Mass layoffs at hospitals increased in January

There is concern that state budget cuts could make things worse.

By — Posted March 10, 2010

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After several months of decreases, the number of mass layoffs at hospitals and the number of former employees claiming unemployment benefits went up in January, according to a report issued Feb. 23 by the Bureau of Labor Statistics.

Those advocating for the industry say strapped state budgets and reductions in Medicaid and Medicare reimbursements may mean more layoffs in the coming months.

"The state budget cuts we are facing, the seventh round of state Medicaid cuts in less than 24 months, the potential loss of billions in Medicare funding, will without a doubt lead to more job losses and service reductions across the state," said Bill Van Slyke, spokesman for the Healthcare Assn. of New York State.

The Bureau of Labor Statistics recorded 13 mass layoffs at hospitals in January. This led to 995 people claiming unemployment benefits, according to the division of the U.S. Dept. of Labor.

A mass layoff is defined as involving at least 50 people losing their jobs at a single time. These numbers do not include smaller incidents.

The January numbers follow five months during which these statistics either declined or were flat, although the layoff total of 152 in 2009 was the highest since 1996, when the agency started tracking these numbers.

Hospital finances are expected to continue to be strained by ongoing malaise in the economy as a whole, which has led to increased demand for charity care, decreased demand for elective services and more people on public health programs.

For example, an analysis by the Kaiser Family Foundation issued Feb. 18 documented a significant increase in Medicaid enrollment. The program covered 3.3 million more people in June 2009 than in June 2008. Every state had an increase in Medicaid enrollment, and 32 states experienced a growth rate that was twice as high as the year before. In another survey by the organization, 29 states were considering midyear cuts in provider rates.

Mass layoffs reported thus far in February include:

  • More than 300 employees from St. Vincent's Hospital Manhattan in New York.
  • The elimination of 268 full-time jobs at Forest Park Hospital in St. Louis.
  • Approximately 900 positions at Jackson Health System in Miami.

The number of mass layoffs at ambulatory health care centers, a category that includes physician offices, went down slightly. Only four occurred in January, with 216 workers claiming benefits. But these data are less telling, because layoffs of at least 50 people at one time are far less common in this setting.

A total of 1,761 mass layoff actions occurred in the economy as a whole, leading to at least 182,261 workers losing their jobs in January. Most were in manufacturing, but thousands also lost their jobs in construction and retail.

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