LANSING, Mich. (WLNS) — Sparrow Health System announced Thursday it is laying off several hundred workers.
The health system said the decision was made in-part because of the losses they’ve suffered this year.
In the first six months of 2022, Sparrow said they recorded a net operating loss of $90 million.
“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,” Sparrow said.
In a statement to 6 News, Sparrow said that the COVID-19 pandemic is winding down, but it has caused a ‘financial pandemic for the nation’s healthcare providers.’
“These problems aren’t unique to our system. Most health systems in the country are facing similar challenges including many in Michigan,” Sparrow said.
Many of the jobs being eliminated will be leadership and non-patient care roles but some clinical jobs will also be eliminated, Sparrow said.
The Professional Employee Council of Sparrow Hospital-Michigan Nurses Association has released a statement saying they’re concerned about the decision to eliminate jobs.
“Some of these cuts will affect Professional Employee Council of Sparrow Hospital-Michigan Nurses Association (PECSH-MNA), which represents about 2,200 registered nurses and healthcare professionals. Right now, we are in the process of making sure that our contractual protections are followed and advocating for the best result for each of our members. We are also very concerned about the impact that these cuts could have on patient care and our community. We are using the rights we have as a union to try to mitigate the potential consequences to patient safety as much as possible. The situation is evolving, and we hope to learn more soon from Sparrow about how they plan to address the already worsening staffing crisis while laying off caregivers,” said Kevin Glaza, Vice President of the PECSH-MNA.
Another factor in the decision is the increased costs and wages of hiring, Sparrow said.
“Salaries, wages, and benefits have increased 35% compared to 2019 due to the nationwide labor shortages that have created staffing challenges,” Sparrow said. “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.”
The health system says that they will adapt to the changing world.
Stay with us as we will continue to follow this story.