The job vacancy rate in Minnesota hospitals has surged from 6% to 21% over the past year, leaving health care systems scrambling to maintain patient care with high-cost temporary help.

Rising labor costs drove 56% of Minnesota hospitals and health care systems' finances into the red through the first half of 2022, according to a report released Tuesday by the Minnesota Hospital Association. That compares with 41% reporting negative operating margins last year.

"The workforce issues are driving part of the financial crisis and making it significantly worse," said Dr. Rahul Koranne, the trade association's president and chief executive.

Koranne said the report will kick-start a strong lobbying effort to increase government support for hospitals before the declining workforce and revenues compromise patient care. Unlike other industries, hospitals have a legal and ethical obligation to be open, he said, whenever a patient has an urgent medical need or a random 12-year-old arrives at the emergency room.

"We must have competent staff waiting at the door when that 12-year-old comes," he said. "That's our mission. We can't fail on that."

Some of the labor pressures were exacerbated by the stresses of the COVID-19 pandemic, including the more than 9,800 vacancies for 40 different direct patient care jobs.

Other problems have been emerging for years, including the aging of the baby-boomer generation that is pushing many veteran hospital workers into retirement. One-third of surgeons and doctors in procedural specialties will be over age 65 within 10 years.

"COVID merely precipitated it and created a crisis," said Dr. Cindy Firkins Smith, senior vice president for rural health for the St. Cloud-based CentraCare system. "Instead of it gradually elevating and escalating, boom, it came very quickly."

Firkins Smith said the shortage is already affecting patient care. CentraCare's hospital in Monticello recently performed baby deliveries that had been scheduled at Maple Grove Hospital but had to be moved because of staffing issues. Patients are waiting hours or days in emergency rooms, and then getting transferred because their local hospitals lack the staffing to provide enough inpatient beds.

"It's kind of a musical beds situation," she said.

The next generation of health care workers is stepping in with less interest in full-time work, exacerbating the supply issues. More than 62% of hospital workers in 2016 were full-time — working more than 32 hours per week — but that rate dropped below 56% this year. Only 43% of registered nurses are working full-time, the lowest number the hospital association has ever reported.

Minnesota hospitals actually increased their hiring from 8,605 new employees in 2020 to 11,056 in 2021, but couldn't keep pace with the rate of workers quitting or reducing hours.

Improved working conditions could stem the turnover and loss of nurses to part-time hours, said Mary Turner, president of the Minnesota Nurses Association and an intensive care nurse at North Memorial Health in Robbinsdale. The union represents roughly 15,000 nurses in an ongoing contract standoff — including a three-day strike earlier this fall — with their hospitals in the Twin Cities and Duluth area.

Some nurses are concerned about personal safety amid an increasingly agitated population of patients and visitors, while others are burning out from schedules loaded with night shifts followed by day shifts, she said.

"To be able to do the day-night flip-flop flip-flop, there is no way you can do that full-time" and maintain a safe level of patient care, she said.

The staffing issue goes beyond registered nurses. Some of the highest job vacancy rates are for respiratory therapists and nursing assistants, the hospital association found.

The Minnesota Hospital Association report is based on responses from 97 health care providers in Minnesota, which collectively employ more than 77,000 direct patient care workers in hospitals, clinics, labs and other medical facilities. That amounts to about three-fourths of the hospital providers in the state.

Retention of incoming workers is going to be critical, Koranne said. The retention rate of workers with less than five years of experience was only 75% over the past year while the rate for more veteran workers was 85%.

Hospitals are responding with hiring programs that quickly acclimate new workers to their positions and cross-training programs that enable staff to work in different medical units and specialties.

One challenge, Koranne said, is that rising reliance on temporary help to fill open shifts is siphoning money that could otherwise pay for innovative training and retention programs.