The MHA received media coverage the week of May 1 on the economic impact of healthcare in Michigan and planned state legislation that would require nurse-to-patient staffing ratios in hospitals.
Crain’s Grand Rapids Business published an article May 4 on the 2023 release of the Economic Impact of Healthcare in Michigan report. The report demonstrates healthcare remains Michigan’s largest private-sector employer, providing nearly 568,000 direct jobs, including 219,000 in hospitals. The report shares fiscal year 2021 data, displaying the impact the pandemic had on healthcare and employment. A survey of Michigan hospitals in March 2023 showed more than 27,000 job openings in Michigan hospitals.
“Our hospitals are trying to fill those slots and many of those are nursing. So, that opportunity to bring more people into health care, it’s there today and it’s going to increase going forward,” said Peters. “We’re an economic engine that hires a lot of people and we need even more based on the environment that we’re experiencing right now.”
WLNS-TV also aired a story May 3 on planned legislation supported by the Michigan Nurses Association that would mandate nurse-to-patient staffing ratios. MHA CEO Brian Peters spoke with WLNS to explain how detrimental a mandated one-size-fits-all approach would be to Michigan hospitals, health systems and the availability of care for patients. Peters emphasized the need for hospitals to have local control to determine staffing models that best represent the needs of their patients and communities. He also provided solutions the MHA and member hospitals and health systems are implementing to address the nearly 8,500 opening nursing positions in Michigan hospitals and to retain existing nurses.
“Our chief nursing officers are really in the best position to make those decisions, a one-size fits all mandated approach, certainly does not give us that flexibility,” said Peters. “This would only add fuel to that fire and really threaten that viability of our hospitals throughout the state of Michigan.”
Becker’s Hospital Review published an article May 5 on each of these issues.
Provides Nearly 568,000 Direct Jobs, 219,000 in Hospitals Alone
The Partnership for Michigan’s Health reports healthcare directly employed nearly 568,000 Michigan residents in 2021, demonstrating that healthcare remains the largest private-sector employer in the state despite continued staffing losses attributed to the COVID-19 pandemic. The 2023 release of The Economic Impact of Healthcare in Michigan shows direct healthcare workers in Michigan earned nearly $46 billion that year in wages, salaries and benefits. Hospitals alone employed 219,000 individuals in the state in 2021.
Direct healthcare employment helps create additional jobs that are indirectly related to or induced by healthcare. These indirect, healthcare-supported jobs are held by more than 470,000 people who earned about $28 billion in 2021 in wages, salaries and benefits. Together with their employers, the more than one million workers in healthcare contributed $19.6 billion that year in local, state and federal taxes. These taxes include Social Security, income, motor vehicle, sales, property, corporate and more.
Data from 2021 shows the impact the pandemic had on the healthcare workforce in Michigan. While direct jobs decreased by nearly 4,000 total positions, direct wages increased by 4% year-over-year as labor costs rose due to increased demand. Direct wages in hospitals increased by 6.8%, as many hospitals offered wage adjustments and bonuses to recruit and retain employees, and increased the use of contract labor with staffing agencies. A separate study conducted by the MHA in 2022 showed expenses related to contract labor and recruitment and retention bonuses increased by $516 million from 2020 to 2021. Nursing and Residential Care also experienced a similar trend, as the number of jobs in the category fell by about 8,000 but compensation remained about the same.
The increase in direct wages for hospital employees follows a national trend. A recent American Hospital Association report shows labor costs increased 20.8% between 2019 and 2022. The increase is due in large part to a greater reliance on contract staffing agencies due to staffing challenges and to meet patient demand. Increased labor expenses have a more profound impact on hospitals and health systems, as labor expenses account for more than 50% of total expenses for most hospitals. In addition, healthcare reimbursement is unable to quickly respond to inflationary pressures since rates with commercial payers are negotiated months in advance while Medicare and Medicaid rates are even slower to adjust, presenting additional financial challenges when responding to sudden labor market demand.
The loss of healthcare workers has also had a detrimental impact on physician practices. According to a survey conducted by the Michigan State Medical Society, 86% of participating physician practices experienced a decline in the number of health professionals and administrative staff employed by the practice since the start of the COVID-19 pandemic, including physician assistants, nurse practitioners, registered nurses and medical assistants. In addition, 69% reported staffing shortages led to increased wait times for patients, 55% had to reduce hours or available appointments and 43% experienced an estimated 10-25% reduction in patient revenue.
