Mass layoffs at hospitals hit new highs

For the most part, recent cutbacks have not affected clinical staff. But at some facilities, that's beginning to change.

By Victoria Stagg Elliott — Posted June 14, 2010

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Cuts of 50 employees or more at hospitals are affecting more workers than at any time since Hurricane Katrina, according to Bureau of Labor Statistics data. And indications are that this pace will not abate soon.

While most of the layoffs have come from administrative and trades staff, in some places -- particularly publicly run hospitals or systems that serve relatively large Medicaid and uninsured populations -- clinical staff is also starting to be thinned.

In Miami, the Service Employees International Union has filed a quality-of-care lawsuit against the publicly owned Jackson Health System. Recent layoffs included physicians and nurses among the 613 positions cut, 400 in early May.

"It's really not about the governance structure. It's more a matter of the particular economic circumstances of the community and how that affects the finances of the hospital," said Bruce Rueben, president and CEO of the Florida Hospital Assn.

In April, 1,967 hospital employees were affected by mass layoffs, according to the BLS. That would be a record-high total but for the 8,687 employees cut in September 2005, mostly due to hospital shutdowns in the wake of Hurricane Katrina.

There were 18 mass layoff events in April, the most since the 21 in July 2009. (September 2005 had 30.) Through the first four months of 2010, the number of hospital mass layoffs were on pace to eke past 2009's record of 152, and smash 2005's record of 13,282 affected employees.

Recent layoff announcements show that there is no sign mass layoffs are slowing.

In May, the New York City Health and Hospitals Corp., the nation's largest public hospital system, announced it would cut 3,700 positions, or 10% of its staff, by June 30, 2014. About 1,300 of those positions would be gone by June 30, 2010, including an unspecified number of physician jobs with the closure of six clinics. The system also announced it would cut its physician affiliation agreements by 6%, or $51 million.

Here are some locations recently announcing layoffs:

  • Greenville Hospital System in Greenville, S.C., announced May 11 that 31 people would lose their jobs and 50 unfilled positions would be eliminated.
  • The University Medical Center at Princeton, N.J., announced May 6 the elimination of 80 positions. This includes 33 full-timers and 24 part-timers. Another 23 vacant positions will be left unfilled. Those speaking for the institution said the cuts were the result of economic pressures combined with a project seeking to make the facility more efficient.

"The changes were carried out very thoughtfully because we did not want to have an adverse impact on patient care," said Carol Norris, University Medical Center's vice president of marketing and public affairs.

  • Maricopa Integrated Health System, a publicly run hospital system in Phoenix, in early June announced it would cut 145 positions, or 3% of its work force. The cuts include nurses. The system blamed reduced Medicaid payments for the layoffs.
  • Community Health Centers, the safety-net system in the Fresno, Calif., area, said in early June it would cut 150 administrative positions, blaming cutbacks in the state's Medicaid program, Medi-Cal, which in the last few years has gone from 40% to 52% of its patient population.

However, the increase in mass layoffs does not mean hospitals have stopped hiring.

Analysts say many hospitals are still filling information technology and clinical positions. Even as Community Health Centers cuts in some areas, it said it is hiring in the areas of specialized nursing, information systems and pharmacy.

"Generally hospitals will do anything but lay off their clinical staff," Rueben said. "That's the last course of action ... because patient care comes first."

Cutting administrative staff while hiring clinical staff explains why overall hospital employment had been going up despite the growing number of mass layoffs, analysts said. However, preliminary employment numbers for May, released June 4 by the Bureau of Labor Statistics, find that hospital employment went down 3,300 from April, from 4,711,200 workers to 4,707,900.

Meanwhile, ambulatory health services recorded nine mass layoffs in April, affecting 637 workers. Those were the highest monthly totals since July 2009, when there were 14 mass layoffs affecting 846 workers.

BLS employment numbers for May, however, found growth in the number of workers at physician practices. The increase was 2,500, from about 2,313,500 workers in April to about 2,316,000 in May.

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Heaviest months for mass layoffs

Aside from the September 2005 post-Hurricane Katrina numbers, the highest number of employees affected by hospital mass layoffs was in April 2010, the latest month for which information is available. A mass layoff is a single layoff in which at least 50 workers filed for unemployment claims.

By number of mass layoffs
September 2005 30
July 2009 21
September 2008 18
April 2010 18
January 2004 16
April 2009 16
May 2009 16
October 2004 14
August 2009 14
By number of employees affected
September 2005 8,687
April 2010 1,967
April 2007 1,773
July 2009 1,716
September 2006 1,628
January 2004 1,578
September 2008 1,571
June 2007 1,436
June 2009 1,429
October 2004 1,375
May 2009 1,338

Source: Bureau of Labor Statistics, U.S. Dept. of Labor

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