Sparrow Health System to layoff hundreds of employees

LANSING, Mich. (WILX) – One of Mid-Michigan’s largest employers is laying off hundreds of workers.

Sparrow Health System said it’s making the move because of mounting financial losses. The layoffs will impact dozens of departments and several hundred roles.

Background: Sparrow Hospital announces hundreds of layoffs

Health care systems across the United States have faced severe losses since the pandemic, but Sparrow said just within the first six months of 2022, the health system’s operating loss rose to $90 million.

“It’s really made a difference in the hospital’s financial bottom line,” said Laura Appel. “So, we got behind and we’ve never really been able to catch back up from that.”

Appel, with the Michigan Health and Hospital Association, said health systems are trying to adjust. Hospitals have seen a shortage of nurses and have to raise salaries and pay travel nurse agencies to fill those gaps, but those aren’t the only rising expenses.

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In 2020, the cost of contact workers like travel nurses was $304 million in Michigan. In 2022, those expenses are more than $1 billion.

“And one of the things, when you have a shortage of labor, is you have to do whatever you can to find people who do patient care,” Appel said. “That’s the number one reason hospitals exist is to do patient care.”

Sparrow said salaries and wages and benefits are up 35% since before COVID-19. As the number of patients shrinks and costs go up, hospitals make tough choices.

The Michigan Nurses Association released a statement Thursday that said they are concerned about the impact the layoffs could have on patient care. The union said it wants to hear more from Sparrow on how it will solve the worsening staffing crisis after laying off caregivers.

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