USAT's Davidson and Hansen Treat Growing Hospital Staff Cuts As 'Surprising'

The healthcare sector, particular hospitals, is hitting a wall. In a Sunday morning writeup, USA Today reporters Paul Davidson and Barbara Hansen considered this news "surprising," because Obamacare is supposedly going to bring hospitals so much new business.

Well, guys, that new business needs to be profitable. Odds are it won't be. The staff cuts also appear to foreshadow the rationing so many people have predicted would result, and which has resulted under state-run healthcare in U.S. states like Massachusetts and other countries, if Obamacare passed. Of course, the USAT pair didn't recognize that possibility. Excerpts follow the jump (bolds are mine):


A job engine sputters as hospitals cut staff
Hospitals are cutting thousands of jobs, undercutting a sector that was a reliable source of job growth, even through the recession.

Hospitals, a reliable source of employment growth in the recession and its aftermath, are starting to cut thousands of jobs amid falling insurance payments and inpatient visits.

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The payroll cuts are surprising because the Affordable Care Act (ACA), whose implementation took a big step forward this month, is eventually expected to provide health coverage to as many as 30 million additional Americans.

"While the rest of the U.S. economy is stabilizing or improving, health care is entering into a recession," says John Howser, assistant vice chancellor of Vanderbilt University Medical Center.

Health care providers announced more layoffs than any other industry last month — 8,128 — largely because of reductions by hospitals, according to outplacement firm Challenger Gray and Christmas. So far this year, the health care sector has announced 41,085 layoffs, the third-most behind financial and industrial companies.

Total private hospital employment is still up by 36,000 in the past 12 months, but it's down by 8,000 since April, and more staff reductions are expected into next year.

... There are myriad reasons for the cuts, which are affecting administrative staff as well as nurses and doctors:

Medicare, Medicaid and private insurance companies are all reducing reimbursement to hospitals. The federal budget cuts known as sequestration have cut Medicare reimbursement by 2%, the American Hospital Association says.

• As more Baby Boomers turn 65, their services will be reimbursed at Medicare rates that are lower than those of private payers, putting further pressure on hospital revenue.

Seasonally adjusted data from the government's Bureau of Labor Statistics shows only 7,000 jobs added at hospitals during the first eight months of this year.

So hospitals are cutting staff, and they expect an influx of patients who will now be able to utilize their services and that many Americans, as they age, will need more of their services. The combination of more customers, customers requiring more treatment, and less ability to serve customers due to inadequate reimbursements means that more Americans will experience longer waits for treatments and more aggressive attempts to talk them out of receiving those treatments, i.e., de facto rationing.

Imagine that.

Cross-posted at BizzyBlog.com.

Tom Blumer
Tom Blumer
Tom Blumer is a contributing editor for NewsBusters.