFA process is creating less time pressure on families, and allowing more time for their questions to be answered.”

SAT scoring changes, which began to transition during 2017, now include free preparation testing, no penalty for wrong answers, a revamped essay section and a focus on evidence-focused approach. These unfolded as limits firmly appeared in the number of 18-year-olds seeking enrollment within four-year educational programs.  

As Zaboski and his collegiate recruiting colleagues looked northward for student recruitment, they developed concern courtesy of the New York Excelsior Scholarship. This new system, which began in the fall of 2017, will be phased in over three years and provide more than 940,000 middle-class families and individuals, with incomes up to $125,000 per year, the potential for free college tuition at select two-year and four-year colleges within the Empire State.

“This new funding stream within New York is bound to affect the very competitive arena for NEPA school recruitment,” said Zaboski. “All of the colleges here may be hurt.”

Zaboski added that NEPA’s colleges are playing a major role in the ongoing mission of educating home-grown talent, and then keeping it within the region for employment. An effective internship network has been created with multiple colleges, and data is indicating some collegiate alumni do return to NEPA due to quality of life issues.

MEDS GROWTH

NEPA’s largest overall economic sector, it’s health care delivery system, continued to change during 2017 to meet the needs of the region’s population, as well as an ongoing influx of baby boomers, high technology and financial pressures.

For example, the Commonwealth Health System, which is now firmly entrenched within NEPA, launched a free online tool aimed at helping people discover their “real” heart age. According to Commonwealth, the outreach offers a quick assessment with questions about smoking habits, blood pressure, cholesterol levels and diabetes.

After completion, participants receive an email with their risk results rated. In addition, they have access to tips about how to decrease the risks of cardiac disease.

To battle NEPA’s sinister opioid use crisis, the Geisinger Health System opened a Medication Assisted Treatment Addiction Clinic at the Geisinger South Wilkes-Barre Campus during September. The treatment approach emphasizes medication and behavioral health therapy to treat addiction like a chronic disease.

Outreach programs for NEPA’s broad elderly population also continued during 2017. The Institute for Public Policy & Economic Development, with funding from the Moses Taylor Foundation, began a study launched by the Lackawanna County Area Agency on Aging focusing on a needs assessment for seniors, future seniors, and family caregivers within the county.

Within NEPA’s larger health care stage, ongoing brick and mortar plus technology investment was the theme during 2017, according to William Dempsey, MD, family medicine practitioner with The Wright Center for Primary Care. He observed that regional teams of medical specialists are still in short supply because the needed investment dollars are not available, but NEPA’s marriage of “eds and meds” has increased overall quality of care while increasing opportunities for research and solidifying vital system cogs such as the Geisinger Commonwealth School of Medicine.

Dr. Dempsey also reported that during 2017 physician financial stress increased. He observed higher levels of burnout due to organizational pressures with finances, and frowned upon system participants who may have yielded to the business strategy of dollars becoming more important than care.

The fundamental question of prioritizing investment dollars for brick and mortar versus human talent caused Dr. Dempsey and his colleagues great discomfort during 2017. He declared it hard to see a white physician’s coat transform into a business suit

“We also watched the fighting over the Accountable Care Act, and found it hard to delineate fact from fiction,” said Dr. Dempsey. “There’s lots of false news out there. This has been very tough on physicians, and the insurance companies have become even more powerful.”

BUSINESS PROFITABILITY

From a high-altitude view, NEPA’s business and investment communities appeared to gain ground during 2017. According to data from the Federal Deposit Insurance Corp.’s deposit market share report, banks in the Scranton, Wilkes-Barre and Hazleton metro areas tallied a deposit gain of $662.3 million, representing a six percent increase from 2016 levels.

Gains to the overall business community also were achieved. Billion-dollar Berkshire Hathaway Guard announced a move into the 10-story Wilkes-Barre Center building on Public Square, with the addition of 300 new professional jobs joining the location’s existing 450 positions.

John Augustine, president and CEO of Penn’s Northeast, reported that he has personally witnessed strong and increasing activity within NEPA’s industrial sector during 2017. He cited the example of Chewy.com’s entry into the region bringing 700-plus jobs to the Hanover area for a distribution center, and the relocation of coffee manufacturer SOcafe to Lackawanna County with a business plan to brew up 130 jobs within three years.

“Relocation to NEPA is becoming attractive because of the region’s low operational costs for business, including raw materials, natural gas,and electricity,” said Augustine. “We’re also seeing companies relocate due to high labor costs and shortages in the metro areas, and although underemployment is still a problem within NEPA, the old coal miner image has been shed and industry is learning if they pay just a bit above market value they can have a great NEPA employee.”

According to Augustine, expanding e-commerce and its advancing technologies can be counted upon to continue 2017’s expansion within the NEPA’s business community as more and more companies locate distribution centers within the centrally-located region. The NEPA workforce that will fill these new jobs still needs appropriate levels of education.

“A labor study is always step one for a relocating company, and although I never met a company that didn’t ask about financial incentives, after incentives end the operation is left with specifics of their new location,” said Augustine.

Besides logistics, the specific sectors within NEPA that enjoyed real growth during 2017, according to Augustine, included food, metal fabrication, plastics and office space development. He noted that virtually every building he has observed opening during the past two years is now occupied, and more growth with ongoing change is ahead.

“It’s a fact that 70 percent of American businesses are still owned and operated by baby boomers, so there’s a big coming change with these organizations,” said Augustine. “When you add in the surprising market evolution caused by factors such the recognized value of the Interstate-81 corridor and the tastes of the millennials, such as the demand for downtown apartments, we can be assured that surprising changes are ahead for all of us.”

by Dave Gardner

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