Hospital layoffs likely to hit all-time yearly high

After peaking in July 2008, the rate of layoffs has started to go down.

By Victoria Stagg Elliott — Posted Jan. 18, 2010

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Mass layoffs of hospital staff will hit an all-time peak when the final numbers for 2009 are tallied, according to Bureau of Labor Statistics data released Dec. 22, 2009.

The year ended better than it started for hospital staffing. "Things have started coming down. There's no question about that," said Patrick Carey, a Bureau of Labor Statistics economist.

Mass layoffs are defined as involving at least 50 people from a single employer.

July 2009 was the peak, with 21 mass layoffs and 1,716 people claiming unemployment benefits. The number of mass layoffs went down in subsequent months, with 14 layoffs in August, 10 in September, 11 in October and seven in November. With data for December 2009 not yet available, 145 mass layoffs have been recorded for 2009, with 11,279 people claiming benefits. The number is the highest since such data started to be tracked in 1995. The number of claimants is the second-highest.

Experts say it is too soon to say that the hospitals are winding down their mass layoffs.

"I would not go so far as saying things are getting better," said Carey. "In terms of layoff activity, the fourth quarter of 2008 and the first quarter of 2009 were high, and things have started coming down from there. We have to wait a little bit to see what bears out in the next few months."

Additional information on the subject most likely will come from state hospital associations that are surveying their members on how they are handling economic pressures.

"Hospitals are continuing to struggle to serve and survive during this challenging economic time," said Howard A. Peters, senior vice president of the Illinois Hospital Assn. "Until we see a turnaround with people going back to work with good benefits including health care, this is going to continue to be a challenging time for hospitals."

According to a survey by the American Hospital Assn. released Nov. 11, 2009, 87% of the 768 CEO respondents made changes to address economic challenges. Approximately 51% reduced staff.

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