Rising pay in other industries blows holes in healthcare's workforce

Beaumont Health has more than 2,600 open positions across its eight hospitals and more than 165 outpatient centers. Roughly 20% of those positions fall under one job — medical assistant.

A medical assistant performs relatively routine tasks, such as filling out insurance forms, scheduling laboratory appointments or preparing patients for treatment. But, increasingly, the job is becoming more clinical and their responsibilities expanding to where medical assistants are functionally bedside nurses.

And as one of the lowest paid clinical jobs in healthcare — the median wage in the U.S. is $17.23 per hour and $16.75 per hour in Michigan with an entry-level wage of $13.63 — the roles are increasingly more difficult to fill as workers seek employment in other industries that require less training and offer better benefits and bigger pay than healthcare.

"Medical assistants earn wages no better than those with no required training or skills," said Anne Scott, health center operations manager for the Michigan Primary Care Association. "Some fast food chains pay $15 an hour, so why would you go into a healthcare position that also requires an expensive training certificate? Many people can't just shell out $6,000 for a certificate program, go into debt and then make $14 an hour."

The same issue is playing out across other industries long known for good pay and consistent work, like manufacturing.

Michigan and the Midwest were built on the backs of factory employment, which historically paid significantly more than other jobs in the region, particularly for workers with limited to no secondary education or training.

But times, they are a-changing.

Hourly factory workers made an average of 56% more than restaurant and fast food workers in April, according to U.S. Department of Labor data analyzed by the Wall Street Journal. But that's down from 83 percent more in 2011.

In 2020, medical assistants made only 11% more than retail workers' average wage of $15.03 per hour and 39% more than fast food cooks.

But McDonald's announced in May it would raise the minimum wage for all restaurant employees to $15 an hour and upward of $17 per hour for some entry-level employees. Target and Walmart have already raised minimum wages to $15 an hour across their thousands of U.S. locations.

And many fast food chains have been offering large signing bonuses, including a recent $400 signing bonus at the Wendy's on Wixom Road in Wixom. Most chain retail and restaurant companies also offering tuition reimbursement toward an associate's or bachelor's degree.

Ash Shehata, principal and U.S. leader for the healthcare and life sciences practice at advisory firm KPMG, said the healthcare industry has spent 20 years instituting stricter licensing requirements on the workforce in an attempt to improve patient care but that has also made it harder to find workers in the tight labor market.

"Healthcare was ahead of the curve with pay for a long time and were using that pay to improve workers and patient flow," Shehata said. "That was fine two years ago. Now they are running into competition from all these other industries and those additional requirements and licensure have put overall market pressure on the base rate (of pay)."

Scott said the result is not only a draining of medical assistant candidates but also increased turnover at health centers, which typically pay less than larger health systems.

"Health centers are increasingly asking them to work at the top of their skill and training but as cheaply as possible," Scott said. "That kind of economics is just not panning out as workers can just walk out and make more at health system down the street or even a fast food restaurant or retail store."

A record 4 million people quit their jobs in April alone, according to the Labor Department.

"We haven't seen anything quite like the situation we have today," Daniel Zhao, a labor economist with the jobs site Glassdoor, told NPR last week.

Gianna Ferrarotti, vice president of talent management and organizational effectiveness at Beaumont, confirmed worker turnover is a problem in the system.

"We've seen about a 20% increase in openings since the onset of the pandemic," Ferrarotti said. "It's a really competitive market."

Beaumont instituted a $15 minimum hourly wage at the end of last year and is offering signing, retention and referral bonuses as a way to combat the problem, Ferrarotti said.

The health system is also increasingly relying on temporary workers from agencies.

Bob Riney, president of hospital operations and COO for Henry Ford Health System, said shortages are not only impacting medical assistants but also in housekeeping, labs, pharmacy and surgery technicians and even registered nurses. Between June 2020 and May 2021, open positions were up 19% at Henry Ford.

"We believe there will be a two or three year period where supply and demand will not be evenly matched for us," Riney said. "There's no question we're facing a challenge. We are looking for individuals that are drawn the mission of health care. The good news is that while the pandemic did increase and accelerate early retirement of individuals that were quite frankly people who were exhausted, but we feel the supply chain will be filled up again because people have realized the importance of health care during the pandemic."

In the meantime, Henry Ford is reevaluating its wages and working to create more flexibility in roles to appease current and potential workers, Riney said.

Henry Ford increased its minimum wage to $15 per hour last October, immediately affecting 3,000 employees.

Mercy Health and Saint Joseph Mercy Health System, which together comprise the Michigan region of Trinity Health, also raised its minimum wage to $15 per hour in 2020.

The health system is also using recruiting firms to find lower-skilled workers anywhere in the U.S., an expenditure Henry Ford typically reserved for finding physicians and nursing specialists.

"We're casting a wider net," Riney said. "There's no reason for roles like these we can't attract individuals from other communities and other states. People look to relocate for a lot of reasons, so we want to find those people. Historically we have reserved that for higher level roles, but we're now expanding that to medical assistants and other classifications."

Shehata agrees this is likely a short-term problem for the industry and other industries. While they are raising rates and paying more in labor today, most health systems will look to streamline operations and invest in technology to reduce those labor costs.

"We're going to see heavy digitization," Shehata said. "The idea that health care has to leverage automation to improve patient experience and improve the workflow is sort of a third rail that's as much about this labor shortage issue."

The Economic Alliance of Michigan, which represents employers, including General Motors Co., Ford Motor Co., Lear Corp. and others to advocate for higher quality and controlled pricing in health care, is also urging the industry to streamline operations instead of increasing hiring.

"Healthcare costs continue to rise and the industry never sees a contraction," said Bret Jackson, president of the nonprofit whose members provide health insurance to 900,000 Michiganders. "As the rest of the state's industries shrink, health care keeps growing. We just keep pumping money into an inefficient system and more workers won't solve that. Without a new way of doing business, the industry is headed for a bubble and all these workers they are hiring will be laid off."