Healthcare’s furloughs continue even as parts of the US begin to reopen
Tuesday, April 21, 2020
The cratering of the healthcare job market has continued as COVID-19 spreads across the United States. The overall U.S. economy continues to be ravaged, as more than 22 million people have filed for unemployment benefits as of April 17, with the virus, for now, wiping out a decade of job gains.
The United States has not seen this level of job loss since the Great Depression, and the government is struggling to respond fast enough to the deadly coronavirus health crisis.
Healthcare, long seen as an untouchable career field — safe from the ups and downs of the economy — is among the sectors hardest hit by the pandemic. The other, more obvious, sectors affected include hospitality, retail, restaurants, travel, and tourism.
How does healthcare fit into this puzzle?
The new normal under the guise of the COVID-19 crisis seems to level no corner swept out. In healthcare, the reason for the continued firings and furloughs is simple economics. Elective procedures remain shuttered, though, as of this writing, there are some states in Phase 1 of the Trump Administration’s economic reopening plan that may soon remove the shutters and open doors while maintaining social distancing and having people wear masks in public.
For this part of the plan, elective surgeries can resume, as clinically appropriate, on an outpatient basis at facilities that adhere to the Centers for Medicare and Medicaid Services (CMS) guidelines. States that may be among the first to reopen their economies include Minnesota, Hawaii, Montana, Oregon, West Virginia, and Alaska.
Except for Minnesota and perhaps Hawaii, these locales are relatively rural (sans Portland, Oregon), with smaller populations and economies. Healthcare workers in these areas should be able to get back to work soon, but that's a small portion of the overall healthcare economy resuming their roles.
Elsewhere, low patient volumes mean many working in healthcare have a longer row to hoe in front of them. To this point, nationwide, nearly half of independent medical practices report they have had to furlough or lay off staff, according to a survey from the Medical Group Management Association.
The survey received 724 responses from medical practices between April 7 and 8. The practices surveyed said they experienced at least a 60% drop in patient volume and a 55% decrease in revenue since the country shut down because of the coronavirus.
Forty-eight percent of practices said they have temporarily furloughed staff, and 22% permanently laid off staff. Many layoffs and furloughs may still be yet to come, especially if conditions persist during the next month.
Nearly 75% of the respondents said they are part of independent medical practices but employ less than 50 full-time physicians.
“Our new data reflect a shocking decline in the number of patients seeking non-COVID-19 medical care during this crisis,” said Anders Gilberg, MGMA's senior vice president of government affairs, in a statement. “Patients are foregoing necessary preventive and even acute care out of fear of exposure. Medical practices are struggling to keep their doors open as volume collapses.”
One medical center in Detroit announced it furloughed 480 workers that are not on the front lines of the COVID-19 outbreak or other critical patient needs.
It’s worth noting that practices not treating COVID-19 are still in operation, many of them using telehealth technology to see and interact with patients. CMS agreed to pay for virtual visits at the same rate as in-person visits. At the same time, the coronavirus emergency remains in effect and will pay physicians for telephone-based patient visits.
Even when elective procedures return, practices and health systems face the encumbering problem of finding PPE to perform the procedures. The American Hospital Association and American College of Surgeons laid out a potential roadmap for resuming the processes vital to a hospital's bottom line.
Elective procedures can only begin once a facility has had at least 14 days of sustained reduction of COVID-19 cases in the geographic area. Still, the facility also must have an appropriate number of intensive care units and non-ICU beds, PPE, ventilators, and staff to treat any non-elective patients.
Even health insurers are taking a hit. UnitedHealthcare said commercial plan membership declined by 475,000 compared to the first quarter of 2019 because of job losses related to COVID-19. UnitedHealthcare is seeing an uptick in customers seeking premium relief as a result of the pandemic. Typically, these payment plans represent about 0.4% of premium revenue, while on March 1, that increased to 1%. For April 1, it was 3%.
Don’t feel bad for the health insurance giant, though. In its first-quarter earnings report, the company reported $3.4 billion in profit.
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