Health care layoffs already exceed last year's totals

But there is some good news -- the number of job cutbacks is starting to decline.

By Victoria Stagg Elliott — Posted Nov. 2, 2009

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The health industry experienced fewer mass layoffs over the past few months, although the number of layoffs is still high compared with past years, according to a report issued by the Bureau of Labor Statistics Oct. 22.

"We're not out of the woods yet," said Kerry McKean Kelly, vice president of communications for the New Jersey Hospital Assn. "There remains a lot of worry about the future."

Mass layoffs are defined as at least 50 job losses from one employer.

Ten mass layoffs occurred at hospitals in September and 14 happened in August. July had the highest total for the year at 21.

Ambulatory health care settings had four mass layoffs in September and three in August. Another 14 occurred in July.

Although the number of layoffs are declining on a month-to-month basis, experts expressed caution about saying the health care industry has recovered from the economic slump.

These numbers might undercount large layoffs because they are based on unemployment claims, and not all who lose their jobs file for benefits.

According to the Bureau of Labor Statistics, 127 mass layoff incidents occurred during the first nine months of the year.

Only 112 happened in all of 2008. These numbers were as low as 67 in 2007 and 57 in 2006.

In the ambulatory care setting, 65 mass layoffs already have happened this year, compared with 71 for all of 2008. Only 39 were recorded in 2007 and 37 were recorded in 2006.

"A lot of people think [the recession] is over, but we have not gotten an endpoint from the official arbitrator," said Tom Krolik, a BLS economist. "And it looks like the numbers are running noticeably higher for 2009."

Medicine has been affected in this economic downturn because patients have lost their jobs, and, often in tandem, their insurance. This is reducing demand for elective procedures while increasing the demand for uncompensated care.

Bureau of Labor officials point out, however, that the health care sector is still doing better than others. Since the recession officially began in December 2007, health and education have been the only categories that have consistently added jobs. All others have lost them.

"Health care is acyclical," said Krolik. "People get sick and they need care, regardless of what is going on in the economy."

Recent health industry layoff announcements include:

  • Sept. 29: Beaumont Hospitals in suburban Detroit cutting 353 full-time positions.
  • Oct. 21: Seven hundred vacant positions at Cook County Health and Hospitals System in the Chicago area were eliminated and 335 people laid off. More job losses are expected next year.
  • Oct. 21: A restructuring plan at Forum Health, a system in Youngstown, Ohio, would eliminate an unspecified number of positions through attrition and layoffs.

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Layoffs loom large

Mass layoffs at hospitals have passed the 2008 total, and layoffs in ambulatory care settings are near last year's totals. Mass layoffs are defined as at least 50 workers losing jobs.

Mass layoffs
Hospitals Ambulatory care
2009 127 63
2008 112 71
2007 67 39
2006 57 37
2005 97 83
2004 90 57
2003 100 64

Note: 2009 totals include layoff numbers through September.

Source: Bureau of Labor Statistics

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