Health care workforce is recession proof. Is it ‘pandemic proof?’
Health care workers are facing threats to their jobs — pay cuts, furloughs and even layoffs — amid the worst disease outbreak in a century that has already infected more than 770,000 people in the U.S.
Hospitals are focused on combating the coronavirus, but that’s not where the money is. Medical practices and patients themselves are postponing elective procedures and delaying routine visits that usually drive profits. Plummeting revenue, compounded by higher costs for supplies like personal protective equipment, has led health care executives to take drastic steps like cutting payroll to try to keep their lights on as they fight the pandemic.
And while some hospitals in hot spot areas are overstretched, the Trump administration last month urged providers around the country to shut down a huge portion of care services in anticipation of an influx of coronavirus patients that wasn’t as bad as forecasted in some areas. That left some health care workers who aren’t involved with direct Covid-19 care without much to do and prompted executives to lean on furloughs or pay cuts to maximize budgets. Some employees were able to move to other areas within their hospital or health system to fill in where they were needed, but not everyone could do that.
Congress sought to help, allocating $100 billion for hospitals as part of its stimulus rescue package — but that didn’t reach all parts of the health care system. Plus, hospitals didn’t have to spend the money on staffing.
Congress is likely to bolster that aid with an additional $75 billion in its latest relief deal, which lawmakers are trying to finalize. But providers and industry analysts say the aid, while helpful, doesn’t make up for the one-two punch of spending more to prepare for the pandemic and bringing in less money as elective procedures were halted.
In addition, the Trump administration late Sunday released guidelines for how to reopen the health care system in areas with low rates of Covid-19 that included a vague recommendation mandating staffing levels remain “adequate” to address a potential coronavirus surge. That step might help save some health workers’ livelihoods — but it won’t solve the whole workforce problem. So far, a handful of states like Oklahoma, Texas and Alaska have announced they’ll loosen some restrictions on elective surgeries, and a few other states are considering relaxing those rules.
The turmoil over health care jobs is unprecedented, as the industry historically has been largely protected from economic downturns. In fact, health care is usually a job generator that helps recovery. During the Great Recession, the industry continued to create positions even as the rest of the economy shed millions — adding more than 850,000 between 2007 and 2010, while the overall economy lost nearly 8 million, according to the Bureau of Labor Statistics.
But in the current downturn, that’s not the case. Tens of thousands of health workers who aren’t caring for coronavirus patients have already been laid off, and experts warn that number could multiply. The issue now is the extent of the damage and how long will it last.
“Health care has generally been recession-proof,” said Gerard Filicko, vice president of Virginia Care Partners, a collaborative network that supports physician practices. “Is it pandemic-proof?”
Nancy Foster, vice president for quality and patient safety policy at the American Hospital Association said hospitals don’t want to let staff go. “But financially, many of them could not avoid the tough reality of having to lay people off.”
There’s no comprehensive data that illustrates how broad the effects on the health care industry have been, but by all measures, the damage appears extensive.
The Department of Labor’s March jobs report showed a loss of nearly XMRare from mid-March, before most closures and stay-at-home orders took effect.
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Since then, 19 states have voluntarily reported health care layoffs as a significant driver of their spike in unemployment insurance claims in the DOL’s past three weekly jobs reports. And nearly half of medical practices have temporarily furloughed staff, while another 22 percent have permanently laid off employees — a situation expected to worsen in the next month, according to the Medical Group Management Association, which surveyed 724 practices.