As Job Vacancies Rise, Hospital Financials Plummet – Twin Cities Business Magazine

The Minnesota Hospital Association (MHA) is calling for legislative aid after a report showed the state hospital’s overall bottom line has dipped into the red as the ongoing worker shortage has tripled. 
Data from a 2022 MHA Workforce Report based on a statewide analysis of MHA members – which includes Minnesota’s large health systems, along with rural hospitals – shows job vacancy rates in health systems have tripled year over year. At the same time the median hospital and health system operating margin for the first and second quarter of 2022 was -1.5% versus 2.2% in 2021, a 172% drop year over year.
It’s no mistake that the recent report was broken into these two major pieces: The growing worker shortage and declining hospital financials, said Dr. Rahul Koranne, MHA president and CEO.  
“It shows the increasing difficulties and the crisis with the shortage of healthcare staff is compounding and compounded by the very difficult finances in the financials of the hospital,” the CEO and long-time physician said. “We’ve called it a perfect storm already because the shortage of workers is at an unprecedented level and growing every day, but also the hospitals and health systems not having a positive bottom line means they aren’t able to solve it themselves. So external help is going to be needed from our state lawmakers and our federal lawmakers so that we can prevent lack of access to services.”
In part, the operations and finances of Minnesota’s hospital and health systems are being additionally strained by retirements. This follows a national trend. A report by the Association of American Medical Colleges shows that more than two of every five active physicians in the U.S. will be 65 or older within the next decade.  
But one part of employment numbers is new, Koranne said. For the first time ever, more than half of registered nurses are not working full-time. With 57% of nurses working part-time, hospitals have had to fill some gaps with contract workers. 
“Obviously the healthcare organizations, hospitals, and healthcare systems want to embrace their workers,” he said. “We’re proud to offer that… However, the hospitals are full-time entities. We are here 365 days a year – doesn’t matter if it’s a holiday or weekend, midnight – and so that does put additional strain on making sure that the care team is available when a child has a mental health crisis or a farmer has a farming accident or a motor vehicle driver, unfortunately, has a car crash on wintery roads or somebody has a heart attack or stroke you know, that is straining that availability of the healthcare team there at the hospital.” 
It’s difficult to break down hospital financials without getting lost in complexities, Koranne said. But, he adds, the bottom line is “the math doesn’t add up.” The rate charged for procedures is set by the government for 61% of patients in Minnesota hospitals, he said. This percentage accounts for patients with Medicare with rates set through the Federal government, or Medicaid through the state. The rate set through these programs is 20 to 27% below cost. 
“It’s not like we (hospitals) can just raise prices in healthcare,” he said. “In that way, we are different than other industries.” 
MHA is advocating for the following:

Winter Keefer is associate editor at Twin Cities Business.
MSP Communications, 953 Westgate Drive, Suite 107, St. Paul, MN, 55114 © 2022 Key Enterprises LLC All rights reserved.
Website by Web Publisher PRO


Leave a Comment