LANSING, Mich. (Michigan News Source) – Lansing-based Sparrow Health System announced on Thursday in a press release that it will layoff several hundred workers after having a $90 million net operating loss during
the first six months of the year.

Their statement says “Expenses have risen across all categories, including supplies and salaries, wages and benefits, while patient volumes have declined and the cost of contracting agency labor has skyrocketed.”

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They say that while the COVID-19 pandemic may clinically be over, it has “caused a financial pandemic for the nation’s healthcare providers.”

As a result, they are “implementing staff reductions that impact several hundred roles at the health system. Many reductions are targeted at leadership and non-patient care roles but will also include the elimination of clinical jobs in areas where volumes are down and are projected to remain down.”

The statement continues, “Salaries, wages, and benefits have increased 35% compared to 2019 due to the nationwide labor shortages that have created staffing challenges.

These shortages have resulted in increased use of agency nurses to meet the needs of our patients. Our cost of contracted labor in fiscal year 2022 is projected to be $50 million.”

Corey Alexander, Sr. Media Relations Specialist at Sparrow Health System, is not unable to comment further outside of the statement so it is unknown when the layoffs will occur or at what locations.

The Professional Employee Council of Sparrow Hospital-Michigan Nurses Association says that some of the cuts will affect nurses and healthcare professionals in their union and they are waiting to see how Sparrow plans to address their already worsening staff crisis while laying off caregivers. They’re concerned about the impact the cuts will have
on patient care and the community.

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Meanwhile, their “careers” website page says that they have 206 job openings, many of them very important positions including medical assistants, oncology positions, RNs, cardiac sonographer and more.

Fierce Healthcare, a healthcare news website for business and policy, says that “The hospital and health system in 2022 is dominated by warnings of major financial losses, often attributed in part to the rising cost of labor. A nursing shortage and the winter’s omicron surge forced many provider organizations to turn to contract workers demanding rates far beyond those seen prior to the pandemic.”

There has been an enormous strain put on Sparrow’s emergency department due to staff shortages. In an Op-ed in the City Pulse, Daniel Gollapalli describes the problem that many are experiencing in hospitals in Lansing hospitals. He says, “The wait times in the emergency rooms at Lansing area hospitals are unacceptable. Since the Covid
pandemic, there has been an increase in the length of time that it takes for patients to be seen by providers…The hospitals in the Lansing area must provide increased nursing staff to their ERs. They must also hike the pay of the local nurse positions so that the nurses will not relocate elsewhere….the hospitals need to act quickly before it’s
too late.”

ER visits can go on for hours because patients aren’t seen on a first-come-first-serve basis. They are prioritized according to their condition. Then when they are seen, waiting for results from additional services such as urine tests, blood tests and ultrasounds can add on a few more hours.

IT service automation company SysAid had a report in February that said the shortest average time patients spent in the ER in Michigan from January 7th, 2020 to March 31, 2021 was about 2.5 hours. They ranked Michigan 34th in the country when the wait times were listed shortest to longest.

Sparrow has offered some alternative care option for patients in the Lansing area including their virtual care strategy and the September opening of the 24-hour Emergency Center in Okemos.

Due to the pandemic, Sparrow rolled out their virtual care option sooner than they planned with their first virtual visit happening on March 27th of 2020. Their services are provided both by telephone and virtual.

In Okemos, Sparrow has opened their first freestanding emergency center. The $20 million project is 12K square foot facility and has 11 exam rooms as well as CT scan, Xray and ultrasound equipment with MRI imaging coming in the future.