Bozeman Health had a problem. Officials in a health system with hospitals and clinics in southwestern Montana had a problem that had been building for months.

We survived the hardest test of the Covid-19 pandemic, but lost employees and paid a premium for traveling workers to fill vacancies. Inflation also pushed up operating costs.

The system, which serves one of the wealthiest and fastest growing regions of the state, was in the red. President and CEO John Hill said the company spent nearly $15 million more this year than he did from January to June. On August 2, Hill announced that Bozeman Health would furlough 28 executive positions and not fill 25 executive positions. The system has about 2,400 employees and an annual budget of about $450 million.

The pandemic has exacerbated long-standing shortages of healthcare workers, hitting large rural states like Montana particularly hard. Costly first aid, including traveling nurses, has increased hospital costs. Staffing shortages are also causing patients to wait longer for treatment and have fewer providers to care for them.

In addition to Montana, hospitals in states such as California, Mississippi, New York and Oregon laid off workers and scaled back services this summer. The health system points to declining numbers of surgeries, high equipment costs, patient conditions and struggling investments. In parallel with these problems, hospitals’ largest expenditure, labor costs, has skyrocketed.

Akin Demehin, Senior Director of Quality and Patient Safety Policy, American Hospital Association, said:

Workers left the healthcare industry in droves during the pandemic, citing low wages and burnout. As a result, hospitals have had to strike an awkward balance between cutting costs while retaining existing employees and taking on key roles.

Bozeman Health chief financial officer Brad Ludford said the system helped short-term workers spend less than $100,000 a month before the pandemic, but increased to $1.2 million a week last fall. says. That number is now approaching $1.4 million per month. Overall, the labor cost for the system is about $20 million per month, an increase of about 12% compared to this time last year.

Hill said the health care system took another step before cutting jobs. He said he has stopped all out-of-state travel, cut executive salaries and rebalanced workloads. At the same time, it converted contract workers to permanent employees and tried to retain existing staff through higher minimum wages. Hill said the hospital system has had some success, but it’s been slow: As of mid-August, Essential had 487 of his worker vacancies.

“It’s not enough yet,” Hill said.

Vicki Byrd, registered nurse and CEO of the Montana Nurses Association, said the nationwide nurse shortage means nurses are being asked to do more with less. I was. She hopes more hospitals will offer longtime employees the kind of incentives they used in hiring, such as giving nurses premium pay for getting extra shifts or bonuses for longevity. increase.

“It’s not just about recruiting. Anyone with a $20,000 bonus can join,” Byrd says. “But how are you going to keep it going for 10, 20 years?”

Financial challenges for hospitals have evolved since the early days of the pandemic, when concerns centered on the cost of COVID-19 response and missed revenue as people delayed other treatments. In 2020, federal aid and a return to more normal service levels saw many of the country’s wealthier hospitals turn a profit.

However, hospital officials say the financial situation has changed in early 2022. Some hospitals were hit hard by the Omcron surge, as well as rising inflation and staffing challenges.

Hospitals received millions of dollars in pandemic relief from the government, but industry insiders say it’s dwindling. Bozeman Health, for example, received approximately $20 million in federal assistance in 2020. Last year she received $2.5 million and in 2022 about $100,000.

John Romley, a health economist and senior fellow at the University of Southern California Shaffer Center for Health Policy and Economics, said some hospitals may now be in the red as federal aid dries up and inflation soars. said to be sexual. But he cautioned that more data is needed to determine how the hospital as a whole is performing compared to past years.

Providence, a healthcare system with 52 hospitals in the West, reported a net operating loss of $510 million in the first three months of the year. In July, Providence announced it would have a “leaner management team.” The system runs Providence St. Patrick’s Hospital in Missoula, one of his largest providers in Montana.

Providence Montana chief operating officer Kirk Bodrovich said hospital leaders are scrutinizing jobs that are not essential to patient care, but that the new structure has not yet impacted local positions. He said the hospital is trying to reduce its reliance on contract workers.

“Recruiting activity is not keeping up with demand,” Bodrovich said.

Nationwide hospital job cuts have forced some health professionals who have stuck to their jobs amid the stress of the pandemic. I had to.

Bay Area Hospital in Coos Bay, Oregon, faced community backlash after announcing that it was terminating the contracts of 56 traveling workers and ending behavioral health services for its inpatients. Hospital officials say filling open positions quickly is costly.

The St. Charles Health System, headquartered in Bend, Oregon, laid off 105 workers and filled 76 vacancies in May. Joe Sluka, the system’s CEO at the time, said in his news release that labor costs had “skyrocketed” largely due to the need to hire contract clinical workers. He said the hospital ended April with a loss of $21.8 million.

“It’s taken us two years in the pandemic to get us into this situation, and it will take at least two years to recover,” Sluka said in a release.

In Montana, Bozeman Health was unable to provide dialysis to inpatients at its largest hospital for months, and patients who needed that service were sent elsewhere. Hill said some delays are expected for non-critical care services, such as lab testing. Ludford said he expects the system to fail later this year.

Shodair Children’s Hospital in Helena, about 100 miles away, has halved its patient intake due to staffing shortages. It’s Montana’s only inpatient psychiatric hospital for children, and he’s building a $66 million facility to expand its bed capacity.

CEO Craig Aasved said the 74-bed hospital scaled back about two years ago instead of adding contract workers. Aasved said he is rushing to open another unit. His Shodair, which has historically not relied on travel workers, has hired four travel workers in recent months, he said.

“This is a double blow: lost revenue due to bed closures plus additional costs for travelers,” says Aasved. “The goal is not layoffs or furloughs, but we can’t stop at what we’ve been doing all along.”

He said the hospital has increased salaries for some employees and started a nurse training program about six months ago to admit new employees. However, these steps did not help immediately.

Wade Johnson, CEO of nearby St. Peter’s Health, said the hospital had closed some of its inpatient units and reduced hours for some services due to staffing shortages. Some beds are not used.

Managers are looking to automate more services. For example, allowing patients to order meals from an iPad rather than from a hospital employee. It also allows us to retain existing staff with more flexible schedules.

“Now that many aspects of our clinical environment have adjusted to life with covid, we are dealing with the impact of how the pandemic has affected our staff and the community at large,” Johnson said.