Healthcare sector added 358K jobs, hospitals had first gains in 2 months

By | July 6, 2020

Dive Brief:

  • The healthcare sector added 358,000 jobs throughout the last two weeks of May and the first two weeks of June, according to the U.S. Bureau of Labor Statistics monthly jobs report. Similar to last month’s report, dentists and physician’s offices saw notable gains: 190,000 and 80,000 jobs added, respectively.​ Hospitals added about 7,000 jobs, the first gain since March.
  • Other winners include ambulatory surgery centers, adding 37,400 jobs. Home health care services also added about 18,000 jobs, while nursing care facilities lost about the same amount.
  • The unemployment rate overall dropped from 13.3% in May to 11.1% in June. A misclassification error that caused confusion in last month’s report has largely been fixed, though the true rate is likely 12%, about one percentage point higher, according to BLS.

Dive Insight:

The monthly jobs report only covers the first two weeks of June, not accounting for the most recent COVID-19 case surges in western and southern states that have reported some of their highest daily numbers since the outbreak began.

Providers like Tenet Healthcare had reported patient volumes beginning to return fairly robustly, but the recent increases have forced some Texas counties to once again halt elective procedures. While other states have not yet followed suit, skyrocketing cases counts are likely to depress volumes significantly, which could lead once again to layoffs and furloughs down the line.

“We are still in a big state of flux with the virus,” Erica Groshen, former BLS commissioner and current senior labor economics advisor at Cornell’s School of Industrial and Labor Relations, told Healthcare Dive. “Things could get a whole lot worse, or this could be the peak and things get better, but the recession itself has just basically gotten underway.”

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Especially during the pandemic, the monthly jobs report and unemployment rate offer a glimpse into where the country and economy are headed. President Donald Trump hailed May’s 13.3% unemployment rate, after hitting a record 14.7% in April following stay-at-home orders and other shutdowns. This February, the U.S. unemployment rate was 3.5%.

Controversy swirled, though, around how BLS recorded a certain category of workers in May’s report: those temporarily not working because of the pandemic. That includes workers on furloughs and others who plan to return to their jobs eventually.

A June 29 BLS blog post explains the misclassification and steps the bureau is taking to remedy the issue in June’s report. Overall, about 4.9 million workers on temporary layoff were misclassified in May, and the overall unemployment rate was likely about three percentage points higher than reported, according to BLS.

Hospitals in particular have dealt with major financial losses leading to workforce reductions. Many of the country’s largest operators have instituted furloughs and some have issued pay cuts and layoffs.

On June 24, nonprofit Mayo Clinic said it plans to bring back furloughed workers by the end of August. On June 29, Trinity Health, also a nonprofit, said it’s extending the furloughs already in place for nearly 12% of its 125,000-person workforce.

Overall, hospitals added about 7,000 jobs in June after losing 27,000 in May. June’s report also shows notable gains for outpatient care centers, with about 24,000 new jobs.

Notable losses continued for nursing and residential care facilities, which shed another 18,000 jobs after losing 36,000 in May. 

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Adam Seth Litwin, associate professor of industrial and labor relations at Cornell, told Healthcare Dive declines in nursing and residential care jobs could be attributed to those facilities’ inability to raise wages.

“Reimbursements from Medicare and Medicaid remain where they were, and the resulting low wages — which always made these jobs difficult to fill — are proving to be even more of an impediment now,” Litwin said.

According to BLS, healthcare jobs are projected to grow 14% from 2018 to 2028, much faster than the average for all occupations. Groshen said it’s unclear what impact the pandemic will have on those predictions long term, but the structural changes it’s having on the healthcare industry are already apparent.

Increasing telehealth and EHR use mean “you’re going to get more of certain kinds of employees and fewer of others,” Groshen said. “So that means more churning, jobs being eliminated and jobs being started.”

She also said the increasing consolidation of healthcare jobs among mega-hospital operators could lead to more union activity.

“Concerns about proper [personal protective equipment] and safety have heightened workers’ interest in having formal protections,” Groshen said.

Nurses with the country’s largest for-profit hospital chain, HCA Healthcare, are striking this week at a California hospital after a staffing contract they bargained for expired.

Friday, nurses at HCA’s Blake Medical Center in Bradenton, Florida, will protest what they call unsafe protections for healthcare workers and patients, according to a release from the country’s largest nurses union, National Nurses United.

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