The report was compiled by the Partnership for Michigan’s Health, which consists of the Michigan Health & Hospital Association, the Michigan State Medical Society and the Michigan Osteopathic Association, all based in the greater Lansing area. It uses 2021 data, which is the most recent available.
“Hospitals rely on many workers in a variety of clinical and non-clinical roles to operate every hour of the day, year-round.,” said Michigan Health & Hospital Association CEO Brian Peters. “This report demonstrates the significant number of people it takes to have a high-quality, functioning healthcare system available to all Michiganders.”
“Healthcare is a key driver of not only physical health, but the economic wellness of Michigan,” said Kris Nicholoff, executive director of the Michigan Osteopathic Association. “The Economic Impact of Healthcare in Michigan shows the extensive value healthcare provides to our state, both as an employer and in providing tax revenue for communities.”
“The same dynamics that are at play in our hospitals affect Michigan’s physician practices, which are also struggling to recruit and maintain physicians and ancillary staff,” said Tom George, MD, Interim Chief Executive Officer of the Michigan State Medical Society. “We encourage students to consider pursuing a profession in healthcare, which offers rewarding and stable careers across a variety of disciplines.”
Demand for healthcare careers remains high. A March survey of Michigan hospitals reported more than 27,000 current job openings, including nearly 8,500 open nursing positions, 4,500 technician openings and 3,000 positions for clinical assistants from the 95% of the MHA membership who participated. The need for healthcare workers is not unique to hospitals, and is shared by physician practices, nursing and residential care facilities, home health services, ambulatory services and other healthcare organizations.
The 18th edition of The Economic Impact of Healthcare in Michigan was compiled using IMPLAN® cloud software to quantify healthcare’s significant economic impact in the state. The data represents direct, indirect[1] and induced[2] healthcare jobs; taxes paid by those workers and their employers; and salaries, wages and benefits earned. The report is an online, interactive tool that allows users to examine these economic impacts from a statewide perspective and by region, county or congressional district. It is available at www.economicimpact.org.
[1] Indirect jobs are those created to support a larger employer or industry (for example, a laundry that cleans linens for a hospital).
[2] Induced jobs are those created by the spending of people who work in the indirect jobs (for example, a restaurant waiter who serves the laundry workers).
“Individual commitment to a group effort – that is what makes a team work, a company work, a society work, a civilization work.”— Vince Lombardi
Talent acquisition is always top of mind for all business leaders. Demand for workers now outpaces supply throughout the U.S., but particularly here in Michigan due to our demographic realities, including an aging baby-boom generation entering retirement in significant numbers. A recent presentation by Michigan Senate Fiscal Agency Chief Economist David Zin summarizes these challenges, as Michigan has the eleventh highest median age in the country, a metric which has been increasing rapidly in recent years.
This challenge is clearly felt by Michigan hospitals and health systems, as many retirement decisions made by healthcare workers accelerated during and because of the pandemic. The use of contract agencies for nurses exploded while hospitals also reduced the number of staffed beds in their facilities due to worker shortages. The financial repercussions of these shortages had Michigan hospitals spending more than $1 billion more on contract labor and recruitment and retention expenses in 2022 than in 2020, according to a MHA workforce report.
Although current staffing levels have stabilized somewhat in the state, the demand remains high. According to a March 2023 survey of 95% of the MHA membership, there were over 27,000 job openings in Michigan hospitals, including nearly 8,500 open nursing positions.
While the number of open positions may be surprising, healthcare is historically the largest private-sector employer in Michigan. The next iteration of the Economic Impact of Healthcare in Michigan report publishes May 2, which demonstrates the massive role healthcare plays in the state. Michigan healthcare organizations provided nearly 568,000 direct healthcare jobs in fiscal year 2021, with Michigan hospitals providing roughly 219,000 – or nearly 40% – of those jobs. Once wages, salaries and benefits and tax revenue are factored in, healthcare contributes nearly $100 billion to the state’s economy each year.
The value that our hospitals provide to the health and wellness of a community is obvious and is reason enough to warrant our strong support. But in addition, the magnitude to which our Michigan economy depends on healthcare can easily be overlooked. Hospitals are often the largest employer in their respective communities and serve as critical lynchpins of economic vibrancy. This is why it is so important for hospitals to engage with business and policy leaders to ensure alignment across the state in our efforts to attract and retain talent.
