The number of health care jobs in Michigan declined in the first year of the COVID-19 pandemic, worsening an existing staffing shortage that — if not reversed — could eventually affect access to care.
A trio of health care associations today released the data in an economic impact report. The findings confirm anecdotal information from the last two years about how the pandemic led thousands of workers to leave through retirement or for another profession because of stress and burnout.
“We’ve seen a lot of folks, both clinical and non-clinical, leave the hospital setting for a variety of reasons. (For) many of them (it is) simply the demographic reality starting to confront us and those who are at retirement age starting to move into retirement. But frankly, a lot of folks are leaving health care altogether to go into other opportunities in other sectors,” said Brian Peters, CEO of the Lansing-based Michigan Health & Hospital Association (MHA).
The MHA published the report with the Michigan State Medical Society and the Michigan Osteopathic Association.
“Access to care ultimately is what we care the most about and what we really concern ourselves with because at some point — when you don’t have staff, you can have as many beds, as much high-tech equipment, and as many other resources as possible — when you don’t have people … there’s going to be an impact to access to care. That’s what we really want to keep an eye on and why we’re working so hard to fill those open positions in health care today.”
By the numbers
The economic impact report, the first in two years, shows that health care directly employed 571,890 people in clinical and non-clinical positions in Michigan in 2020, a decline of more than 27,000 jobs from 2019. The industry indirectly supported another 502,412 jobs in 2020, which was down by more than 56,000 jobs from a year earlier.
“Health care careers are not only extremely rewarding, but crucial to our society,” Kris Nicholoff, executive director of the Michigan Osteopathic Association, said in a statement. “While health care careers remain in high demand, the data shows there are over a million individuals we owe our gratitude toward for providing care during one of the most trying and tumultuous years in modern history.”
The data in the report track with reports from member hospitals. It also represents the first time in the nearly two decades of the organizations doing the report that it showed year-to-year declines in employment, Peters said.
Nationally, data show that 1.7 million health care workers left their positions between December 2021 and March 2022, according to an analysis on the Michigan health care market by Minneapolis-based health care consultant Allan Baumgarten. More than a quarter of those individuals left the profession because of burnout, Baumgarten reported.
Despite the reduction in jobs nationally and in the state, health care remains an “economic engine” and the largest private-sector employer in Michigan, Peters said.
“In a time where a lot of folks have left employment, and there’s ‘help wanted’ signs in front of just about every business, we continue to be a very significant employer,” said Peters, who hopes a younger generation will begin looking more at health care careers as the pandemic continues to wane.
The industry holds “a lot of new opportunity for new job growth in health care going forward,” he said.
In February, state lawmakers and Gov. Gretchen Whitmer back allocated $300 million to help address the health care worker shortage, including grants for professionals who want to upgrade their skills and advance their career. Peters hopes another supplemental spending bill that may come out of the Legislature later this year will direct more to the problem.
Financially, compensation for direct health care jobs in the state in 2020 totaled nearly $44.2 billion, compared to $44.5 billion in 2019. Jobs supported indirectly by Michigan’s health care industry paid just below $23 billion, off by more than $1.4 billion.
The declines in compensation reflect the smaller health care workforce that has caused Michigan hospitals to staff 1,700 fewer inpatient beds than before the pandemic, according to the MHA.
As the health care labor force tightened, many health systems implemented higher wages and sign-on and retention bonuses, particularly for nursing staff. In nursing and residential care, for example, hospitals paid $200 million more in compensation in 2020 than 2019, despite employing 11,000 fewer people in those care settings, according to the MHA.
As well, hospitals have increasingly used temporary nursing agencies to fill gaps charged high fees, Peters said. The use of contract labor from temporary nursing agencies remains “on the rise and is at a level that we’ve never seen before in Michigan,” he said. Some hospitals report paying as much as $250 an hour for nurses.
“As a result, the cost of labor has absolutely skyrocketed, and that is an unsustainable dynamic,” though use and rates have begun to moderate in recent weeks, Peters said. “But still they are at levels that are far too high to be sustainable.”
Nationwide, an American Hospital Association analysis shows labor costs increased 19.1 percent from 2019 to 2020 and costs for supplies increased 20.6 percent.
In Michigan in 2020, hospitals paid about $200 million more than the prior year for nursing and residential care staff as the COVID-19 pandemic gripped the state, despite employing 7,000 fewer people in those two areas.