May 11, 2020

While America's Covid-19 epidemic surged, the health care industry lost 1.4M jobs last month

Daily Briefing

    The health care industry lost a record 1.4 million jobs in April, as many hospitals postponed elective procedures and doctors' offices closed their doors, according to a preliminary report released Friday by the U.S. Bureau of Labor Statistics (BLS).

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    The preliminary report comes as U.S. officials as of Monday morning had reported 1,336,700 cases of Covid-19, the disease caused by the new coronavirus—up from 1,264,000 cases as of Friday morning.

    As of Monday morning, officials also had reported a total of 79,552 U.S. deaths linked to the new coronavirus—up from 75,746 deaths reported as of Friday morning.

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    The three officials are FDA Commissioner Stephen Hahn; Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases (NAID); and CDC Director Robert Redfield.

    All three health officials are scheduled to testify before the Senate Health, Education, Labor, and Pensions (HELP) Committee on Tuesday, marking the first time administration officials directing the country's coronavirus response are scheduled to testify before federal lawmakers in nearly two months, Politico reports. The officials now are expected to testify at the hearing via teleconferencing.

    Health care industry loses record 1.4M jobs in April

    As the new coronavirus continues to spread throughout the country, data released Friday shed new light on the effect the United States' Covid-19 epidemic is having on the country's economy and Americans. For instance, a Department of Labor report released Friday showed that the U.S. unemployment rate rose to a record high of 14.7% in April, as the number of unemployed Americans increased by 15.9 million last month amid closures of nonessential businesses and state stay-at-home orders intended to curb the epidemic.

    Preliminary data released Friday by BLS showed that the health care industry specifically lost 1.4 million jobs in April.

    According to the data, dentists experienced the most job losses, with an estimated 503,000 jobs lost last month. Physicians' offices lost 243,000 jobs, and the offices of other health care practitioners lost 205,000 jobs, the data showed. The data also showed that hospitals lost nearly 135,000 jobs last month.

    In addition, nursing care facilities lost 47,200 jobs, community care facilities for the elderly lost 33,400 jobs, and residential care facilities lost 26,900 jobs in April, according to the data.

    The job losses in the health care industry are particularly notable because, in the past, the industry has been resilient to such losses amid economic downturns, partly because the need for care does not diminish during times of economic crisis. However, the new coronavirus epidemic is affecting routine care in unprecedented ways, as many providers have postponed elective procedures to prevent the new coronavirus' spread and protect personal protective equipment supplies for frontline health care workers.

    According to the Wall Street Journal, the numbers likely don't show the full impact of the new coronavirus on health care workers, as many hospitals and clinics have reduced the hours of certain workers.

    "This is a disruption unlike any we've seen in decades," said Ani Turner, Altarum Institute's co-director of sustainable health spending strategies.

    Further, experts predict that resuming elective procedures likely will not result in immediate substantial job gains, because many patients are afraid they'll become infected with the new coronavirus if they receive care at a hospital or outpatient facility, which means patients could continue avoiding care and the industry will continue to see low patient volumes. In addition, many Americans have lost their employer-sponsored health coverage along with their jobs, Axios' "Vitals" reports.

    "It's really, really uncertain," said David Cutler, a professor of economics at Harvard University. "The most we can say is if things recover quickly, the medical sector will be fine. If they don't then all bets are off."

    But John Fanburg, managing partner and chair of the law firm Brach Eichler's health care practice, said he is optimistic the health care industry will rebound more quickly than other industries because people will need to seek care for heart disease, cancer, and other conditions—though he noted that recovery will depend on whether Covid-19 cases begin spiking as states start to reopen nonessential businesses and scale back social distancing measures.

    "If [the epidemic] can stay contained, I believe health care job losses will bottom out and they'll begin to rebound in June and July," he said (Singh et al., Reuters, 5/9; Goldberg, Politico, 5/9; Rummler/Falconer, Axios, 5/10; Diamond et al., CNN, 5/11; Bannow, Modern Healthcare, 5/8; Sanger-Katz, "The Upshot," New York Times, 5/8; Torry/Evans, Wall Street Journal, 5/8; Baker, "Vitals," Axios, 5/11; New York Times, 5/8).

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