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Life Health > Long-Term Care Planning

PPACA contributes to drop in hospital jobs

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(Bloomberg) – The number of jobs at U.S. hospitals fell 0.4 percent in January, to 4.8 million.

Health care facility employment fell 0.1 percent between November and December, according to U.S. Labor Department figures.

The last time hospital employment fell for two consecutive months was in early 2011, and analysts say the new drop may be the result of facilities preparing for reimbursement cuts related to the Patient Protection and Affordable Care Act (PPACA).

The health-care industry as a whole reported a slowdown in employment, with 400 jobs lost in January compared with an average of about 17,000 jobs gained a month in 2013.

But hospitals have gone from being a leader in health-care industry job growth to a laggard. In 2011, for example, hospitals created 23 percent of new health care jobs. In 2013, hospitals lost 400 jobs as the health-care industry gained 204,000.

The federal government is reducing spending on the Medicare Advantage program, and hospitals are expecting to get lower reimbursement rates from the new PPACA exchange plans.

Payers are expecting patients to get more of their care in an outpatient setting, and that’s also hurting hospital revenue.

In 2013, for example, the Cleveland Clinic closed “several hundred open positions” and released 700 workers through early retirement programs, spokeswoman Heather Phillips said in an e-mail.

The Ohio facility, one of the world’s foremost medical and research centers, said last September that the early retirements and restructuring were needed to “prepare for health-care reform.”

Other hospitals that have eliminated positions in the past year include Vanderbilt University Medical Center in Nashville, Tenn., and Baton Rouge-based Louisiana State University Health Care Services.

Hospitals are “putting on the brakes” while they wait to see the effects of PPACA, Mitch Morris, an Austin-based analyst for Deloitte Consulting L.L.P., said in a telephone interview. “Everyone knows reimbursements are going down, so you’d better get your house in order.”

But Morris said hospitals may see increased demand for services as the baby boomers age and PPACA increases the number of people with health coverage.

There will be “a tsunami” of patients seeking care in the coming years, Peter McMenamin, senior policy fellow at the American Nurses Association, said in a phone interview. “This is a period of mixed signals,” but ultimately, “growth is almost guaranteed.”

–Editors: Andrew Pollack, Angela Zimm

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