2010 could end up as worst year for hospital layoffs

Increased demand for charity care, fewer elective procedures and reductions in payments from government programs are blamed.

By Victoria Stagg Elliott — Posted Oct. 4, 2010

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Hospitals are on pace this year to carry out more mass layoffs than they did in 2009, and more employees would be affected. At the current rate, 2010 would be the worst year recorded for mass layoffs.

Hospitals initiated 12 mass layoffs in August leading to 1,027 people claiming unemployment benefits, according to Bureau of Labor Statistics data released Sept. 23. It was the second consecutive month with more than 10 mass layoffs affecting more than 1,000 employees. July recorded 14 such events and 1,357 affected workers. The BLS defines a mass layoff as involving 50 or more employees.

As of August, hospitals had 102 mass layoffs in 2010, according to BLS. At the current pace, 153 such events would happen by year's end -- one more than the record of 152 in 2009. Seven out of the eight months in 2010 had 10 or more mass layoffs. Only June, with nine, did not reach double digits. Overall, 23 of the last 27 months have had 10 or more mass layoffs by hospitals.

As of August, 8,233 employees had been affected by mass layoffs at hospitals. Continuing at this rate, 12,349 hospital employees would be cut in mass layoffs by the end of 2010. That would be the second-highest loss recorded by the BLS since 2000, second only to 13,282 in 2005 -- with 8,687 of those jobs lost because of hospitals shut down because of damage from Hurricane Katrina.

In 2009, 11,757 hospital employees lost their jobs through mass layoffs, according to the BLS.

The BLS will release official totals for September on Oct. 22, but recent reports indicate more layoffs are likely this year. Hospitals blame increasing demand for charity care, cuts in demand for elective procedures and reductions in payments from government programs. Administrative and support staff positions are most likely to be eliminated, although nurses and others directly involved in patient care are sometimes affected.

For example, Boston Medical Center announced Sept. 14 that 119 people would be laid off, including nurses and management staff. An additional 40 employees had their hours cut.

"The hospital is projected to lose $175 million this year due to dramatic changes in Medicaid reimbursements," said Tom Traylor, BMC's vice president of federal, state and local programs. "We have been talking to the staff about this new reality for well over a year and have been working to assess and increase efficiency in every corner of the hospital. We have been consulting with outside experts to study the efficiency of delivery of patient care, and they found very little excess capacity particularly in terms of hospital staffing levels. This layoff is one necessary element of addressing the hospital's financial situation."

However, some hospitals report that they are hiring again.

Local media reports have noted that Mount Pleasant (S.C.) Hospital, a new facility, is hiring 300 people, Tift Regional Medical Center in Tifton, Ga., is adding 66 positions, and the University of Iowa Hospitals and Clinics is adding at least 50 nurses. All facilities have noted that employment is rising in their area, which has resulted in patient visits increasing as well.

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Mass hospital layoffs on an active pace

If it continues at its current rate, 2010 would be the worst year ever for the number of mass layoffs of hospital employees, and second-worst for the number of affected employees. Over the last decade, here are the years with the largest numbers of layoffs and the highest number of affected employees.

Mass layoffs
2010 153 (projected)
2009 152
2008 112
2003 100
2005 97
Affected employees
2005 13,282
2010 12,349 (projected)
2009 11,787
2008 9,268
2000 8,526

Note: 2005 figures include layoffs predicated by damage to hospitals from Hurricane Katrina.

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

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