Healthcare careers are not only stable and well compensated, but also provide a set of transferrable skills which rarely become obsolete. We recognize that healthcare careers, particularly clinical positions, can be stressful and emotionally draining. We can’t sugarcoat the challenges associated with caring for all types of patients in organizations that operate 24/7/365.
But the MHA is here to help. In an effort to support the emotional well-being of healthcare workers, in 2021 the MHA Keystone Center launched a partnership with the Duke Center for Healthcare Safety and Quality team led by Bryan Sexton, PhD. More than 5,000 clinical and non-clinical staff from 144 organizations joined in the first 10-week Well-being Essentials for Learning Life-Balance cohort, and our work here is ongoing. We are also advocating for policy change at the state and federal level that would increase the penalties for those who commit acts of violence against our caregivers.
Through our successful advocacy work, the Michigan Legislature appropriated $75 million in funding for the recruitment, retention and training of hospital workers in Public Act 5 of 2023. This funding supplements an earlier $225 million appropriation made in Public Act 9 of 2022 and has played a large part in minimizing further losses to the healthcare workforce. The MHA was named as the fiduciary for both of these funding pools – evidence of the strong bipartisan trust in our association.
Allowing clinicians to work at the top of their license and removing administrative work is another tactic that can help attract healthcare talent. Enacting policy change that reduces rates of healthcare worker violence and expands access to behavioral health treatment are others. The work of the MHA and our members is to make sure healthcare workers have all the tools available to do their work improving and saving lives without unnecessary mandates and other interference that contributes to the challenges healthcare professionals experience.
These workforce challenges and the need for more workers also illustrates the need for local control for hospitals to determine staffing models that best represent the needs of their patients and communities. A one-size-fits-all approach doesn’t work when comparing a rural critical access hospital to an urban Level I trauma center. Successful staffing models incorporate input and feedback from nursing teams and the unique needs of the local community.
There are also a variety of other approaches the MHA and our partners at the American Hospital Association are advocating for to attract healthcare talent. This ranges from increased investment in nursing schools, nurse faculty salaries and hospital training time; enacting protections for healthcare workers against violence and intimidation; supporting apprenticeship programs for nursing assistants; and supporting expedition of visas for foreign-trained nurses.
There is no silver bullet that will fix workforce shortages. The current issue facing hospitals, as well as many other industries, is the reality that the available supply of workers simply doesn’t meet the demand. Michigan continues to be aggressive in efforts to attract businesses to the state. We must recognize our state is in competition with others for a finite amount of available healthcare workers.
Yet things can be done to grow the pie and attract more students into the healthcare talent pipeline. For example, the MHA will be focused this summer on raising awareness about the variety of jobs and career pathways that exist within health systems, and encouraging future and existing workers to consider a career in healthcare where they can truly change lives, whether they’re at the bedside or behind a computer screen.
Healthcare is the ultimate team sport, with the utmost objective – saving lives, and preserving the health and welfare of people. I hope you will join us in this endeavor and invite as many people as you can to the party.
“Life’s most persistent and urgent question is, ‘What are you doing for others?” ― Martin Luther King, Jr.
Fall is officially upon us. At the MHA, that means a new program year is well underway, we have a new Strategic Action Plan in place and are preparing for the November election which is now just weeks away. This fall, we are also very proud to continue an annual tradition and publish two new reports documenting the critical role of our membership throughout the state: the 2022 Economic Impact of Healthcare in Michigan and the Healthy Futures, Health Communities community benefit report.
Fiscal year 2020 data (the most recently available) is shared in each report and it reinforces the position that hospitals are both economic drivers and community leaders. Healthcare remains the largest private sector employer in Michigan with nearly 572,000 total individuals directly employed, 224,000 of which are in hospitals. These direct healthcare workers earned $44.2 billion in wages, salaries and benefits and when combined with indirect, healthcare-supported jobs, contributed almost $15.2 billion in local, state and federal taxes. Hospitals provide mission-oriented work aimed at the health and wellness of their patients and communities, but the data is clear that hospitals clearly have a role in the economic health of our state as well.
