Crain’s Detroit Business published an op-ed from MHA CEO Brian Peters Sept. 22 on the unsustainable financial strain currently being experienced by Michigan hospitals and health systems. The op-ed was in response to a Sept. 2 Modern Healthcare article detailing the struggles of hospitals nationwide.
Peters describes the untenable situation where hospitals are experiencing skyrocketing costs combined with stagnant and inadequate reimbursement and staffing challenges. Statewide, Michigan has lost approximately 1,700 staffed hospital beds since 2020 due to lack of available staff. Peters also mentioned the many actions the MHA and member hospitals are taking to address these challenges.
“Multiple factors have contributed to the drain on hospital resources: fewer workers, increasingly sicker patients, and higher costs that cannot keep up with inflation,” said Peters. “According to a new American Hospital Association report, the average length of a hospital stay rose almost 10 percent from 2019 to 2021. Compensation for direct jobs in nursing and residential care rose by about $200 million from 2019 to 2020, but the number of jobs fell by about 11,000. Hospital labor expenses per patient also increased 19 percent. Health care reimbursement is unable to quickly respond to inflation since rates are negotiated in advance, presenting additional financial challenges.