The health care sector, one of the largest employers in the state, is facing widespread work force shortages. The Citizens League projects that 90 percent of the work force for the next 25 years is already employed. Employing approximately 80,000 full-time equivalent employees, Minnesota’s 140 hospitals struggle with the work force shortages in all areas from clinical care-givers to housekeepers, human resources personnel, and informational technologists.

The Elderly Require More Health Services
The graph below illustrates that as a person ages the likelihood of a hospital visit increases. U.S. Census Bureau estimates the number of people aged 65 and older will increase by 27 percent in the next 15 years and 48 percent in the next 20 years. If hospital visits by age continue as they have, hospitals could see an increase of nearly 80,000 inpatient admissions by 2020.

Source: “Trends in Hospital Utilization by Age Cohort,” MHHP, June 2000.

Health Care Faces Work Force Shortage Crisis
Because of record low unemployment rates, Minnesota is experiencing work force shortages approximately 6 years ahead of other states. Three main factors contribute to Minnesota’s work force shortage: 1) the booming economy has businesses employing a record number of people; 2) baby boomers, the largest group of workers, are beginning to retire; and 3) there is a mismatch of skill levels for employees. According to the Minnesota Department of Economic Security (MDES), health care is expected to be one of the fastest-growing major industries while its work force will drastically decrease.

Additionally the National Center on Health Statistic’s “1998 National Hospital Discharge Survey” reports that within the Midwest Region, hospitals admit 117 patients per 1000 people. Minnesota, however, holds significantly lower averages (103) due to its increased managed care presence. Because Minnesota’s neighboring states’ admission averages are higher, these states presumably require more health care personnel. This suggests future problems of neighboring states recruiting staff from Minnesota thus worsening our health care work force shortage.

Accurate and Timely Work Force Data is Needed
Currently there is no centralized location for general and industry specific work force data; many entities possess valuable data but others are unaware of its existence. Lack of data impedes accurate trend predictions.

Comprehensive Health Care Education is Required
Health education programs are losing students and closing. Enrollment is dropping due to at least four factors: 1) students enrolling in fields other than health care; 2) health education programs are highly expensive to develop and maintain; 3) many faculty are either choosing retirement or making more money practicing instead of instructing; and 4) there is not enough communication and accountability between education and the employment needs of the health care community.

Health Care Work Force Shortage is Unique
Health care is one of the most heavily regulated industries, requiring the majority of personnel to fulfill licensure requirements. Because of these specific skill sets, hospitals are experiencing difficulties recruiting and retaining qualified personnel. Signing bonuses and other recruiting incentives used during worker shortages encourage employees to “job hop” between employers increasing turnover costs. In addition, while other industries are capable of drawing from large pools of unskilled labor, even if the booming economy reverses, health care will still continue to experience a shortage in skilled labor.

Health Care Work Force Shortage Creates Hardship for Public
According to Rate Controls, which perform inflation projections for health care, the inflation rate of wages, salaries and fringe benefits in health care jumped from 3.3 percent in 1998 to 5.6 percent in 1999 with a projected escalation through 2001 of 6.3 percent. These are record rises in compensation compared to pre-work force shortage years. Given the components of the health care work force shortage, the public is likely to experience rising health care costs, longer patient waits and reduced patient access to care.

Action Needed to Alleviate Shortage
Immediate action is needed to address the widespread, long-term health care work force shortage. MHHP is working collaboratively with educational facilities, government agencies, collective bargaining units and other health organizations to seek non-legislative solutions to this epidemic problem. However, to fully address the work force crisis, the Legislature must address such crucial areas as work force data collection, health career education in schools, health career distance learning opportunities, streamline the health care licensure process, exempt government owned hospitals from salary caps, offer small, rural work force grants, update Medicaid reimbursement, replace health care taxes, and emphasize health care within the Governor’s Workforce Development Plan and expand the Summer Health Care Internship Program. Together we can ensure an adequate supply of health professionals to meet the needs of Minnesotans now and in the future.

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