We take our work towards improving community wellness seriously, which is demonstrated by the nearly $4.2 billion investment in community-based partnerships and programming. Hospitals invested more than $869 million in community and voluntary-based activities while providing $3.4 billion in uncompensated care. Hospitals are committed to not only caring for anyone who walks through their doors, but towards preventative care programs that can help reduce the need of inpatient hospital services. The costs of these efforts come directly out of a hospital’s bottom line but are vital towards ensuring vulnerable patients have the ability to receive needed care.
These reports are based on data from the first year of the pandemic. I do not have to tell you how trying and difficult those times were for hospitals. Despite the uncertainty and demand on hospitals and health systems during that time, they continued to support our communities in these important ways. Our healthcare system was stretched to new lengths, but we had over half a million individuals directly involved in providing care to patients. With a statewide population of 10 million, 40% of which are either under the age of 18 or aged 65 and older, healthcare either directly or indirectly employs over 18% of our workforce.
Yet the 2020 numbers also begin to provide evidence of the loss of healthcare workers that we anecdotally have shared for the last several years. For the first time in the history of the economic impact report, total direct jobs in Michigan from healthcare declined, including the loss of 7,000 jobs in hospitals. Despite those losses, total compensation for hospital workers remained the same, as contracted labor (e.g. those working for nurse staffing agencies) became a necessity for hospitals to maintain appropriate staffing levels.
But I do not want to lose sight of what the headline should be, and that is healthcare remains an economic engine and the largest private-sector employer in Michigan. At a time where every industry is struggling with having enough staff, healthcare remains a very significant employer. And the industry holds a tremendous amount of opportunity for new job growth moving forward: Michigan’s recent list of the top career fields with the highest projected growth is dominated by healthcare professions. Hospitals not only offer well-compensated careers with strong benefits, but in a rewarding field that truly makes a difference in the lives of our neighbors. Hospital careers also exist in communities large and small, helping to keep college graduates and young professionals in our state. Lastly, the skills of a healthcare professional are transferrable, regardless of region, and long-lasting. The training and education for a healthcare professional today will remain relevant over the next several decades.
Every year that goes by, hospitals seek to be more involved with individuals outside the walls of their facilities. They are helping to address the social determinants of health, including access to transportation and food insecurity. And they are intertwined in not only the individual health of community members, but in the success of local business and municipalities. Access to healthcare is at the top of any organization’s checklist wishing to expand their footprint into new markets. Our success depends on the success of community leaders and vice versa.
When we advocate for much-needed Medicaid and Medicare funding, for the 340B drug pricing program and for good health policy at the state and federal level, we do so because we know these are essential to maintaining access to quality healthcare in communities throughout Michigan. With the facts presented by our new reports on economic impact and community benefit, we believe there is more reason than ever for our elected officials – and all of us – to support our Michigan hospitals.
The MHA received media coverage on several topics during the week of Sept. 12. Areas of focus included the Economic Impact of Healthcare in Michigan report and the new national rural emergency hospital (REH) designation.
MHA CEO Brian Peters was a guest on the MIRS Monday podcast Sept. 12, discussing the findings of the Economic Impact of Healthcare in Michigan report, while discussing a variety of other challenges impacting the healthcare industry and potential legislative or policy solutions. Also appearing in the episode was Republican gubernatorial candidate Tudor Dixon and former Gov. Gretchen Whitmer aide Mark Burton.
The Lansing State Journal also covered the Economic Impact of Healthcare in Michigan report in an article published Sept. 14 that looked at emergency department wait times and staffing shortages. The article referenced data from the report on the sudden loss of healthcare workers in 2020 as a result of the pandemic and how that has led Michigan to have an average of 1,700 fewer staffed beds in Michigan hospitals compared to October of 2020.
Crain’s Detroit Business also published a story Sept. 15 on Sturgis Hospital pursuing the new REH designation. Peters is quoted at the end of the article discussing why hospitals may consider adoption the new designation.
“This is about keeping the doors open,” said Peters. “Telemedicine is a potential game changer for these struggling hospitals. Prenatal visits are critically important, but if you’re in a community where you used to have a full-service OBGYN clinic and now you don’t, a robust telemedicine offering can bridge that gap. This will allow health care leaders to not feel they are abandoning their mission while remaining open.”
The MHA responded to several media requests the weeks of Aug. 28 and Sept. 5 which focused on the public release of the Economic Impact of Healthcare in Michigan report and other workforce issues.
Brian Peters speaks with the Michigan Business Network.
Below is a collection of headlines from around the state that include interviews or statements from MHA representatives.
