COVID takes bite out of Minnesota health care labor market

The number of people working in health care — Minnesota's largest industry by worker head count — typically grows 2.7% between January and December.

But at the end of 2020, the state had 367,000 employees in its hospitals, nursing homes, doctor's offices and walk-in clinics, a decline of 10,000 since the start of the year, state employment data released Thursday show.

The same pattern held at the national level. The 19.9 million Americans working in health care and social-assistance jobs in December represented a decline of about 780,000 since January, the first such decline in federal labor data going back to 1990.

"It's a paradox in a way, because some areas had an intense uptick in demand, but anything that could be viewed as elective ... dropped in demand a lot. So it really shocked the system," said Anthony Schaffhauser, health care workforce development director at HealthForce Minnesota.

Gov. Tim Walz's March 19 order canceling nonemergency medical and dental procedures statewide, in order to preserve protective equipment and cut transmission rates, was followed by dramatic and immediate workforce cuts in health care, the data show.

At the low point, in April, health care providers in the state had shed about 30,000 jobs — nearly 8% of the 377,000-person workforce that existed three months earlier, with the steepest declines in dental offices and physician practices. After layoffs subsided in early summer, renewed hiring cut the year's net loss to 10,000 jobs.

Financial problems at hospitals and medical clinics that led to job cuts were compounded because many people intentionally avoided care, even in emergencies, and others had their options limited when layoffs ended their health insurance.

But not all the job losses in health care were prompted by employers' dwindling finances. Researchers said it appears, anecdotally so far, that grueling working conditions during the pandemic prompted changes like retirements.

"It's likely a combination of both belt-tightening for group practices and hospitals, and also some doctors and clinicians deciding now might be a good time to make a change," said Hannah Neprash, assistant professor of health economics at the University of Minnesota.

Walz's orders didn't trigger the same across-the-board decline in business at nursing homes. But the pandemic exacerbated existing trends, including sluggish workforce expansion in recent years.

Tetyana Shippee, an associate professor of health policy and management at the U, said nursing homes had turnover rates exceeding 50% before COVID. Wages didn't rise with the pandemic, but staffing gaps meant the workload did — along with the new risk of getting COVID at work.

"I think it's just a toxic combination of factors that makes it completely not surprising that we are seeing these numbers," Shippee said.

On Sunday, new cases and deaths from COVID across Minnesota continued their post-holiday decline.

The state Health Department reported 1,181 newly diagnosed cases of the disease, bringing the total during the pandemic to 454,989. Roughly 3% of the 34,874 diagnostic tests for COVID reported Sunday came back positive.

Complications of the viral respiratory illness led to 32 additional deaths reported Sunday, raising the state's death toll to 6,095. Everyone who died was 55 or older, except for one Hennepin County resident in their mid- to late 30s. The fatalities included one incarcerated person.

As of Sunday, more than 247,000 Minnesotans had gotten their first dose of either the Pfizer or Moderna vaccines, and about 63,000 completed the two-dose course. At the state's nine community vaccination sites, more than 13,000 educators, child-care providers and residents 65 and older had gotten the shot by appointment.

State data show that 1,250 health care workers have tested positive for COVID following 13,040 high-risk exposures to patients, residents, co-workers and family members. Twenty-seven of them died after getting COVID.

During the pandemic, and particularly last spring, thousands of hospital and clinic workers in Minnesota faced the simultaneous threats of being laid off or catching a deadly disease at work.

Those in nursing homes were at little risk of being laid off, but their workloads skyrocketed despite acute shortages of personal protective equipment.

Schaffhauser said it's not an overstatement to say health care workers' efforts during the pandemic have been heroic.

"Not only are they risking getting infected if they are in direct care, but everybody in these organizations has been largely repurposed and refocused to serve the needs. So there are a lot of changes in addition to the risk," he said.

Hospitals ended 2020 with 1,800 fewer workers than they started with, while employees at doctor's offices were down by about 3,900. Dental offices lost nearly 1,000 employees, 6% of the state dental workforce — the largest percentage impact in health care.

Studies show that lower levels of staffing can be associated with worse outcomes for patients.

Registered nurse Carrie Mortrud, nurse staffing specialist at the Minnesota Nurses Association, said health workers play critical roles in looking for subtle signs of problems, like changes in patients' skin color, breathing or emotional state. Having more patients per shift reduces the time spent with each one.

"We don't catch everything all the time," Mortrud said, but problems tend to be caught earlier "when physicians and nurses and respiratory therapists and nursing assistants have the time to actually look at patients, talk to them, get a feel for how their night went."

Despite the job losses in 2020, state economic development officials said they were confident Minnesota is on a path to health care job growth. Walz declared January "Health Care Month" in the state to highlight the opportunities in an industry that paid out $25.7 billion in wages in 2019.

The Minnesota Department of Employment and Economic Development says the two jobs most in demand today in any industry are registered nurses and aides in home health and personal care, with median salaries of $79,000 and $29,000, respectively. Nursing assistants also are in the top 10, with salaries of $36,000.

Schaffhauser said HealthForce Minnesota subscribes to a service that monitors job openings, and the magnitude of the number of open positions in Minnesota health care today is similar to what was seen last January.

In the short term, pent-up demand for delayed services drives increased traffic to health care as people regain confidence in seeking care, especially with the rollout of COVID vaccines. In the long term, Minnesota's aging population should create steadily growing demand.

"As things go back to normal, health care will be the top-employing industry in Minnesota, and it's only getting a greater and greater share," Schaffhauser said.

Joe Carlson • 612-673-4779