Full employment puts upward pressure on hospital wages, demand for housing
CATHOLIC HEALTH INITIATIVES
By NANCY FRAZIER O'BRIEN
The area surrounding Mercy Medical Center in Williston, N.D., is experiencing unprecedented economic growth, and it doesn't show any signs of slowing soon.
Because of the shale oil boom that began in earnest three years ago, the population in Williston is expected to nearly triple over the next five years from 14,716 in the 2012 census to almost 40,000 in 2017. The average salary in Williams County, which includes Williston, has more than doubled from $32,000 in 2006 to $71,000 last year, and North Dakota's 1 percent unemployment rate is the lowest in the nation.
The industry attracting people to North Dakota is hydraulic fracturing, or "fracking," a process by which water, sand and chemicals are pumped underground to break apart rock and release oil and natural gas to the surface. The process allows deeper and angled drilling to reach trapped oil and gas that was not previously accessible in the Bakken formation, the geologic stratum covering 25,000 square miles beneath North Dakota and Montana. In North Dakota, much of the natural gas, which is plentiful and cheap in the current market, is burned off as waste, releasing carbon dioxide and lighting up the prairie with a bright glow that is visible in night satellite images.
More than 200 oil rigs are currently operating in North Dakota, with 90 percent of them within a 70-mile radius of Williston.
In addition to environmental considerations, the oil boom comes with immediate, practical challenges like a need for a rapid build out in the labor force and the related demands on housing, emergency services and health care. Mercy Medical Center, a 25-bed critical access regional medical facility which is part of Colorado-based Catholic Health Initiatives, is positioning itself to respond to the needs of the expanding community.
Housing shortage
"The last three years have been an amazing time to be in health care in western North Dakota," said Matthew Grimshaw, president and chief executive of Mercy Medical Center. "At a basic level the boom has been a good thing. But there are significant challenges related to providing health care in this environment."
The most urgent need is for housing. People are paying "New York City or Washington, D.C., prices" for apartments, Grimshaw said, and many have been forced to live in basements, campers or "crew camps," where they sometimes lack access to water, electricity or proper sanitation.
"As we interview people across the country, the first question is ÔWhat is the housing availability?'" Grimshaw added, "We have had to rely on the traveling nurse corps far more than we would have liked to."
Of course traveling nurses also need temporary housing, so Mercy has created sleep rooms in the hospital and rented apartments where its employees can stay on a short-term basis.
As a more permanent solution to the housing crisis, Mercy is building a $10.6 million, 65-unit community housing complex that will be open not only to hospital employees but to local teachers, first responders and other public-sector employees.
The complex, which includes 6,500 square feet of commercial space, should be ready for residents in the fall.
Wage pressure
A related challenge comes in the area of staffing and wages. "Mercy has just under 500 employees, and at any given time we have 50 vacancies," Grimshaw said. "And wage pressure is ongoing; it never goes away."
Mercy's payroll costs for wages and benefits increased from $61,890 per full-time employee in fiscal 2009 to a projected $91,592 in fiscal 2013. Charity care and bad debts now make up 15.6 percent of net revenue, compared to 9.3 percent four years ago.
The minimum starting wage of $12 an hour for any hospital position is "higher than it has ever been in the past," Grimshaw added. But unlike businesses, hospitals can't raise prices to adapt to the rising labor costs.
"We're not in a position to pass on staffing cost increases to customers," he said. "So health care and education have been tasked to become more creative, to figure out more efficient ways to provide services."
Mercy Medical Center is investing more than $25 million in facility expansion and renovation in the next24 months, aided by more than $2.5 million in local contributions and a commitment of more than$4 million from the Leona Helmsley Charitable Trust for its new $7 million cancer center.
Last September Mercy opened a $20 million Out-patient Surgery Center and The BirthPlace that features three operating rooms, with space for another; two dedicated procedure rooms; eight birthing suites; eight overnight-stay surgical recovery beds; and community meeting space.
Net patient service revenue has increased by 51 percent in the last five years, and emergency room volume has doubled since before the boom, Grimshaw said.
Dangerous business
Hospital employees also have had to respond to changes in the types of injuries and illnesses they treat.
"There has been an increase in traumas and orthopedic injuries related to the oil fields," Grimshaw said. In addition, increased road traffic has resulted in "more motor vehicle accidents resulting in fatalities or traumatic injuries," he said.
Dr. Jeffrey Sather is medical director of the emergency trauma center at Trinity Health hospital in Minot, N.D., roughly 107 miles due east of Williston. He told ND Physician, a publication of the North Dakota Medical Association, that the types of trauma seen in his ER "are the same as what I saw when I worked in a larger city — violence, drug overdoses, sexual assaults, stabbings, shootings."
"These events aren't rare anymore," Sather added. "Ten years ago, 90 percent of the people in Minot were born and raised in the region. We had a sense of community. Everyone had a stake in the game. That isn't always the case today."
Grimshaw said the rapid growth in population also has come with an increased demand for mental health services, and Mercy — which currently provides mental health services on an outpatient basis only — is evaluating how to best meet those needs.
The oil boom is expected to last for another 20-30 years, and Grimshaw feels confident that Mercy Medical Center, founded by four Sisters of Mercy in 1920, will continue to grow and change to meet new community needs.
"We believe, just as the Sisters of Mercy did back then, that our mission compels us to meet the changing health care needs of the community," he said.
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