Michigan Hospitals Seek More Help to Address Workforce Shortages
The Michigan Health & Hospital Association, which represents 162 hospitals and 18 health systems, has issued a report on the impact of $225 million in state workforce funding, but also reiterated the need for more help with the workforce shortages hospitals are facing.
Exacerbated by the COVID-19 pandemic, the healthcare workforce shortage is now a crisis, the association said. Michigan hospitals are projected to spend $1 billion more in 2022 than they did prior to the pandemic on contract labor and recruitment and retention expenses. The continued need to temporarily fill shortages through contract labor has led to overall contract labor expenses quadrupling and presents an untenable situation for hospitals and health systems moving forward, the report said.
For example, Sparrow Eaton Hospital’s salaries and wages increased $3.5 million year-over-year, and 63 percent of that growth was due to a contract labor expense of $2.2 million.
The average national registered nurse vacancy rate at hospitals in 2022 is 17 percent, which is significantly higher than the 2021 average of 9.9 percent, according to the 2022 NSI National Health Care Retention and RN Staffing Report.
“Hospitals already operate on razor-thin margins and when 50 percent of overall expenses are related to labor, growth such as this is clearly unsustainable,” the report states. “Due to the discrepancy in available staff, Michigan currently has 1,400 fewer staffed hospitals beds than in October 2020 simply due to a lack of available workers. ”
The report provides a snapshot of the impact the state funding of $225 million in 2022 has already had in just the three months since it was distributed into the field. “Through Public Act 9 of 2022, Michigan’s lawmakers significantly assisted hospitals in reacting to the healthcare workforce crisis and provided stability to the industry. Hospitals experienced improved retention rates and lower total vacancies since funding was received June 2022. Hospitals have used the funding for recruitment, retention and referral bonuses, contract labor, pay scale adjustments for clinical and support staff, education reimbursement and orientation and training.”
The report mentions new partnerships throughout the state between hospitals and post-secondary institutions to improve and expand nursing degrees.
Multiple hospitals are using grant funds to address nursing shortages. Both Pine Rest Christian Mental Health Services and Hillsdale Hospital are offering similar tuition assistance programs for nursing students, while BHSH System has partnered with Oakland University and Grand Valley State University to provide investments that should ultimately lead to 500 additional nursing students in each region.
The association stressed, however, that hospitals are not out of the woods yet. “While extremely valuable, this funding just makes up less than one-quarter of increased yearly labor expenses for hospitals. The data clearly shows we need more help. Efforts must continue to address the needed supply of healthcare workers, essential to providing safe and timely access to patient care across our communities.”
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